Official Blog of Center10 Consulting

In Praise Of Failure: Thoughts from Hershey, PA

on Tuesday, November 6, 2012
Originally Posted October 30, 2012

The family and I spent this past weekend at Hershey, Pennsylvania. Apart from the mandatory Hershey Park and Zoo America visits, we decided to take a whirl through the museum, called the Hershey Story, and also took a trolley ride, which is an hour-long drive that zips you through Hershey's notable spots while plotting Milton Hershey's evolution from an impoverished 14-year-old newspaper apprentice to child-less millionaire who changed the lives of thousands of poor kids through the Milton Hershey School (he left his entire fortune of $60 million to a trust that is now worth more than $8 billion).

While the experience could have been a simple hagiographical trip down memory lane, I was struck by the number of times various tour guides and exhibits would point to Hershey's mistakes and failures. They recount his being fired from the initial newspaper apprenticeship early, they recount his failed business ventures, first in Lancaster making and selling sugar candy, then in Philadelphia making and selling caramels.

Milton had only a fourth-grade education, but he seems to have had significant energy, vision and fortitude... but mostly, he seems to have kept his ears open and learned and grown. He eventually heeded his mother's advice to set up his next venture near home, and there, was struck by the brilliant idea of mixing in fresh milk into his candy bars. From that set of ideas, a multi-billion dollar business grew.

You'll roll your eyes and say you've heard versions of this story with each enterprise. What impressed me was the fact that the company retained the memory of these failures, indeed, celebrated them. The museum talks about bars made for war-time rations that sank without a trace once peace broke out, while the competitor's product went on to become a huge success - that's where M&Ms came from, since these were chocolates that would not melt in the heat of far-flung theaters of war.

I loved the story of Reese's - H.B. Reese, local dairy farmer and Hershey packing foreman, pitched Milton the idea of chocolate-covered peanut butter multiple times. Milton nixed the idea, convinced it wouldn't sell. HOWEVER, he sold Reese sugar and milk at cost - and Reese went on the create an amazing product. The Hershey corporation bought Reese's in 1963 for $23.5M, and now that combination of chocolate and peanut butter has around $400 million in annual sales. Talk about embracing your mistakes.

Leaders need a certain level of credibility and ownership of results to be able to candidly examine mistakes and help their companies and teams learn the right lessons. Embrace the fact that one failed, missed an opportunity or made a mistake - then glean the right truth.

For example, Milton's lesson was that the price of sugar did him in twice. So he bought sugar plantations in Cuba and became the second-largest producer of sugar pre-war (and had the foresight to sell before well before nationalization!)

It takes a pretty special company culture to see and appreciate the beauty of failure and resurgence post-failure. I suspect the amazing variety of creative confections must have some tasty mistakes lying by the wayside, and I also suspect nobody's "head rolled" for creating them. Nice!
Hershey's is an interesting case study, because well before it was fashionable to have "jugaad" innovation going on - he was letting his front-line employees design tools and techniques that best suited the chocolate bar-making process. More on that another time.


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