An interview with Bert Overlack, managing director of bert.overlack GmbH
Bert Overlack managed a company that operated throughout Europe for over 20 years, during which time it expanded and went from strength to strength. But then, in 2011, the market suddenly dried up; his company entered insolvency and for the first time he worried about his livelihood. But Overlack isn’t the sort of person to let something like that get to him. He now consults entrepreneurs who want to take the plunge like he once did, accompanying them on a journey that some people and companies tend to look down on. Working in partnership with TEAM U-Restart, and riding on the back of a Steinbeis Network project, Overlack is developing a concept on behalf of the Baden-Wuerttemberg Ministry of Economic Affairs, Labor, and Housing, the aim of which is to give “re-starters” a helping hand. In an interview with TRANSFER magazine, Overlack explains the thinking behind the project, highlighting why it’s imperative that failure gains public acceptance in Germany.
Hello Mr. Overlack. Our life – at work and at home – is a series of successes and failures. Why do so many people find it so difficult to accept failure in Germany and simply learn from it?
We live in a society driven by success, so it’s normal for people to gravitate more toward examples of success. So much importance is attached to commercial success in our society that sometimes people like to pretend failures don’t happen. I think that’s a mistake. But just so I’m not misunderstood: I don’t have anything against success, or successful people for that matter. I’m quite happy to be successful myself. But success and failure are just two sides of the same coin. So I think there’s something wrong with simply ignoring one side of that coin. We can learn from success and failure – in fact sometimes we learn more from failure. But if failure gets stigmatized and frowned upon, people who do fail won’t want to stand by what’s happened to them. And that’s a missed opportunity to learn something.
I’m sure cultural factors also have something to do with this. At school you’re taught to do everything you can to avoid mistakes. The Prussian kings introduced Germans to this idea that the army, public servants and schools should all be absolutely perfect. The rest was the result of the Industrial Revolution, which taught us that people and factories should run like clockwork and if possible not make any mistakes. This resulted in processes like quality management and rationalization. Individual creativity was generally looked down upon; instead people were expected to fall in line and adhere to rules and instructions. Non-conformance or even failure didn’t match the expectations of the system.
Sometimes when a company fails or more specifically a startup goes wrong, it still feels like it’s almost stigmatized by our German culture. Why do you think that is?
In Germany, people like to see failure as being “at fault.” You’re “at fault” if you default on a loan – so you’re indebted to someone. What that almost suggests is that being insolvent is about defaulting on something; it’s negligent or even criminal. Yet we know from the statistics that on 95% of occasions that’s not actually the case. In most societies, debtors became outcasts or were at the very least stigmatized.
Of course, this also has something to do with our desire for success and feelings of status, recognition, and respect that go with success. We live in a highly materialistic world, so failure and the material losses that go hand in hand with failure result in a loss of status, disrespect, and even stigmatization. Our points of reference are not people, with their strengths, weaknesses, successes, and of course their failures – but their material successes. Lots of people are scared of being excluded from their social surroundings – I was scared about that in 2011. And unfortunately there were people who deliberately tried to avoid me. Maybe I also tried avoiding them. But for that, there were lots of people who realized that my company insolvency was a one-off, and for them my successes, my skills, and my experience were much more important.
Can a “culture of failure” help change this perception and our attitude toward failure?
I believe it can. Our culture is already starting to change. The younger generation come at this topic from a completely different angle. For them, the possibility that something might fail is quite normal. Between 70 and 90% of all startups fail within the first three years. It would be reckless for any business founder to assume it can never happen to them. There are too many obstacles in the way and imponderables. In a world of uncertainty – or to use the modern term for it, VUCA – success isn’t something you can plan on. Too many things change too quickly to do that. Companies have to adapt much more quickly to changes in the business environment compared to the old days – the world really is more volatile, uncertain, complex, and ambiguous.
One thing I’ve also noticed is that older people are now opening up a bit. I regularly get people coming up to me after my talks, accomplished businessmen, who thank me for explicitly pointing out that there’ll be sleepless nights, fear and anguish, and worries, and that’s all part of running a business. I’ve yet to meet an entrepreneur who’s not had a bumpy ride. And often, it was a lot more down to chance that someone didn’t run into financial difficulties – rather than something they were good at or something they did right. Failure has a lot to do with happenstance. We’re so used to striving for perfection. It’s the yardstick for everything Made in Germany, something we’ve come to expect of our products and services. But these days we have to be more agile, quicker, more adaptable, more flexible – so it’s quite possible that an assumption we made yesterday no longer holds true today. Does that mean an idea was a failure, or that a project team or entrepreneur failed? Of course not. We’re just learning that there’s no guarantee of success, for anybody.
A culture of failure does make distinctions when it comes to the causes of failure, however. There are different kinds of mistakes or failure. For me there are two factors that keep coming up in this respect: how predictable an occurrence or outcome is, and how avoidable something is. So if I could have predicted and could have avoided a certain outcome, like something going wrong in production, but I didn’t do anything about it, was that intentional or just laziness? Of course, neither is okay. But with an innovation project, some outcomes are neither predictable nor avoidable. That’s just the nature of such projects, so managers have to deal with them completely differently. Then the key point is that failure can be an experience that people learn from. And the best way to do that is to accept it, think about it, and draw conclusions from it.
Startups and funding get a lot of attention in the media. What’s it like with re-starters? How important are they to the German economy?
Re-starters have played a relatively minor role in German economic policy and funding programs until now. There’s no category to slot them into. But there are some crucial differences between re-starters and first-time business founders. They have to come to terms with emotional losses and the loss of identity you have when a business fails, so they can learn from the experience. It takes time, and support is needed with this process. Studies have shown that on average, re-starters that learn from their experiences tend to be more successful when they start another business than first-time entrepreneurs. Despite all the rally cries of the motivational experts, that doesn’t mean it goes without saying, and it depends on certain conditions. One condition is that you acknowledge the failure you experienced, that you reflect on it, and that you talk about your experience. And that takes time and a willingness to face up to your own emotions – fear, anger, a sense of guilt, or self-doubt.
This is one of the reasons why we’re so pleased that the Baden-Wuerttemberg Ministry for Economic Affairs took on the topic of re-starters and second-chance entrepreneurship last year, and that they asked me and my partner, TEAM U-Restart, to develop a concept for providing re-starter businesses with the right support and offer them a series of ten re-starter training sessions. By the way, this project is a follow-on from the European Danube Chance 2.0 initiative, which was managed in Germany by the Steinbeis-Europa-Zentrum in Karlsruhe and Steinbeis 2i. They’ve provided us with a lot of support through the Steinbeis Network.
You also know from your own experience what it’s like when a company fails, but you still had the courage to start again. What advice would you give to someone in this situation right now, someone who’s thinking of giving it another go?
Have the courage to do what’s necessary. Facing your past experiences, coming to terms with the fears, the feelings of guilt, and self-doubt, and understanding what happened – that takes courage, because often it’s painful. It takes courage to rediscover your self-belief, to find you do still have self-worth, to summon up the energy to start again. And it takes courage to accept what happened to you, all the things you’ve realized, the insights, and then talk openly about the things you learned from the experience. One thing I’ve worked out is that talking about this is not half as bad as you thought it would be. If anything, I’ve received a lot of encouragement and even gratitude that I talk so openly about something that obviously needs talking about – lots of people have had to go through this. It was what motivated me to write a book about my experiences (German title: „FuckUp – Das Scheitern von heute sind die Erfolge von morgen“) and share what happened to me with others. The more we all talk about our mistakes and experiences with failure, the easier it becomes for everyone to accept that these things happen and learn from our experiences and what happened to others. And then we’ll have achieved what’s meant by a culture of failure and learning. I play the piano and I love improvising, so I can really relate to what Miles Davis said: “It’s not the note you play that’s the wrong note. It’s the note you play afterwards that makes it right or wrong.”
DARING TO “RE-START”
The Baden-Wuerttemberg Ministry for Economic Affairs has launched a pilot project aimed at developing a concept for supporting companies and giving them a second chance. Working in partnership with TEAM U-Restart, re-starter training will be offered as part of a series of ten pilot workshops running from March to May 2020. The support that is important for re-starters will be identified, as well as the best way to integrate this into startup funding already offered in Baden-Wuerttemberg. The aim is to exploit the potential offered by getting a second chance.