WHEN the Galway-based motivational speaker Kevin Kelly stands up to give a spiel to company executives on attitudes to failure, he is fond of using an anecdote about Larry Page, the co-founder of Google.

A colleague informed Page that she had made an error costing the company millions of dollars. Instead of blowing his top, he apparently replied: “I’m so glad you made this mistake because I want to run a company where we are moving too quickly and doing too much, not being too cautious and doing too little. If we don’t have any of these mistakes, we’re just not taking enough risk.”

Kelly believes being prepared to fail is a prerequisite for anyone starting something new. “Ego is the biggest obstacle to success,” he said. “You have to be able to look stupid to the crowd if you want to have the chance of succeeding.

“The reason I subscribe to the Google philosophy is that until a company facilitates failure in the workplace, it will never truly tap into its full potential.”

The latest Global Entrepreneurship Monitor figures for Ireland cited fear of failure as the single biggest obstacle to an individual’s willingness to start up a business. The survey showed this fear is more pronounced in Ireland than in much less entrepreneurial countries.

A 2003 government-commissioned study on small-business failure in Ireland found that up to 41% of start-ups had indeed failed within five years, the majority of them within the first three years. This happens for a variety of reasons, such as internal deficiencies in management structure or because of external factors outside of the firm’s control, such as declining markets, inflation, interest-rate spikes, poor cash-flow and late payment.

“The greatest challenges for small Irish firms include the tightness of the labour market and wage pressure, rising input costs, in-ternal management weaknesses across a host of areas and the ever-present ‘one-person’ problems of paperwork, regulatory and taxation compliance,” wrote Fitzpatrick Associates, the authors of the report.

Des Fahey, the chief executive of the Dublin Business Innovation Centre, argues that society and individuals should stop regarding failure as something to be ashamed of. “A lot of people cannot separate themselves or their feeling of worth from their jobs and if these individuals start companies that fail or are made redundant they will for ever feel the scar,” he said.

“This shouldn’t be the case. If you have tried your best and failed, so be it. After all, many times businesses fail due to factors outside their control. There is no room for shame unless you have done something improper.”

Fahey argues that although business failure does not attract the same stigma now as 10 years ago, there is still considerable room for improvement in social attitudes to risk. However, he believes that when it comes to raising money for a second or third venture, an individual will be judged on what he or she has learnt because of past failures.

“I never have a problem backing someone who has failed in a business — it will depend on the person and the business proposition,” he said. “The only way to learn to run a business is to go and do it. There is no substitute for the steep learning curve of experience, which can entail tough financial decisions and even the trauma of having to sack people.”

Eibhlin Curley, the assistant chief executive of the Dublin City Enterprise Board, advises entrepreneurs to “fail fast and learn quick”.

“The ability of the entrepreneur to adapt to the changing business environment or change strategy is essential to success,” she said. “The entrepreneur needs to read situations with potential buyers so that if one approach is not working then they can take a different tack.”