Great CEOs Make Mistakes – You Should Too

We make tens of thousands of decisions every day, from when to get out of bed in the morning to what to have for dinner, and from how long to spend checking emails to which to-do list item should be addressed first. Then there are the much bigger decisions, like launching a new product or shaping a marketing strategy.

If you’re trying to “Make Big Happen,” then you’re probably thinking about these big decisions a lot, and trying to figure out whether you’re going in the right direction.

Mistakes are inevitable if you want to maximize your potential.

While no one wants to feel like they’re making a mistake, there’s actually a lot we can learn from mistakes – and the people who are willing to make them.

Take Facebook founder and CEO Mark Zuckerberg, for example. He grew the social media platform from nothing to a global phenomenon, but there have been a lot of very public missteps along the way.

“I just think I take more chances, and that means I get more things wrong,” Zuckerberg said in a recent article in Wired. “So in retrospect, yeah, we have certainly made a bunch of mistakes in strategy, in execution. If you’re not making mistakes, you’re probably not living up to your potential, right? That’s how you grow.”

You’ve probably heard that ‘move fast and break things’ philosophy a lot in start-up culture. Companies need to constantly be coming up with new ideas for products and services that will appeal to their customers if they want to be able to compete in the marketplace. Not all of those ideas will work, but a better new idea could be right around the corner if the company is moving fast enough.

Not all decisions are created equal.

For this philosophy of business to succeed, though, decision makers need to understand that not all decisions are created equal. In fact, Amazon’s founder and CEO Jeff Bezos says that a common pitfall for larger organizations is thinking about decision making as “one size fits all.”

Instead, Bezos says he divides decisions into two categories:

• Type 1 decisions are irreversible: they have to be made slowly and thoughtfully after consulting data and key players, since there’s no going back once the decision has been made.
• Type 2 decisions are reversible: they can be made quickly with only a partial understanding of the consequences, since the decision can later be revoked or changed if necessary.

There’s no clear-cut formula to tell the difference between a Type 1 and a Type 2 decision, so it might be harder to distinguish between them than one might think.

Bezos wrote in a letter to his shareholders in 2016 that most decisions fall into that second bucket, and he warned against the tendency to believe that they’re actually in the first. “The end result of this is slowness, unthoughtful risk aversion, failure to experiment sufficiently, and consequently diminished invention.”

But even Bezos hasn’t been able to crack the code: he noted in his letter that Amazon still had to figure out how to combat the mindset that most decisions should be made using the Type 1 process. If his company didn’t: “one-size-fits-all thinking will turn out to be only one of the pitfalls.”

Regardless of which kind of decision it is, leaders have to communicate with their team and set expectations for how the decision making process should work. The leader will need to convey whether the team should slow down to make sure everything is planned out and done the right way for a certain decision, or whether the team should move fast and be prepared to break things. These processes are only effective if everyone on the team is on the same page.

Be willing to make mistakes.

Decision making can be stressful, but it’s important to remember Bezos’ point that it’s actually easy to reverse or pivot most decisions after they’ve been made. Sure, the miscalculation might be embarrassing, but it’s better to get back on the right path after a mistake than to continue down the wrong one.

And speaking of embarrassing, remember the Amazon Fire phone? It came out in July 2014, got horrible reviews, and Amazon pulled the plug on it just a year later. They realized their mistake, cut their losses, and got back to doing what they do best.

That brings us back to Zuckerberg’s point: it’s actually OK to make mistakes! You don’t want to fall into the trap of over-estimating the consequences of a mistake, since most decisions are, in fact, reversible. If you aren’t willing to make mistakes, then you might not be acting aggressively enough, and your company might not be able to grow as a result.

After that, you just have to remember that the key with any decision is to learn why it may or may not have worked, and then course correct in the future with that new information in mind.

Don’t let the fear of getting it wrong stop you from Making BIG Happen.

About Mark Moses

Mark Moses is the Founding Partner of CEO Coaching International and the Amazon Bestselling author of Make Big Happen. Mark has won Ernst & Young’s Entrepreneur of the Year award and the Blue Chip Enterprise award for overcoming adversity. His last company ranked #1 Fastest-Growing Company in Los Angeles as well as #10 on the Inc. 500 of fastest growing private companies in the U.S. He has completed 12 full distance Ironman Triathlons including the Hawaii Ironman World Championship 5 times.

About CEO Coaching International

CEO Coaching International works with the world’s top entrepreneurs, CEOs, and companies to dramatically grow their business, develop their people, and elevate their overall performance. Known globally for its success in coaching growth-focused entrepreneurs to meaningful exits, CEO Coaching International has coached more than 500 CEOs and entrepreneurs in more than 25 countries. Every coach at CEO Coaching International is a former CEO or President that has made big happen. The firm’s coaches have led double-digit sales and profit growth in businesses ranging in size from startups to over $1 billion, and many are founders that have led their companies through successful eight and nine figure exits. CEOs and entrepreneurs working with CEO Coaching International for three years or more have experienced an average EBITDA CAGR of 59% during their time as a client, more than five times the national average. For more information, please visit: https://www.ceocoachinginternational.com