Make No Mistake: Leveraging Errors To Drive Business Growth

I sat down with business innovator and colleague Birut? Andru?kait? as a part of her focus series on business. We discuss a common occurrence in the workplace, and how that can be harnessed in the right way to move your organization forward. Here is her interview:

In the era of mass information, we hear a lot about business, innovation, the amazing entrepreneurs the success stories. Yet not every successful business in business started or ended that way.

While being in the business I have made all possible mistakes: wrong partners, bad financial decisions, unsuccessful investment, mistakes, caused by personal qualities, lost several projects because of my gender, missed the terms or misread the contracts… you name it. For some mistakes I redeemed myself; for others, I am still paying the price.

Mistakes is the topic of an informative dialogue with Paul Rosenberg- a friend, a developer of leaders, and an author. My first question for you is: what do you define as a mistake in business?

Paul: For me mistakes are a necessary part of the business world. The key is how you learn from them, and the feedback you get from errors. A mistake can be on many levels...a misjudgment about the market, a bad exchange with an employee or customer.  The only mistake is thinking you won’t or shouldn't make them. For me it’s all about awareness and being willing to face those errors and adjust.

Birut?: Can we avoid making mistakes in business? Or are they essential? Have you ever met a business person who really has never made a mistake? Could we say, that the main mistake is to make no mistakes?

Paul: Great question Birut?. I don't think we can avoid making mistakes in business as we are human. To me they fall into two categories.....mistakes that are born out of taking risks, trying new avenues, innovating...those are the lifeblood of creativity and growth. Then there are actions you take as a leader that are intentionally or unintentionally negative or harmful, and those we need to own up to. I have always told my own team, that making a mistake will not get you in hot water. Not learning from it or owning it is a different story. 

Birute:  And somehow being able to be error free?

Yes. The mistake is to think that somehow, you can be error free. I have only strengthened relationships with clients and employees when I have had to fall on my sword and recognize my errors in an authentic way. In short, own them. A different story if someone keeps making them over and over.

Birut?: How one should react towards mistake in order to strengthen the bond with clients? What are the steps to follow? Last time we spoke about leaders who, in case of a failure, stands with a team and accepts the challenge, but what would be the exact steps? Like: count to 10 before making a decision.

Paul: One doesn't react in order to strengthen a bond with a client. That’s a consequence or side effect. A leader should react accordingly and authentically when there is an error, and own it, understand the clients point of view, and have that dialogue as soon as possible. Often times it is a misunderstanding that has driven the issue, or a miscommunication. By having that open dialogue, you can both deal with the error and move past it.

Birute: How do you do that effectively?

Paul: My advice is, don’t let it simmer. Address it, clear the air, and look at ways to avoid it happening the next time. And if possible, personally is better. I remember I made a big mistake perception wise with my executive team, and once it was pointed out to me how I had come across, I called all 5 of them that evening to explain my intentions, and my understanding how bad it came across. The reaction was one of a stronger bond, which comes from how I showed up. Step wise, call the individual or individuals, or meet face to face, and jump in openly and honestly.

Birut?: What about fixing mistake in a refund form? Is returning money return always the best choice?

Paul: There are these type of calculation and form errors all the time. Like anything else, the success of that communication with a client or customer will depend on how you show up or your firm shows up. When there are issues or complaints, most of the time it is more about how you are perceived by them in your dealings. If you make a good faith attempt to make things right in the framework of the constraints that you have, that will be sufficient for most. Not all. 

Sometimes it’s not good news, and money has to be given back. I think that if you show you understand and are really listening, those are the only things you may be able to do for that individual or firm. If the money needs to be given back, it has to be given back.

Birut?: Why do you think the start-up ecosystem is more mistake tolerant? Some zones and regions, like Silicon Valley, are more mistake tolerant…why?

Paul: That is the life blood of discovery. You try new things you make mistakes…that’s how you arrive and a great product or service, because you are constantly probing, risking, getting feedback, analyzing... failure is the currency of success. Start-up innovators and entrepreneurs know this, and they are attuned to what each mistake teaches them. To one of your favorite quotes by Henry Ford : If I had asked people what they wanted, they would have said: faster horses". The Model T didn't happen overnight.

Birut?: It is an amazing quote- one of my credos! We tend to imagine that business owners are some incredibly smart people who has an inner confidence and braveness. How brave or fearless shall one be to be in the business?

Paul: They got smart or successful by willingness to take risks and to have vision. Business owners need to be fearless in their vision and their willingness to adapt and fail, in the beginning. And once they are successful, I have found that the only way to be growing is to keep growing. Meaning don't become conservative and throw away what got you there. there should be always some part of your business environment that is still innovation, where failure is normal and accepted, and ideas are flowing.

Birut?: Well, I have never considered myself super smart individual and still have a lack of confidence at times. Every time I step into new area in business I am scared. I keep asking myself why I keep pushing myself to the edge. Is some inner need to seek for the new fields and be on that edge? I wonder ...is a business person always the brave one or this inner something is enough? May the curiosity be enough?

Paul: Not all business people are brave. Some of them share your drive to try new paths, to push yourself, to challenge our self to grow. Individually we have our comfort zones, and what is comfort to one is panic for another. I know that from being a stand up comic. Trying to make a group of people laugh is not for the faint of heart! 

Birut?: Since we are waiting for your book release in the Autumn about leadership: the picture of the leader: mistake tolerant or strict one?

Paul: Absolutely you have to be tolerant, and encourage your team to learn from your errors, and to not be afraid of them. That's what growth is all about.   

Birute: If we would talk about NEW BUSINESS: What are the typical mistakes business person makes in the first years?

Paul: The biggest killers of new business is a lack of planning. Taking the time to read the the market, being patient, and not rushing into your dream is a false trap or illusion. "Let’s get going" really should be a lot of careful prep work, probing the market, understanding your offer, building your network. In many ways, its counterintuitive, but slow down to go fast.   

Birut?: But at the same time, you might lose the time in the paperwork instead be ready to react fast to changes. I would say that one of the first year’s mistakes is imagining to get, like 1% of China market and you’re good. Nobody really understands that business in the first several years will be a savings eating machine. Would you agree?

Paul: Agreed. You have to balance a positive entrepreneurial ‘can-do” spirit with pragmatic expectations. 

Birute: Even thought our discussion is only getting more and more interesting, I think, its time to wrap up. We will proceed with our discussion on business mistakes and tolerance in our next article.  

Stay tuned!