Fail well: How to handle business mistakes

Chris Dyer, author of The Power of Company Culture, on how to handle business howlers.

by Chris Dyer
Last Updated: 16 Apr 2018

Looking at how companies deal with mistakes is like staring deep into their souls. Corporations that emphasise culture seem to take failure in their stride, while everyone else falls flat on their faces. Suppose your employee was trying to do something great, and instead failed. What if that mistake cost you money or a client account? How would your organisation deal with that? Assuming you cringed at this scenario, here are 10 ways you could handle mistakes positively - and suck a lot less.

1. We’ve got your back

One of the gleaming examples of how to deal with failure comes from Southwest Airlines. When I interviewed Southwest’s director of people Shari Perez-Conaway and VP of people Julie Weber on my radio show, they revealed a startling party line on the issue. If employees truly believe they are doing what is best for the customer and slip up, the airline has their backs. Southwest will retrain or coach staff - not punish them - toward better solutions.

2. Culture of learning

Does your company view mistakes as part of the learning process? Or are they weapons of shame and grounds for demotion or dismissal? Leverage a perception shift by accepting that to err is human and necessary to growth and improvement. Being prepared for mistakes helps companies face the inevitable. It leads to flexible and creative thinking, sometimes prompting breakthroughs and successes that would otherwise never have happened. Making mistakes should be tied to learning, not shaming.

3. Mistakes vs errors

When formulating policy on failure, it is important to distinguish between mistakes and errors. Mistakes, as in the Southwest Airlines example, are about trying to do something good or awesome and not quite making it. New, bold, or innovative acts are risky but can pay off with practice. Errors, on the other hand, are dumb moves that should be caught, fixed, and not repeated. If a clerk keeps miscalculating payroll time and again, that employee might need to go.

4. Talk it out

Don’t sweep failure under the rug! One the best ways to find mistakes and learn from them is to intentionally talk about them. In the Agile/Scrum project-management world, this is called having a 'retrospective'. At the end of a designated work period, team members meet to discuss what went well and what they could have done better to achieve their goals. This provides a safe space to analyse a team’s approach, identify mistakes, and regroup for greater success in the next iteration.

5. Write it down

If you’re going to take a lesson from a mistake, why not let others learn from it too? Documenting your team’s wrong moves may seem counterintuitive, but this practice can turn naughty into nice. Leaders should show the way here by admitting their own faults. Think of your last mistake. Write down what you learned and send it your colleagues or direct reports. Over time, your team will feel more comfortable sharing and documenting as well.

6. Challenge

When a perceived mistake occurs, using the processes above can help you go deeper. But an important question to ask is whether it really was a mistake or not. Were there variables out of the team’s control? Was it a training issue? Could someone be passing the blame for an unsatisfactory outcome? Make sure this is not a perception problem, but a real mistake. Evaluate the situation with an open mind, without forming conclusions until the end, to understand what really went wrong.

7. Coaching 

Sometimes when mistakes happen, those responsible did not have the information they needed to make the right decision. Companies must enable staff to operate along preferred guidelines. Here, coaching is a great way to review situations and talk about what could be done next time. Use the company’s stated mission, vision, and values to guide decisions. Instead of feedback, look to give 'feedforward'. This shift from critic to coach helps employees get it right more often.

8. Training

Another underlying cause of mistakes in some types of work is a lack of training. Once we settle into a way of doing or thinking about something, we may be loath to consider alternatives. Giving employees frequent and in-depth training into their work, as well as introducing new concepts and best practices, often reduces unwanted mistakes. When employees get more practice, a deeper understanding of 'why' things happen, and opportunities to express ideas, they perform better.

9. Positivity

Own, but don’t prioritise, failure. In my company meetings, the first thing we ask is 'What went right?' or 'What are we doing well?' By focusing on what is working and exploring that first, employees feel more comfortable answering the harder question, 'Where can we do better?' This sets a positive spin on mistakes and puts them in perspective. It also levels the playing field by asking everyone - including the boss - to get real, celebrate success, admit failure, and move on.

10. Robot takeover

Sometimes mistakes point towards needed innovation. Could a better process or technology help in the future? We rely on computers instead of typewriters for a good reason. Sometimes technology can help get the job done faster, cheaper, and without complaining. As you look to improve, don’t forget to include technology, automation, SAS, or even robots for a better solution, if it makes sense. To err may be human, but that doesn’t mean we can’t enjoy a little help from our automated friends.

Chris Dyer is the author of The Power of Company Culture: How any business can build a culture that improves productivity, performance and profits, published by Kogan Page and priced £19.99.


Find this article useful?

Get more great articles like this in your inbox every lunchtime

SMEs going for growth with £633m investment plans

SMEs are expecting to spend an average of £111k on growth strategies in the next...

“Experiencing maternity discrimination twice ignited the activist in me”

5 minutes with… Gemma McCall, CEO of discrimination reporting software Culture Shift

Will the UK ever clamp down on corruption?

The UK's leniency towards corruption is damaging its global reputation, argues academic Oliver Bullough in...

Indra Nooyi

Indra Nooyi: “You’ve no business being a nasty CEO”

MT talks to Indra Nooyi, the former CEO of PepsiCo, about her new book, her...

Frustrated with your company...why not buy it?

Management buyouts are much more common than you might think and, if done properly, can...

WATCH: The "tough" leader who cried during an all-staff meeting

Showing emotions can be your greatest strength in times of crisis