Making mistakes, we’ve all been told, is part of life and an important way we learn. Or, rather, mistakes shouldbe a key to learning. Before learning can occur in our organizations, however, we need a process in place to identify mistakes and then decide what should have happened instead, and how to ensure the right things happen next time—and managers and employees need to be trained on it.
Forbes published an article in 2022 by its Expert Panel on “15 Strategies for Analyzing What Went Wrong.” Identifying the failure early is key, advises David Greenblatt of Albert Scott: “Bring value to the failure by making it a valuable education. Examine and thereby improve the process used to decide originally it would work. Ask why did you not identify the failure early on.”
In training managers, it’s a good idea to teach, and review annually, the protocol for doing a post-mortem on business failures. Those failures can be projects that seemed successful, but fell short of the expected return on investment. Or they can be more obvious and immediate, such as how a customer service team handled a technical failure in its communication through the company call center. Rather than the managers and department heads gathering to discuss what went wrong, the initial round of business failure post-mortems should include the employees, such as the call center workers, who were on the front lines of the failure.
Those front-line employees may share with managers and executives that they were not provided with the information they needed. When angry customers called, they could not easily explain the problem and offer a solution, or at least let the customers know what to expect. Without input from the front-line employees, it’s too easy for managers and executives to dismiss the failure as due to incompetent or sub-par employees, terminate them, hire new employees—and then have the whole thing happen again because the problem was actually on their end rather than the fault of the employees.
The Forbes Expert Panel also advises carefully evaluating key performance indicators. “We are responsible for our attitude and actions. Teams should be encouraged to test and challenge the key performance indicators and efforts made to achieve these,” says David Price of Employsure. He says managers should ask themselves: “Where are targets achievable, realistic, and timebound?”
Was It Really a Failure?
To me, that means asking whether what managers and executives characterize as a failure was really a failure at all. Over the course of my career, I have experienced unrealistic company profitability goals that led what should have been seen as successful years to be branded as failures. In some industries, such as certain areas of the media, for example, the pandemic sparked more than average usage of products and services. Many people were at home with little or nothing to do. They turned to media, ranging from television to online publications, to fill that time, leading to a surge in viewership and readership. After the pandemic ended, and people returned to living their lives again, their consumption of those media products dropped drastically. Some executives likely based future goals on the performance of those media outlets during the pandemic, a highly abnormal time.
In your organization, are the metrics used to determine success or failure realistic, based on current, rather than past, circumstances? In some cases, executives can set the stage for failure by selling their businesses, or finding investors for their businesses, based on metrics that were generated during out-of-the-ordinary times. They then scramble to deliver on what they promised, though what they promised was based on performance during circumstances that may never (hopefully will never) happen again.
Tolerance for Mistakes
Since childhood, most of us have heard that failure is a chance to learn. That’s true—if you have the right company culture. How much tolerance is there in your organization for first-time mistakes? It’s one thing to terminate an employee if they made the same mistake a few times. However, when an otherwise good employee makes a mistake—even a big one—the first time, it’s a chance to educate them and create an even better employee.
“Investigate to understand the nature of the failure,” recommends Dedrick Boyd of TechSparq, Inc. “Then determine where it lies on the scale from preventable to intelligent. Failures that are preventable expose opportunities for improvement. Failures that fall close to or within the intelligent category are good failures.”
There’s a difference between easily preventable mistakes that were due to negligence and mistakes that were due to failure to make the right high-level decision, to an employee being given wrong information, or those made in pursuit of a higher purpose such as innovation. I would argue, however, that with so much pressure put on employees to perform with ever-fewer human resources, even a first-time mistake that was easily preventable should be forgiven. Managers in those cases could see whether an otherwise good employee acted with seeming negligence because they were too overwhelmed with their workload. Then the manager could find ways to better support that employee.
What Can You Do Differently Next Time?
Understanding what you could do differently next time is at the heart of a good business failure post-mortem. It’s easy to spend a meeting following a failure assigning blame self-defensively, with every employee in the meeting striving only to make sure they are not tagged “it.” A well-trained manager will start the meeting by noting that the purpose of the discussion will be to determine what can be done next time so the mistake doesn’t happen again, rather than fixating on who did what and why. To some extent, you do need to know what happened, but once you have determined that, the conversation should pivot swiftly to the future. “Let’s assume we’re all to blame to some degree,” the manager could say to the work team. “Let’s figure out how we all can do better next time.”
What protocol do you train managers to follow when there has been a business failure? How do you use these failures to improve your organization?