How to Learn from Mistakes and Avoid Crisis

by Dr. Wolfgang Stehling

"Fools repeat their mistakes -
the wise make them only once."
Anonymous

Introduction

One wrong decision, even the smallest one, of a business leader can be the cause of a serious business-crisis. Therefore it´s no wonder that the fear of making mistakes is one of the most important stress-factors for executives. But how should mistakes be handled by companies? After all one has to keep in mind that learning from mistakes will give leaders the chance to grow. Companies can learn much from mistakes when they learn to recognize them early enough to handle the consequences.

The most frequent fears

Between 1992 and 1995 1,823 employees from German companies, from all levels, were asked about their biggest fears. The eleven fears that were mentioned most frequently are listed below:

The first step in dealing effectively with fears is to recognize them. In a second step strategies to cope with them have to be developed. In the following I propose counterstrategies against the third common fear: making mistakes. In times of company crisis this fear - together with the fear of losing one's job - surely is the most important one.

Learning from mistakes

Managers who have made mistakes, very often as a first reaction, think and feel negatively. They become irresolute, lose their self-confidence and don't dare to try new things. Behaving like this we forget that we can learn from mistakes more than from successes. Mistakes give opportunities to grow. They are necessary costs. Most important: one has to make the mistakes earlier than the competitor and has to learn the lessons from them before the competitor does. Follow the motto: "Celebrate your mistakes".

• Action 1: Identifying mistakes before a project starts
  In the preparation-phase everything that might cause mistakes should be put on a list. Each item on the list has to be checked carefully and everything to prevent potential mistakes has to be arranged. If, on closer examination, it turns out that the risk is too high, the project has to be replanned or, if necessary, cancelled.

• Action 2: Admitting mistakes in time
  Identifying mistakes is more important than making them. In order to diminish resulting damages the best is to inform everybody who is involved in the consequences in time. In time: that means before everybody gets irritated by rumours and draws wrong conclusions. In order to be open and honest some rhetoric qualities are needed. Statements like: "It is all my fault" are not really helpful. Reduction in self-esteem encourage some people to demoralize this person even more (mobbing).

• Action 3: Seeing mistakes as a progress
  Making mistakes means trying new things. Making mistakes in an early stage of a project helps finding alternatives - before the whole project is threatened. Some projects fail because, once a wrong way has been chosen, nobody feels courageous enough to stop the whole thing although it is clear that the chosen way will lead to failure.

• Action 4: Analyzing mistakes thoroughly
  Within Microsoft mistakes are taken into account (reference: David Thielen, The 12 simple secrets of Microsoft, McGraw-Hill, 1999). There is nobody who has succeeded in this company, Thielen reports, who hasn't made one or more spectacular mistakes in the past. But one has to differentiate between unevitable mistakes and those which are due to incompetence or foolishness. Therefore it is essential to find out immediately why each failure happened. When mistakes are recognized and identified early enough and then eliminated, greater damage within the system can be prevented.

• Action 5: Learning in the moment of truth
  The "moment of truth" is the very moment after the mistake has happened. Everybody should have a method with which to analyze mistakes as long as the impressions are still fresh. In fast growing companies, where many innovations are made, mistakes happen quite often. That's normal. The management who checks mistakes regularly, uses a very good tool to prevent them from happening again. The clearing mustn't be done regularly in big workshops. With good self-coaching everbody can learn most valuable lessons immediately after the mistake has been made.

• Action 6: "Post mortem"-meetings
  In Microsoft (and other high-tech-companies) whenever a project is been finished, a "post mortem"-meeting is held. In most cases in several follow-up meetings everything that went wrong and everything that went well is discussed intensively. It is not the aim of such meetings to find out and judge the person who may have caused a failure. The one and only aim of such meetings is, after analysis, to find out how this or comparable projects in future can be done better.

About the author

First published in Crisisnavigator (ISSN 1619-2400):
Volume 1 (2000) - Issue 9 (September)