I’ve had several discussions lately, by coincidence or not, of entrepreneurs looking at fear of failure, fear of launching, and dealing with mistakes.
I really believe one of the most important qualities of a successful entrepreneur is acknowledging and accepting mistakes. If you are going to start a business, or run a business, or grow a business, you will make mistakes. It comes with the territory. You have to deal with uncertainty all the time, you have to make decisions quickly, and you won’t always be right.
Some people can’t live with mistakes. They plague themselves about them. They manufacture intricate stories about how it wasn’t really a mistake. They get so afraid of making them that they don’t do anything. They are constantly on the defense.
Don’t let that be you. Keep your eyes open. You’ve made mistakes, you’ll make more of them. Embrace the mistake, take long enough with it to catalog in your mind what you did wrong and what you’ll do differently in the future, and then let it go.
If you can’t live with mistakes, keep your day job.
Perhaps it’s not a mistake that the “business mistake” category in this blog has 116 posts — not counting this one. And I love John Caddell’s mistake bank blog posts at themistakebank.com.
I have a healthy respect for the value of mistakes. You might have seen my recent post on 5 truths about mistakes, or perhaps the business mistakes category on this blog. I’ve certainly made my share. (Wow … I see that category has 100 posts. This one, fittingly, is the 100th).
With that as background, I’m happy to report that John Caddell tells me he’s repositioned his site The Mistake Bank on a blog platform, so we can all see it again. It was set up for a while on a Ning platform. He had taken it down.
The need to learn from mistakes is one of our most time-honored principles, drummed into us from early in our lives, through our educational years, and into our careers. But new research is showing otherwise, as does most people’s daily experience. Think about it. Do you usually learn from your mistakes? Or do you just feel embarrassed or upset and try to forget or cover up what happened?
John, however, believes in acknowledging mistakes and learning from them. That’s the reason the Mistake Bank exists. He says:
But his underlying premise is wrong, in my view. Confronting and learning from mistakes is not the opposite of positive recognition. And they are not mutually exclusive. In fact, a highly positive culture is required to give employees safety to reveal and correct mistakes quickly, rather than hide them.
Hallowell, quoted by John, moves from acknowledging mistakes to public humiliation, as if you can’t do one without the other. He says:
Do performance reviews that detail your shortcomings really help you? Or do they bring you down? Does being criticized in public improve your performance, or not?
I say that logic is flawed. Sure, you run into some bad bosses who berate people in front of others, and occasionally you’ll find somebody who seriously believes that’s a good management technique. But I don’t. And I’ll bet you don’t either. But I don’t think many people would agree that acknowledging mistakes happens only with public criticism. Would you?
And John cites a study of nurses and safety that found …
nurses in “safe” cultures committed more mistakes than nurses in less safe environments, until she discovered that psychological safety allowed the nurses to be more candid in revealing and discussing mistakes rather than hiding them.
What do you think? I’m pretty sure I’m voting with John on this one. And I’m also glad, as I said above, to see the Mistake Bank is up and running again.
ps: John told me in email that my value of mistakes post “unwittingly encouraged” him to put the Mistake Bank back up. I’m glad. I’m also afraid most of my best work is unwitting.
Two days ago I had the pleasure of being interviewed by John Caddell, founder of the Mistake Bank, for a podcast focusing on mistakes. That made me think about some of the things I learned that came from the business mistakes I’ve made. This is over the more than 27 years since I was last an employee, and 22 years of running my (well, our) own business. And despite a fancy business degree.
1. Your employees can’t also be your friends.
Most business owners want to treat employees like friends. We hire people we think we like, we work with them, we share values, so it’s only natural. But I’ve found, I’m afraid, that it doesn’t work.
Sometimes friends become employees, and sometimes former employees become friends, but don’t kid yourself. People you pay aren’t really friends. And business requires management, which means goals and tracking and accountability and feedback, which, ultimately, means you aren’t equal. You can’t be both equal and effective.
As a test, ask yourself: when those people you thought were friends leave the company, are they still friends?
This was really hard on me because I brought my anti-establishment quasi-hippie former ’60s persona with me into my business. I’m not naturally comfortable with hierarchy. But in a real business, it has to be there. I learned this the hard way.
2. Profits aren’t cash.
Profits are just an accounting concept. You get them by adding up the sales you make over a specified time and subtracting the costs and expenses. But having the sale doesn’t mean you have the money; and the cost associated with that sale might be something you paid months earlier. And furthermore, the money you spend to repay debt or buy assets is completely ignored by profits.
So it’s not hard to go broke while still being profitable. I learned that in business school first but then had to relearn it 15 years later when my company suddenly doubled sales and profits, but it nearly killed us. We were selling through channels, so money from sales came five months later, but we were building inventory and spending on marketing months in advance. So we were spending in October for sales made the following March that generated deposits into the bank in the next July. We nearly went under during our first big growth spurt. So I learned about cash flow the hard way.
3. Good liars are rare but dangerous.
Most liars are obvious and easy to spot, but last week I was chatting with an investor whose firm got into trouble for not catching a problem before they invested. He felt bad. It looked like their “due diligence” process failed. But he said:
“If you think about it, we rarely run across a person who can look you straight in the eye and lie through their teeth without showing it. We’re not equipped for that. When people answer straight direct questions with straight direct lies, they can get away with it.”
That made me think. Lots of people tell lies at odd moments, make excuses, try to squeeze out of things; but with normal people, that kind of behavior trips them up on a regular basis. But the power of the person who lies very well is something else altogether. That’s another one I learned the hard way.
4. You have to live with mistakes.
If you can’t stand mistakes, don’t make them, and don’t tolerate them, then you’re not cut out to have your own business. You are going to make mistakes, you can count on it. You have to be quick and flexible about recognizing mistakes, acknowledging them, and taking whatever steps need to follow them.
One of the best tests of my leadership — and my organization — is “what happens after people make a mistake?”
I agree. I had to learn that the hard way.
5. You can’t do everything, so at least try do the right things.
I call it displacement: everything you do rules out something else that you can’t do. Every entrepreneur wants to build every possible product to please every possible customer. I do an you do too. But we don’t realize, or at least I certainly didn’t for a long time, that trying to do everything doesn’t work. You end up not doing the really important things as well as you should, getting things only half done.
You try to focus. Take a step back out of the chaos, clear your head, and revisit priorities. What really matters? No matter what brilliant ideas you may or may not call your strategy, your real strategy is how you spend your time and your money. I learned that the hard way.