Entrepreneurial Leadership

Embrace Mistakes – Yours & Those of Your Team

By Frank Demmler

I don’t know if it’s the amazing success of Pittsburgh Steeler rookie quarterback, Ben Roethlisberger, but I’ve been involved in an inordinate number of conversations about leadership recently.

That has got me thinking about the various aspects of leadership. Among the most important traits, a leader must create a culture that embraces mistakes.

First, you must acknowledge your own mistakes and correct them.

In addition, you must encourage everyone in your company to make decisions appropriate to their responsibilities. When some of those decisions don’t work out, celebrate the noble attempt, and never, ever chastise or punish someone for an honest effort.

Without glorious failures along the way, grand victories are rarely achieved.

Mistakes Are Inevitable

First-time entrepreneurs often believe that there is one right answer for every challenge that is thrown their way. One right answer almost never exists. There are usually several (many?) good answers. The key is in the formulation of the planned response and execution.

As Sean McDonald, CEO of Precision Therapeutics, recently told a group of aspiring entrepreneurs, “Be satisfied with excellence. Leave perfection up to God.”

Execute as if you know you’re right, but recognize that you may be wrong

Contrary to what you may think, the acceptance of the possibility that you could be wrong is extremely liberating. Knowing that you don’t have to be absolutely right all of the time gives you the freedom to try what you think is best at a particular moment in time. [You do need to be right some of the time, by the way. I’m not advocating complete failure here.]

Do you want to be right, or do you want to create a successful company?

I’ll admit that I’m paraphrasing that wise man, Dr. Phil, so I apologize in advance.

Building a successful company is like fighting a war. You’ve got to keep the ultimate goal in mind. Winning a battle, but losing the war is not what it’s all about.

Defending yourself and your decision is a waste of time and energy. Learn from your mistakes, and move on. Accept constructive criticism from one and all and thank them.

Similarly, offer advice to those who have stumbled along the way.

Don’t “Bet the Company”

There are mistakes and there are MISTAKES.

Before making any decision, assess the possible damage if the decision is wrong. In all but the most extreme cases, don’t bet the company on a single decision.

• Maybe it’s not the right time to spend all of your remaining cash on a four-color, inside-front-cover advertisement in an industry magazine.
• Maybe you shouldn’t outsource the production of your product right now.
• Maybe you shouldn’t open up five regional sales offices.

Mistakes of Commission Are Better Than Mistakes of Omission

An underlying theme throughout these comments is a bias toward action. If you make a decision and implement it, presumably you’re doing so with some anticipated outcome in mind. [You’d better be.] If that outcome doesn’t occur, you can try to evaluate why and do better the next time.

Conversely, if you don’t do anything and you have a bad outcome, what do you fix?

Decisions Must be Made with Incomplete Information

If you are a first-time technology-oriented entrepreneur, you are likely to want as much information as possible when faced with important decisions. But complete information is an ideal that can never be achieved.

In fact, delaying a decision in the anticipation of getting more information is often more damaging than making an immediate decision and adjusting to the outcomes as needed.

R.F. Culbertson, CEO of Eidoserve, recounted a meeting he (and many others) had with Colin Powell, when he was the Chairman of the Joint Chiefs of Staff. R.F. was surprised when Col. Powell said that he expected his commanders in the field to make their decisions when they had roughly 40% of the potentially available information.

If they are expected to make potentially life-and-death decisions with only 40% of the information, how much do you really need?

Practice, Practice, Practice

Creating this kind of culture is not very easy. The behavior is one that often has to be learned. Therefore, I say to you, PRACTICE MAKING MISTAKES!

Now I don’t mean that literally. What I do mean is that you, first, and members of your team, second, should consciously make decisions more quickly than you have in the past. Monitor how they work out. Learn from them.

Also, learn about yourself. Where are your comfort zones? Why? What are the defense mechanisms that you use to avoid making decisions? If you recognize them, you can combat them.

Pull your team together and discuss the challenges facing the company. Pick one of them that has been delayed pending receipt of additional information. Ask, “If we had to decide today, what would we do?” Once that response has been solicited, implement it immediately!

If you are going to be successful, you need to develop your panic armor. You need to exercise your gut decision muscles. You need to experience the relief that the sun really does rise the next day after you’ve made a monumental blunder. You need to view mistakes as learning experiences. You can only be sure if you’ve been there and done that. Develop the mindset. Develop the experience.

You need to nurture the same skills within everyone in your organization.

Just like Ben Roethlisberger, when your team is down by 2 points with less than two minutes left in the game, you need poise. You need faith that your teammates will execute their jobs as they should, improvising as necessary. You need the confidence that as the rushing defenders (your competitors) try to take you out, that you will make a good decision when it matters, and you and your team’s execution will yield victory. [I apologize if this metaphor is annoying, but I’m writing this just after the Steelers’ victory over the Jets, so I’m a little giddy with football at the moment.]

Concluding Advice

The following pieces of advice concern your relationship with the members of your team. They may appear to be trite, but they contain a lot of truth, so consider them carefully.

• Praise in public. Counsel in private.
• Pass on credit. Take blame.
• People don’t have to like you, but they do have to respect you.

Happy Holidays!

Mr. Czetli informed me that this is the last issue of TechyVent for 2004. I would like to wish all of you a joyous holiday season, and an entrepreneurially prosperous 2005!

Frank Demmler is Associate Teaching Professor of Entrepreneurship at the Donald H. Jones Center for Entrepreneurship at the Tepper School of Business at Carnegie Mellon University. Previously he was president & CEO of the Future Fund, general partner of the Pittsburgh Seed Fund, co-founder & investment advisor to the Western Pennsylvania Adventure Capital Fund, as well as vice president, venture development, for The Enterprise Corporation of Pittsburgh. An archive of this series of articles can be found at my website.