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- [00:06]
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There's only one thing worse than making a mistake as a leader. Handling it the wrong way. It's just a fact. In business you're gonna screw up something. Often that's part of the job. But how you respond will either build trust with your team and your customers or completely destroy it. So today, Entree Leadership's head coach, John Felkins is walking through how great leaders handle mistakes and without losing respect and credibility. Let's get to it.
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Thanks, Dave. Well, unfortunately, this reminds me of a story from early in my career at this company. We were building our coaching program and I was driving hard, being really decisive and getting results and focusing on the vision. But the thing that I didn't focus on was taking care of people and being empathetic. I was burning people out and just honestly kind of seeing people as units of production. What I started to realize was people didn't want to work with me. They'd see me coming across the office and they'd say, what do you want? And I was kind of funny at first, but then I started to realize this isn't working. And actually I didn't learn it fast enough because the truth is I got demoted. I got taken out of leadership, and that was one of the hardest things I've ever experienced in my career. It forced me to realize what had gotten me to that point wasn't going to get me to where I wanted to go. I get it. Messing up as a leader sucks. It can be a real shock to your confidence. It's hard on the ego. You're going to feel embarrassed and ashamed, humiliated. And it's not what you want your team to see you as. You want them to see you as capable and competent, someone who's got it all figured out. But leaders don't lose trust when they make mistakes. They lose trust when they don't own them. The temptation is to self protect or self promote after you've made a mistake. That's because shame and pride are the two sides of the same coin. Shame makes you hide the mistake. Pride causes you to excuse or pass the blame. So you avoid the mistake, you minimize the problem, you blame someone else, you try and cover it up. And that's not a lack of competence anymore. That's not just a mistake anymore. Now it's a lack of integrity. And if there's no ownership to the mistake, there's no trust. How you handle small mistakes is how you're going to handle big mistakes. It's like a muscle that you train. You need to do it right and what you put out is what you get back. A lack of integrity will infect the culture of your team. That will create a toxic culture where no one feels safe to make mistakes. Problems don't get surfaced until it's too late. Everyone promotes themselves or protects themselves. This has led to not only major failures, but major cover ups, even illegal cover ups scandals. And it's happened to some of the biggest companies in the world. Reminds me of Wells Fargo in 2016, where their employees created millions of fake accounts and customers names without consent to pad their sales numbers. And that cost customers millions in fees they never agreed to. Wells Fargo got a 3,3 billion dollar penalty to settle the incident. It was a huge hit to the company's reputation. Also Volkswagen, they had a scandal in 2015 called Dieselgate. They knowingly installed defeat devices in several models that would cheat emissions tests. They were forced to spend $10 billion to buy back or pay off the loans of affected vehicles and another $4.7 billion to deal with the pollution that they had caused. A business with no integrity starts with a leader with no integrity. How you model making mistakes and how you handle them is how your entire company will handle mistakes. So you've got to get this right. Great leaders do three things when they make mistakes. And I can't think of another leader who's done that better than Alan Mullally. When he became CEO of Ford in 2006, the company was a mess. It had lost $12.7 billion that year and that was its worst year in company history. The culture was toxic. Leaders were blaming each other for mistakes. Leaders had glowing reports. Even if the projects were losing money. Issues were downplayed or never brought up at all. And at the first meeting with executives, they all told Allen everything was great, everything was green. But later on, one of the executives did something no one had done before. He admitted his department was failing. And what was Mulally's reaction? He cheered. He literally clapped in the meeting. And he thanked him for his honesty. It was a total cultural shift to celebrate owning a mistake. That move completely turned ford around. Just three years later, when GM and Chrysler declared bankruptcy, Ford posted a $2.7 billion profit. So what can we learn from Mulally? What are the steps to recovering from a mistake? Well, the first and the hardest part is to just own it. Just own it. As a leader, that's going to require courage. You have to admit the mistake to yourself first and then admit it to your team. Don't diminish it or make excuses and don't over own a mistake and fall on your sword. People are going to know that's not honest either. But own your part and move on. Don't wait until the stakes are high to do this, because you won't. Remember how you handle small mistakes is how you're going to handle big mistakes. So practice when the stakes are low. For example, if you unintentionally hurt somebody's feelings in a meeting, handle it the right way. Say, hey, I messed up. I'm sorry about that. Intentionally practice courage until it becomes muscle memory. Mullally set up a weekly performance meeting with senior leaders and it had one rule, no blaming for servicing problems. He made it really clear that nobody gets shot for telling the truth. The fancy way of saying that is he created psychological safety within his leadership team. They got comfortable sharing their mistakes because Mullally helped them understand they had a problem instead of they were a problem. That's what your team needs to hear. That's what you need to hear. I'm going to give you a chance right now to practice this. What's a recent mistake you've made as a leader? Drop a comment below. This is a no blame comment section. Owning the mistake is the first step. But that's not all. It's not enough to say I'm sorry and hope everything goes away. Hope everybody forgives you and forgets you'll never regain trust that way. A mistake means some damage has been done and the next step is to repair it. You need the discipline to take action. Action speaks louder than words. You say, here's what happened and here's what we're going to do to make it right. Starbucks is a perfect example of this. In 2016, two black men were arrested for trespassing in one of their stores. Only problem was they weren't trespassing. They were waiting for someone and hadn't ordered anything. The public went ballistic. Starbucks didn't just apologize, they took action to make sure it didn't happen again. They closed over 8,000 stores for an entire day to run racial bias training for their employees. And then there's the Johnson and Johnson Tylenol story where in 1982, seven people died after taking Tylenol laced with cyanide. The company issued a nationwide recall pulling 31 million bottles of Tylenol from the shelves. $100 million was invested to develop a tamper proof packaging that we still use today. They weren't even the ones who made the mistake, but they did whatever it took to make it right. You see, great leaders Ask three questions after a mistake. What happened? Why did it happen? And what needs to change so it never happens again? These are the same questions you want your team to ask when they mess up too. Owning and repairing your mistakes is 80% of the effort. But if you don't do the last part, you'll restart the cycle over and over again. But before we keep going, I want to talk about culture. A healthy company culture always starts with its leaders, AKA you. If a leader with no integrity creates a team with no integrity, then overworked, overwhelmed leaders create overworked and overwhelmed teams. That's how that works. And that's what my friends at Belay see happen all the time. If you're buried in your inbox, running from meeting to meeting and constantly reacting instead of leading, eventually your team feels that pressure too. And over time, that stress becomes the culture. That's why Belay matches leaders with executive assistants who can take those repetitive day to day tasks off their plate and help them create some margin again. When leaders finally have space to think, communicate clearly and cast vision, healthy culture gets built on purpose, not by accident. And look, I know the people at Belay. I've worked with their CEO and their leadership team for years. They truly want to help you. And if you want to fix your stressed out, chaotic company culture and learn how an assistant may be able to help with that, Belay has a free resource for you. It's called Culture Clarity. You can download it for free by texting Entrez to 55123 that's Entre 255123. Okay. The final and arguably most important step to recovering from a mistake is learning from it. The best leaders aren't the ones who always get it right. They're the ones who don't get the same thing wrong over and over again. If you set your benchmark for being okay at perfection, you'll never stretch yourself. You'll never try anything. You will get stuck in a ruthless but when you set the benchmark to getting better every day, it changes the culture of your business. Mulally was honest, vulnerable and he openly admitted he didn't have all the answers. He asked a lot of questions he was willing to learn. Your vulnerability will show your team they don't have to be perfect either. This will create a culture that values progress over perfection. So own it, repair it, and learn from it. Those are the steps. They all come back to you as a leader. Having integrity. Leaders with a fanatical amount of integrity tend to be the most successful. They're the ones who bounce back from mistakes stronger and wiser. When you own your mistakes with courage and humility and discipline, you don't lose respect, you earn it.
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Failure in business is inevitable, but it's rarely fatal. You can recover from almost any mistake, but you can't recover from the mistakes you don't even know you're making. Every leader has blind spots. Wise leaders put people around them who will hold up a mirror and tell them the truth before those blind spots turn into disasters. That's why we built our coaching team to help business owners like you see the problems you can't see on your own. So if you want help getting unstuck, schedule a free 30 minute consultation with one of our coaches using the link in the description. And if you enjoyed this episode, be sure to like and subscribe for more real world leadership content. I'm your host Dave Ramsey and this is Entree Leadership.