Learning from Mistakes

image about learning from mistakesWhen bad things happen to good companies, it’s important to understand what went wrong. After all, every organization, like every individual, makes mistakes from time to time. Unless the error is so horrendous that it forces a business to close its doors, the best thing the senior leadership team can do is to conduct a post mortem to understand why the mistake occurred. Then, changes can be made to reduce the risk of a similar problem in the future.

Here are some good questions to consider when analyzing an organizational mistake:

  • Was it due to an individual’s error in judgment? If so, do senior leaders need to check in with their colleagues for a second opinion before making similar decisions in the future?
  • Did the problem result from confusion about individual roles and responsibilities? If so, the organization might need to provide clearer job descriptions or better training.
  • Did the error signal a problem in the corporate culture, such as a win-at-all-costs mentality, for example? Is there a need to reassess the corporate values or provide more training to managers and employees?
  • Was there a prudent assessment of risks, or did a flawed assumption lead to the mistake? For example, many businesses were over-leveraged when the 2008 meltdown on Wall Street occurred.
  • Did the error occur during a crisis situation? If so, why did the crisis occur and how was it handled? There is a long list of companies that actually made matters worse by making poor decisions in the aftermath of the financial meltdown.
  • Was the mistake the outcome of a longer-term strategy, such as acquiring a competitor without proper due diligence or expanding to a new market without adequate research?

One of the basic rules of life—for organizations as well as individuals—is that we tend to learn more from our mistakes than our successes. Therefore, successful and sustainable organizations make sure they take the time to learn from their errors, and take any needed corrective action in order to get back on the right course.

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