It is told that Tom Watson, Sr., CEO of IBM from 1914 to 1956, once had a junior executive lose over $10 million on a risky venture. When the young man was called in for a meeting with Watson, he offered his resignation. Watson replied, “You can’t be serious. We’ve just spent $10 million educating you.”
As I write this, General Motors is facing a crisis because they knew about a mistake in the ignition system of millions of vehicles but did not admit it and tried to cover it up.
If you want a different slant on the idea of mistakes, read on!
- All of us make mistakes and we usually try to cover them up or blame outside forces.
In the creation of the world as found in the Bible, Adam blamed Eve for his mistake and Eve blamed the serpent for hers. It seems to be part of our nature to deflect mistakes from ourselves.
- Failures are important because they are unavoidable in innovation and experimentation.
Companies that highly value innovation often have a company culture that does not ridicule or punish people who make mistakes. The really great ones encourage and rejoice over mistakes.
- People actually think more highly of you if you admit mistakes.
Research has shown that admitting a mistake, especially ones that are controllable, make you appear more in control, more powerful, and create a positive impression.
- Many people do not seek help, even when help is available, because they feel it will make them appear weak.
Research has shown, however, that this is not true most of the time. Guys, that means ask for directions if you are lost! (Interesting side note: Asian men are much more likely to ask for help or admit mistakes than Western men, while Asian and Western women ask for help and admit mistakes at about the same rate.)
- These things are true for individuals and for companies.
In one research project, people were given identical company reports except that one report blamed outside forces and one company blamed inside factors. The company that blamed internal factors was rated higher than the company that placed blame outside the company. The same was found in the “real world.” Researchers followed companies who admitted mistakes in their annual reports and did not blame outside factors and found that these companies had a higher stock price after one year than companies that blamed outside forces for their problems in their annual reports.
Here are some take-aways.
- If you value innovation, don’t be afraid of mistakes.
- When you do make a mistake, admit it early and loudly.
- Don’t be afraid to seek help if it is available and you need it.
- If you are in a position of leadership, admit your own mistakes and cultivate a culture of innovation where it is okay to make and admit mistakes without embarrassment.