Everyone makes mistakes but how you respond to them will have a big impact on your business
How do you deal with mistakes in your business? I mean the really big mistakes that probably have serious consequences.
For example, a mis-click that buys the wrong investment for a client, costing them money. Or a mistake that has significant negative tax consequences for a client.
Most firms I know would like to think that they’ve taken steps to minimise mistakes, by designing good processes, hiring good people, etc. However, big mistakes are almost inevitable at some point on your journey, so it feels appropriate to have a plan for how to deal with them. Praying that it never happens to you is not a plan.
Making a mistake doesn’t make you an unethical business. However, if you’re not careful, how you deal with the fallout from a mistake might push you into the unethical category. The starting point is to honestly assess your culture.
Do you want staff members to let you know of any big mistakes? If you answered ‘yes’, as I’m sure you did, does your culture make it safe for people to own up to their errors? You can’t wish for your team to act this way and then be cranky or a bully.
Any plan for dealing with major mistakes should be driven by the whole business, not just solely dealt with by the individual who made the error. It’s important that the most senior and most experienced members of the team are involved in the response too.
Why? Because you only get one chance to handle this right. If you inadvertently get off on the wrong foot with your response, you might never recover with the affected client. That could have serious reputational ripples out in the marketplace.
The next step in limiting damage is to create an agreed process that everyone on the team will follow if a mistake occurs. In a recent edition of Bob Veres’ Inside Information, he related some of the planning done by Roy Ballentine of US firm Ballentine Partners, along with behavioural psychologist and business coach James Grubman. They have devised a programme called A Proper Apology, which forms part of the annual training for every member of the team, including all the executives.
A Proper Apology follows four defined steps:
- Report the mistake to management, so the firm can muster its resources and plan its response;
- Inform the client of the mistake and what you’re doing in response to it;
- If the client is harmed, make the client whole;
- After dealing with the immediate consequences, engage in an analysis to figure out how to prevent a similar mistake from occurring.
Ballentine says: “Team members learn in that training session, that if they follow our protocol, they have a very good chance of surviving even a serious mistake and possibly even flourishing afterwards. If they fail to follow the protocol, they will be removed from the team; and we explicitly state that during the training session, to make sure that everybody understands.”
The underlying principle is treat people as you’d expect to be treated. Yet how many times have you found yourself on the receiving end of a poor customer service experience, from a person or organisation that doesn’t seem willing or able to address the error head-on? To feel good at the end of the process a few things have to happen:
- The mistake needs to be admitted and owned by whoever made it;
- The mistake needs to rectified as far as that is possible;
- The person or organisation needs to take steps (and communicate them to you) that will prevent the same mistake occurring again.
The last bullet point here is very, very important. If the offending person or organisation admits the mistake and makes it right for you but doesn’t seem to do anything about preventing it happening again, there’s no rebuilding of trust.
Often a poor complaints handling experience occurs because of our need to be right. Don’t think this applies to you? Just check in with your spouse, partner or children. It affects us all to some extent. We need to be mindful of that in responding to our mistakes.
All the value that can be derived from a mistake comes from the teaching or learning moments after.
- What does the mistake allow the team member(s) to learn?
- What does the mistake allow the business to learn?
If you can improve your team and your business off the back of a stuff-up, then you’ve got a better business. Not only that, if you can handle the situation with a clear process that the whole team follows, you can even find that trust levels move upwards, beyond where they were before the mistake was made. High-quality mistake handling can even drive increased rates of referral from the aggrieved party.
Mistakes are inevitable. It’s how you deal with them that makes all the difference.
Brett Davidson is founder of FP Advance