The Mistake of Your Life
What will you do when you make the mistake of your life?
I took my current job as the executive director for our non-profit, for-fee center in 2005. Previously the center had been fully grant funded. As I studied the center, the job, the strategy for the future, the current business case (or lack of one), I determined that the only way we could execute our mission – essentially executive coaching – was to run a successful business not run a successful non-profit. If we could pull of the former, the latter would come. Another way to think about it is this: if we can run a “profitable” business case (in non-profit terms, one that generates a healthy surplus) grant-funding would follow for capitalization and R&D.
It was a good plan. The new model held all of our grant funding in separate accounts so our operating budget had to be fully funded and then some by revenue generated through executive coaching, training, etc.. At the end of the fiscal year we were showing a very healthy surplus in excess of 20%. I was amazed. I was full of pride. I was foolish.
Within weeks, we had uncovered a large accounting error – the biggest mistake of my life – one that turned our surplus into a loss.
I had blown it. I had really blown it. The mistake might have cost us a lot.
How We Responded to the Mistake
I had a couple of options at that point. I could have freaked out and found someone to blame and someone to fire. The KCOE System (the Operational Excellence System) regulated me, though, and I was able to calm down and think clearly. Here is what I did:
1. I got control of my emotions. I left the office for a little while and took a walk on our campus. I came back and declared that we would do something about it tomorrow – I needed time to think about the mistake.
2. I went home and did some problem solving that focused not on the person but on the process. My root cause analysis led me down several pathways. I could return in the morning and follow the pathways that led to others’ work, but instead, I chose to follow the root cause pathways that led to my decisions. Early in the year I had some bad comprehension, judgment and analysis around our accounting processes. This led to poor decision making and – worse – the failure to create sustainable PDCA cycles…my real mistake.
3. I declared the problem a blessing. Had we gotten too far along in the next fiscal year, the mistake would have cost us quite a bit of ground in terms of cash flow. Because of our culture, we had avoided disaster and had time to solve the problem and correct the mistake.
Let’s face it: you’ve made some big mistakes. Some where huge. You’ve probably lived to tell about them. What did you learn? More importantly, what can you teach others by your reaction.
Mistake 101: Live and Learn
The people who watched my reaction went on to show the same grace under fire, especially when dealing with their own teams. Check out more on failure and mistakes via our 30 Second Coaching segment on lean failures. While the mistake was hard to live down, the seeds we planted are still yielding good fruit. Think about it – and don’t make a mistake.