This Issue: Learn from Setbacks and Mistakes

Is this a blip, or is it a catastrophe?

The way we handle difficult situations in life says a lot about who we are. How we view them is also an important element in how we will deal with adversity. Some events will wipe out one person, but will make another person even more tenacious. That’s why I always ask myself, “Is this a blip, or is it a catastrophe?” The question helps me to focus in the midst of bad news.

You’ve heard me talk about passion before--how it’s a necessary ingredient for success. Reason is also necessary, and when we experience setbacks and mistakes, that's the time to employ reason or objectivity. Reason sets us up to learn something from the experience. It’s like the old saying about when one door closes, another door opens. I see that as meaning there’s another chance, another opportunity waiting, but we have to be open to it. I’ve known some people who could be staring at an open door and not even see that it’s open, let alone realize its significance.

I can remember when things turned around for me in a big way, and what I learned is that you have to maintain your focus and your momentum at all times. You’ve heard me mention those two success tips before. I learned about them the hard way: I had lost my focus and suddenly I was faced with some major setbacks, but I kept moving forward while trying to learn from the mistakes. Your problems can be temporary if you keep your momentum moving forward. We all experience difficulties, but they can be blips if we remain positive and move on.

When I decide to do something, I have enough experience to expect problems. Rarely is anything that’s worth doing just a breeze. Sometimes I feel like Sisyphus, who was condemned to roll a boulder uphill for eternity. That’s just the way it is sometimes. So I just keep going; I don’t give up. My focus is intense enough to make the effort worth it, and my momentum makes sure that my efforts won’t be futile. I have learned a lot because of demanding situations.

One way to avoid mishandling mistakes is to realize they can happen to us every day. It’s a way of being prepared, without being a pessimist. Problems, setbacks, mistakes, and losses are all a part of life. It’s something we have to accept. We shouldn’t be shocked if and when they happen. Don’t let things knock you off your feet or off your rocker either. Keep your equilibrium by knowing what you’re dealing with. If you are taken by surprise, then by all means, ask yourself what you’ve learned from the experience. Don’t just go out and make the same mistake again and hope for the best. You’ll be getting a lot of the same hard knocks and tough lessons over and over again if you don’t assess your situation each and every time.

Here’s where the going gets tricky. You have to know when to call it quits and when to keep moving forward. There’s always that fine line between acceptance and resignation. Sometimes it’s not so fine, as when you find out someone is a scoundrel and nothing’s going to change them. Then, it’s wise to break off the relationship. Other times, we have to realize that everyone makes mistakes, and try to be a little more accepting of that fact. Just as you don’t want to give up on yourself, you can’t always just give up on other people either. That’s where experience and discernment will come in. But what’s most important is to never give up on yourself. You never know when the tide is going to turn in your favor, provided you have been paying attention and working towards something worthwhile.

There was a time, early in my real estate career, when I was trying to get a deal done, and I thought I’d endured and worked through every obstacle possible. Wrong. It took me two months more of hammering away at the details until I arrived at what was considered a done deal. Had I known what I was going to have to go through from the beginning, I’m not sure I would have had the fortitude to go for it or to stick it out. But I’m glad I did. It was my first big success--the renovation of the Grand Hyatt Hotel at Grand Central. Did I learn a lot? You bet I did. Every setback gave me a great lesson, and I was becoming a very educated man in the process.

You have to be the same way, and you can be the same way. Just be tough, be strong, be willing to learn, and you will learn. So don’t be afraid of mistakes or setbacks. They can be your learning tools on the way to building something great for yourself. We all have something to learn today. Remember that and your chances for success will increase dramatically. You’ve heard me say to think big. Learning big is up there too. So let’s get to it!

Mention the word "failure" to almost any group of up-the-corporate-ladder types and you may detect some nervous twitches. For these cube-dwellers, a mistake or setback is often a career-stopper, or, at least, a blot on the record. Playing it safe is seen as the best way to avoid a misstep that could send them sliding down the proverbial career ladder.

Yet, talk to an entrepreneur or an enlightened CEO who sees innovation and creativity as the path to profitability and long term sustainability, and they will talk openly about failures, mistakes, and setbacks as steps along the path to success.

Seasoned venture capitalists will spend a lot of time delving into an entrepreneur’s past failures because they know that experience with setbacks in high-risk, high-growth ventures makes an entrepreneur more flexible and responsive. In other words, future success stems in part from past mistakes, or even failure.

Thomas Edison, one of the post-industrial age’s most prolific inventors, laid the foundation for the Fortune 500 company, General Electric. Edison is remembered, not only for his inventive genius, but also for his high propensity toward failure. Even after he had a long track record of commercial success, he failed miserably in “ Edison’s Folly,” a late-career effort to revolutionize the iron ore processing industry. Despite numerous missteps, he kept trying until he finally succeeded in developing this industry process.

As a child, Edison was considered “slow” by his teachers so he had to be home-schooled. Yet this setback--his failure at traditional school-- may have been what allowed Edison to receive the attention and nurturing that led to his curiosity, persistence, and ultimate success. Edison himself acknowledged his failures. “I have not failed. I've just found 10,000 ways that won't work,” he would say.

Organizations, not just individuals, can also learn from mistakes. Boeing became a success in the passenger jet market with its workhorse, the Boeing 707, by learning from the tragic design flaw in the Comet, the first passenger jet to be extensively used in commercial air travel. By studying metal fatigue design failures in the Comet that literally caused its wings to fall off in mid-flight, Boeing engineered into its 707 the wingspan “flex” that is common to airplane design today.

What we can take from successes stories like Thomas Edison is that the path to success has many milestones--some are positive and productive, and some are setbacks. It’s not what we lose from the setbacks, but rather what we learn and apply that make the future a success.

In today's business world, more people are making bigger decisions in less time and with less information than ever. That also means people are messing up more than ever. The flip side of making progress is making mistakes.

If you're not making mistakes, you're not taking risks, and that means you're not going anywhere. The key is to encounter those errors sooner than your competitors, so you have more chances to learn and win.

Risking failure to learn something new makes sense, but it's difficult advice to heed for the risk-averse. The idea that it's possible (or even desirable) to create organizations in which mistakes are rare or non-existent is a delusion. Failure is a necessary cost of doing business. Assuming otherwise only encourages employees to hide mistakes, shift the blame for them, or pretend they're something else.

The quest for perfection demonizes error, but small mistakes can be great learning opportunities. They show cracks--areas of vulnerability--that can cost the future viability of a company.

How can you make mistakes work for you? Here are some tips on how to learn from and minimize the setbacks that come with moving forward.

1. The cover-up is always worse than the crime. This is the favorite aphorism of Washington politicians, many of whom ignore their own advice the moment something goes wrong. Don't wait to tell the people who need to know when a problem arises. The best damage control is to preempt complaints before they happen.
2. If it's your team, it's your mistake. Taking ownership of a mistake is a powerful way to exude a sense of accountability. You demonstrate that you've got things under control and that you're a leader. People will forget the mistake, but they'll remember your behavior.
3. Follow-up is as important as follow-through. Plenty of mistakes can be buried before anyone finds out. Quickly remedied, with few repercussions, these mistakes are the kind that most people fix and forget. They are also the kind most likely to need thorough investigation. Simple mistakes don't always have simple causes; they can be the result of systemic problems that will recur if not corrected.
4. Seize the moment of truth. A luxury hotel loses track of a valued guest's reservation. An airline loses a passenger's luggage. Whenever such problems surface, there's a brief period during which front-line employees can turn a bad situation into a memorable one. If front-liners act wisely, a disgruntled customer walks away with renewed faith in the company. If they don't, the company may never get a second chance. Customer-service gurus call these encounters "moments of truth." There are moments of truth inside a company, too, rare times when people can gather to learn from their mistakes. A general rule for when to initiate these moments of truth: the sooner, the better.
5. Sometimes the best fix is a quick fix. For people struggling to keep up with the dizzying pace of life inside startups, professional service firms, and other fast-growing companies, getting smarter about mistakes can seem like a worthwhile goal that's out of reach. Who has time for official postmortems or learning plans? Especially when the next round of mistakes is around the corner.

If you're adept at self-coaching, you can learn the most valuable lessons from your mistakes within minutes after they happen -- if you actually use those minutes to think about what went wrong.