Jason Foodman is an Entrepreneur, Board Member & CEO. Foodman is the President of Rosy Salon Software.
Humans aren’t machines—a fault made by a human doesn’t make a faulty human. Mistakes are a simple fact of life and are equally factual in business. Some errors happen internally and some occur in the careful gaze of paying customers; some are small and some have real material impact. How a leader or manager handles them often has a significant impact in terms of customer relationships and employee job satisfaction. For those external mistakes, customer satisfaction and sentiment are at stake (along with investors and general public opinion). In general, a good leader focuses not on allocating blame but on seizing the opportunity to learn, to improve and to show what the company really stands for.
The mistakes of a business may be divided into two broad categories: internal and external. Internal mistakes affect the business but are unseen by customers, while external mistakes are typically seen by the public and likely affect paying customers directly. This article explores errors made by individuals within an organization, rather than security-related, legal or other external factors which impact a business. Which type of mistake occurred should guide the approach in addressing it.
Internal Mistakes
In a typical company, decisions are made, actions are taken and volumes of information are processed. Even with the best of intentions, it’s only natural for mistakes to happen. In some R&D-focused cultures, mistakes are even desirable, as a lack of failure likely means the company isn’t moving fast enough. While the situation obviously differs when malicious workers exist in an organization, it’s important to assume the best intentions unless there’s concrete evidence to the contrary. When honest mistakes happen, the right approach is to not seek blame but to seek understanding and improvement. As a leader, here are three key actions to take when internal mistakes happen:
1. Assess
In some situations, analysis will show that the systems and processes a corporation has in place (or external situations out of control) made that mistake very likely. It is important to remain calm. Then properly assess, explore and analyze what went wrong and why. If blame is required at this early stage (it isn’t), blame yourself before blaming anyone else.
2. Mitigate
Blame is not a useful tool in a healthy work environment. If blame enters the picture, it can demotivate the employee at fault and mire their relationships and productivity. Accusations on the whole generally create a sense of disempowerment across an organization and create workers who underperform because they feel they cannot perform. Instead, thank the person for their effort and assure them you know it was an honest mistake. Appreciate them taking ownership and trust them to do better the next time.
3. Improve
Treat the incident as a chance for improvement and consider what caused the mistake to happen. Examine carefully your processes, systems, lines of communication and more to see what fixes you can make such that your organization becomes more efficient and less error-prone.
External Mistakes
When your company makes a mistake that directly impacts a customer, view the moment as an opportunity to exceed expectations, improve sentiment and improve processes. If the situation is handled effectively, you can generate goodwill with your otherwise upset customer. Here are the four key steps to resolving a customer’s issue:
1. Apologize
Don’t pass the blame, don’t try to turn it around on the customer in some way and don’t respond without an apology. Begin your customer response with a sincere, “I am/we are very sorry. This was a mistake on our part.”
2. Explain
Let the customer know what happened and why it happened. Be transparent and honest, as far as can be done without disclosing employee or business confidential information. Summarize, but don’t try to hide behind ambiguity. Take accountability.
3. Resolve
Tell the customer what you are doing for them to make it right. This is a pivotal moment where you have the opportunity to exceed their expectations and turn them from an unhappy customer into a fan—potentially even a promoter.
4. Learn
This is the perfect time to examine what happened, why it happened and evaluate if processes, communications or systems within the company can be adjusted or improved to ensure a better experience for everyone going forward. Note that this internal effort should also not be conducted from a blame standpoint, assuming nothing malicious has happened and everyone was trying their best—this is an opportunity and it should be treated as such. Errors tend to repeat themselves unless improvements occur so don’t just ignore what happened.
Whether a mistake be internal or external, the responses share some similarities. The point is to embrace the situation, take responsibility, make lemons into lemonade and use the moment as an opportunity to improve. Often when an external mistake happens, companies take a bad situation and make it worse with a lack apology, no reponse or an accusatory response. Using the techniques above, mistakes can be turned into growth opportunities for the business, and customers can be turned from sharing negative sentiments to being fans and even promoters.
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