By Iñigo Gallo
Your pitch falls flat. Your new hire walks out. Your project goes bust.
Failures like these are inevitable for business leaders, especially those who innovate and take risks. Most see such missteps as purely negative experiences and try to sweep them under the rug.
As a professor of marketing and sales, I’m naturally passionate about learning. That includes learning from mistakes, whether my organization’s or my own. While errors can be uncomfortable in the moment, they also represent valuable opportunities to gain insights and grow personally and professionally.
By themselves, mistakes are not good, of course, and when you can avoid them, you should. But mistakes are a part of business, just as they’re a part of life. And approaching mistakes with humility, transparency, and confidence takes practice, but it’s an invaluable skill for developing as a leader.
The Silver Lining to Veering Off Track
Elena Betés Novoa has made her fair share of mistakes. The entrepreneur, who earned her MBA at IESE, founded insurance comparison platform Rastreator in 2008 and sold it and other platforms in 2021 for US$620 million. She’s no stranger to success; she’s appeared in the Forbes Top 100 Most Creative Spain list and won the International Women’s Entrepreneurial Challenge award.
Despite her successes, Betés freely admits to having experienced business failures: not knowing enough about technology when she founded her first company, failing to raise capital for a venture, overestimating the cost of acquiring certain businesses. And as Betés is dyslexic, she’s used to making minor blunders on a regular basis.
When I spoke with Betés recently in the podcast series This Is Real Leadership, she didn’t see these setbacks as damaging. On the contrary: “I don’t think I would have succeeded without mistakes,” she told me. And although she often deliberately chooses to work with risk, she does so in pursuit of true innovation.
Based on her experience, Betés shared what she’s learned about the benefits of failure:
– Failure can bring you closer to your team. When Betés’s company went bankrupt, the reactions of team members taught her a lot about them. “When you close a business, you see the best and the worst of people,” she said.
For the vast majority of her employees, the experience strengthened bonds and clarified priorities. Most remained with her as she started successful new businesses. “Entities are entities,” she said, “but what matters is people.”
– Failure can help you build trust. Seeing the bright side of mistakes doesn’t mean glossing over them. Moving forward starts with taking responsibility for errors rather than passing the buck.
When she makes a wrong move, Betés is brutally honest with the corporate board that oversees her. “I go to them and say, ‘You should fire me because of that,’” she said. “I’m not minimizing the mistakes.…I own them.” That transparency lays the groundwork for trust and learning.
– Failure is a learning opportunity. Mistakes happen for any number of reasons: misplaced priorities, unwise hires, constrained resources. By quickly analyzing what’s gone wrong, leaders can identify larger problems and implement solutions. “It’s about exploring what happened, instead of who is to blame,” Betés said.
Of course, failure has its limits. And that includes the failure to learn from failure. When a team member repeats the same errors, that can be a sign that they’re a poor fit. “We don’t fire anybody for making mistakes. We fire people for not learning from the mistakes they made,” she said.
– Failure supports a culture of innovation. Leaders who never fail aren’t experimenting, innovating, or growing. “I make mistakes every day, and if I didn’t, I wouldn’t be evolving,” Betés said. “This gives me the freedom to try new things.”
Normalizing mistakes can signal to team members that failure is acceptable on the road to progress, boosting innovation and leading to more-satisfied workers. “You let [employees] make mistakes, you let them learn, you push them out of their comfort zone—and this tends to be fun,” she said.
A Balanced Approach to Mistakes
To be sure, making mistakes isn’t pleasant.
During my first year as a business school professor, I was nervous to have other professors observe me in class, and I tried to avoid the situation as much as possible. But over time, I realized that I should have done the opposite: I should have sought out their valuable feedback early and often so I could minimize my mistakes and perform
Gleaning insights on how to improve from a third party who is invested in your development is a fantastic way to grow. But that takes hard work. It can’t happen without going through the pain of exposing and acknowledging your weak spots and shortcomings.
No one would advise striving to fail. Errors can have serious consequences. But mistakes are inevitable, because we’re human. They’re going to happen, so when they do, the best leaders take a balanced approach by neither romanticizing mistakes nor scorning them.
Having an overarching vision of success can help leaders and managers apply the lessons they learn from their missteps to stay on course and grow professionally and personally. Acknowledging and learning from wrong turns helps leaders make their teams and businesses stronger. Failing to take advantage of the opportunities mistakes present may be the biggest leadership mistake of all.
Iñigo Gallo is an associate professor of marketing at IESE Business School with campuses in Barcelona and Madrid (Spain), New York, Munich and Sao Paulo.
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