Business Success, Admitting Failure Interrelated

Two reports suggest business leaders fall sadly short in admitting when they've made a mistake or need to consider a new direction. Experts say such honesty and transparency could boost performance, productivity and the bottom line.

Monday, December 2, 2013
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Two recent reports suggest business leaders think they're better at admitting their mistakes and encouraging employees to do likewise than they actually are.

One, Driving Business Results by Building Trust from Boston-based Forum Corp., finds that while most leaders (75 percent) say they encourage employees to learn from mistakes and about the same percentage say they acknowledge their own mistakes "often" or "always," only 46 percent of employees say they get that kind of encouragement, and only a meager 16 percent say their leaders come clean and fess up "often" or "always."

What most business leaders apparently haven't been buying into is the notion that openly admitting mistakes can, according to the report, provide them "with opportunities to build trust and foster learning" over the course of their working days. And trust and employee engagement go hand in hand, as do employee engagement and the bottom line, the report says.

" ... [L]eaders have a major opportunity [in admitting when they're wrong] to increase employee engagement by building trust, and thereby enhancing business performance," the report says. The good news from the survey of 711 leaders and 237 employees is that most leaders gave building trust a high priority, with more than 95 percent rating that as "great" or "very great" in importance.

So, if the connections between trust and engagement and engagement and performance seem pretty clear, why aren't leaders doing everything they can to build that trust, including admitting mistakes and simply being human in front of their workforce?

When Forum asked leaders why they were reluctant to apologize, the report says, "the most frequent comments related to their image or reputation: They didn't want to look weak or incompetent."

Yet, clamming up to appear strong can actually weaken a business outcome. It can also compromise -- even derail -- projects, according to this post by Gretchen Gavett: "The Hidden Indicators of a Failing Project," on the Harvard Business Review's HBR Blog Network. Gavett quotes Matthew McWha, the practice manager at Arlington, Va.-based CEB, who points out that there's "a lot of perceived personal risk in saying, 'I'm managing a failing project.' Or people actually think they can turn it around, so they don't bring it up. They think they're better off trying like the dickens to recover it in the meantime."

According to McWha, the culture of project management often discourages the raising of important red flags that could turn problem projects around. On the contrary, the No. 1 driver of successful projects is a great manager who isn't just "good at conducting the trains," he says, "[but is] able to manage stakeholders and risk, and be comfortable adapting and changing course if necessary" ... i.e., if and when mistakes are made or a failed course comes to light.

Leadership expert Roxi Hewertson couldn't agree more. "When I say 'I'm sorry' as a leader, it ups the credibility all around me because people believe [I'm] being humble" and, yes, human, says the CEO of Trumansburg, N.Y.-based Highland Consulting Group Inc. and creator of the website.

"The problem is," she says, "we're just not an 'I'm sorry' society. People just don't think about it. Managers and leaders just don't have skills around it." And men are more reluctant to admit fault than women, she adds.

Because failing to fess up is a cultural issue, says Hewertson, it's up to HR leaders to "hit this head-on" -- first, by assessing the culture to "see what's going on" among project leaders and managers who think they're being transparent but may not be when you ask the people they supervise.

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Through communication, training and leadership-development efforts, HR executives and practitioners need to be stressing that leaders must model the right behavior. "If leaders aren't modeling the apologizing," Hewertson says, "then it's not going to translate down and employees will then become more secretive ... and there will be no trust."

The right behavior at the top also impacts job safety, she adds. "If my leaders never apologize or I don't perceive them apologizing," or, worse yet, they look to blame others, Hewertson says, "then I as an employee will be more afraid and will be covering my rear end more. So employees are taking their cues from their leaders: 'Am I going to be accused of something or aren't I?'

"And, by the way," she says, "if something goes wrong that appears to have nothing to do with a manager or leader, then the leader needs to look within and say, 'Wait, what's my responsibility in all this? Did I hire wrong? Did I train wrong? Did I reward wrong?'

"It's really interesting, I've seen in my experience that, when the leader takes responsibility, the culture immediately gets much better, because that leader has just made it OK for other people to own their mistakes," says Hewertson.

It's up to HR, she says, to train managers and leaders to "think about the relationship stuff before they think about the task."

Thinking and measuring the right things is a theme of Gavett's blog post, too. She cites research from Bent Flyvbjerg, author of Megaprojects: An Anatomy of Ambition, and his Oxford colleague Alexander Budzier in her argument that too many projects are measured by time and budget instead of business outcomes.

"In the end," she writes, "even the drivers of ... successful projects aren't actually technical, Flyvbjerg and Budzier explained: They largely involve the project's environment, whether there's organizational resistance, and how risk is being managed. All of these internal indicators, combined with our own human perceptions about what we can and can't do or say, play into whether projects are headed for [success or for] a head-in-your-hands kind of moment."

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