A topic that is often, if not altogether, missed in my entrepreneurship reading is what to do when things go wrong, particularly when you are the one who made the big mistake.
Those who know me well know that I have made mistakes in business and in life. I am grateful for those learning opportunities, and now that I am on the other side, I can’t help but remember the sense of dread that I have brought myself on more than one occasion.
If you find yourself in the midst of a catastrophe or cannot find your way out of a problem, I have three tips for controlling the damage.
Tip #1: Communicate bad news with your stakeholders early and often.
My husband and I spend many family meetings coming clean about something we have done that we aren’t proud of. We’ve set aside Sunday nights for this very purpose (and to remind one another of our love, of course). Practicing difficult conversations on a weekly basis at home has taught me that it is better to rip off the bandaid than prolong the inevitable and that there is a formula for difficult conversations.
In the worst of times, it is best to communicate mistakes made as soon as humanly possible to every stakeholder that your mistake will affect. In a business setting, this includes your board, investors, partners and employees. In difficult environments, trust among your team is most important, and trust is built upon transparency. Those closest to your situation can only support you and move through the problem if they are armed with all of the facts, even if this burns bridges temporarily.
A friend and coach, Reid Mihalko, has shared the following formula for having a difficult conversation:
- Make an appointment with the person for a time in the near future and tell them that you need to share difficult news. This allows the recipient to prepare themselves for a difficult conversation.
- When your appointment has arrived, first remind them that you have difficult news to share.
- Tell them your fears of what their worst reaction may be to the news.
- Share how you hope they will receive the information and react. This gives the recipient the opportunity to weigh their options prior to hearing information that may inflame their anger. It also allows you the opportunity to ask for their understanding and support.
- Tell them about the mistake you have made.
You will find that your recipient will react with more thought and care for you and the situation if you present them with the information honestly and with respect for their feelings.
Tip #2: Avoid the press at all costs.
As a public relations magnet, I have never met a reporter, stage or story I didn't like...until I screwed up. When I made a mistake in my business, the press had a field day with me, triggering me to want to defend myself.
In these instances, I have been coached time and time again to remain silent.
If your mistake will likely result in legal action or criminal or civil liability, any good attorney will tell you to remain silent to protect your fifth amendment privilege against self-incrimination. How quickly we forget this good advice for the lesser mistakes in life.
The press can be vicious, and on a slow news week, your business failure could result in some salacious reading material. It will feel unfair that your side of the story isn’t being told -- that you are being painted by the press in a way that is completely outside of the truth.
Although this may feel like it is going against everything you stand for, I encourage you to stand down. Do not take the bait.
Your stakeholders matter and you have already shared the news with them. The rest of the world is better off hearing about your next success after this hurdle. Fanning the flame will only make it more difficult to push the negative headlines down in a Google search. Sometimes less news is good news.
Tip #3: Forgive yourself and move on.
Upon making a mistake, it is important to take ownership for your actions and express remorse for the impact that your decision had upon those you’ve affected. This is absolutely necessary if you are ever to win the trust of your team again.
However, there comes a time after a mistake when you must move on. Many venture investors have shared that, when a founder fails in their portfolio, they work to re-patriate that founder into a new business, project or concept as quickly as possible, so to not lose them to their own self-shame.
Sitting with your failure for too long will only cause you to stew and fall into self-loathing and pity. Allow yourself the time you need to work through your situation and react negatively. Then, set a deadline for yourself to retire your guilt and hold yourself accountable to creating your next action plan.
Everyone makes mistakes, and the most successful entrepreneurs are able to manage them with little public collateral damage and move on.