September 28, 2016 by Mark Hammerstrom
“Never interrupt your enemy when he is making a mistake.” ― Napoléon Bonaparte
I gather Napoleon uttered this line before he got to Moscow. Or perhaps the Russian Field Marshal Kutuzov took it to heart and made it a point not to interrupt Napoleon in the midst of one of Napoleon’s biggest mistakes. The rest, as it is said, is history.
Yes, we all make mistakes. How we handle correcting them, let alone admitting them, is a true test of our character, the character of those we know and work with, and the character of the companies we work for and do business with.
Elizabeth MacBride, writing for CNBC, discusses the subject of making mistakes and what to do about them, especially in light of the recent Wells Fargo “debacle.”
As you may recall this ‘mistake’ caused horrific damage to the bank when it was discovered that “…over 5,300 employees…opened fee-generating accounts for customers without authorization, ultimately leading to the Senate grilling for Wells Fargo CEO John Stumpf…”.
Not only a grilling for the CEO, but the loss of jobs for those 5,300 employees. A big company, yes, but the breadth of that number is staggering.
Adding insult to injury, Stumpf and some of his senior executive team “…first placed the blame on certain Wells Fargo employees and denied any problem with the bank’s culture. ‘Underperformers’ was the term they used to define the culprits.” Ouch. 5,300 underperformers? The fact that it went undetected for so long simply does lend credibility to a statement like that.
By the time the ‘debacle’ had hit its peak, Stumpf found himself in front of a Senate hearing and the recipient of a scathing attack by Senator Elizabeth Warren. Whichever side of the political isle you are on, the last place you want to be, really, is on the receiving end of such an attack by Senator Warren. No good can come of that.
Macbride poses the question: “Could the Wells Fargo CEO have nipped this headline scandal in the bud if he had been more contrite?”
She turned to the venerable Jack Boggle, the founder of the Vanguard Funds, for some insight and perspective. I like Jack Boggle and listen to him when he speaks. He has been around the track just a few times, openly admits has made his share of mistakes, yet is one of the most revered legends in the mutual fund industry. Truth be told, I like a little gray hair when it comes to seeking perspective and wisdom.
Boggle relates a story about making a huge mistake when he merged Wellington Funds with another firm that dealt in riskier securities. The deal lost a great deal of money. Apparently, defending the deal as the whole thing cratered, he subsequently was fired. After that experience, he launched Vanguard “…and realized the only thing worse than making a mistake is refusing to admit it.”
Quoting McBride: “If you get it right, research suggests that the ability to admit that you are no better than the people around you, that you are humble, is the trait that sets great CEOs apart from merely good ones.”
So, what to do? The virtually universal advice is to own up to the mistake, take responsibility, sincerely apologize right from the get go and of course make appropriate amends.
Amends can come in many forms, but Boggle has another good suggestion: Identify the problem and commit to fix it. “Look around and see if you’ve done material damage to something that already existed…When something results in a catastrophe, it’s like those people who say, ‘I wouldn’t have done anything differently.’ … Well, yes, if the house burned down, yes, you should have.”
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