When things go off track, stop, accept the consequences, regroup, rethink, get back on track. It makes so much sense when you read it here. Why then is it so hard to remember in the heat of the moment? Because hope is a powerful thing. And none of us likes to admit an error, a mistake or a miss until we have to.
And therein begins the slippery slope to disaster. A slight revenue overestimation gets carried forward to the next period and the next and the next until eventually the gap between delivery and promise becomes too big to ignore. A new hire taking a little longer than expected to get up to speed is given one more chance. And then another. And another. Until the damage is unfixable. One meeting’s overrun pushes back the next and then the next until the day’s schedule is blown.
Witness Amazon’s 2015 earnings. They ended the year with Earnings Per Share of $1.00, up +$0.51 versus the prior year. Yet the stock dropped -13% on the news. Why? Analysts had been expecting earning per share of $1.56. Had they simply changed analysts’ expectations at some point along the way, they could have prevented the value destruction. Instead, they kept doing their best to get as close to the estimate as possible.
That’s the compound error Apple needs to avoid. They need to come clean with all the bad news today and establish expectations for the future they can meet and beat.
To be clear, there are good mistakes and bad mistakes. Encourage intentional mistakes and recognize and forgive unintentional mistakes with minor impact – once. Don’t overlook them or let them compound into major impact.
Stop
This is the hardest step. It requires you to go against your normal optimistic inspirational way of leading and assess what is likely to happen instead of the best case scenario.
Setting boundary or trigger lines in advance can help. Agree on the minimum revenue a product must deliver in a test market. Then, no matter what the explanation or excuse, kill the product if it doesn’t deliver. Agree milestones for a new hire’s onboarding. Then, make him or her go away if he or she doesn’t hit them.
Use range forecasts with different actions at different ranges. For example, if results are:
• +20% or more ahead of target, increase investment to accelerate progress even more.
• +5-20% ahead of target, provide positive recognition.
• +/- 5% of target, keep going as is.
• -5-20% below target, provide assistance to turn things around.
• -20% or more behind target, terminate the project or people at the first reasonable opportunity.
Forget these actual numbers and actions. But do have specific trigger criteria and actions in place to keep you from pursuing lost causes.
Accept The Consequences
There is a cost to failure. Stopping a failing effort means you have to recognize and accept that penalty whether it’s a loss of respect, status, position, promotion, money, or anything else. But whatever the cost at that time, it’s almost guaranteed to be less than the cost of compounding the error.
Regroup
Stopping will surprise some. They can’t get over their pain and move forward until they’ve dealt with their loss. Give them a chance to grieve. Then help them regroup to tackle the next task. Failing doesn’t mean you’re a failure.
Rethink
Failure, mistakes and misses can provide important opportunities for learning. Take advantage of that learning to rethink your approach and avoid making the same mistake again. History is littered with people that failed and failed and failed until they finally succeeded – because they learned from their failures.
Get Back On Track
Having stopped a bad situation, accepted the consequences, regrouped and rethought, don’t look back any more. Bury that mistake deep in the files of ancient history. Turn your energies to the next stage or the next task, inspiring and enabling your team to do their absolute best together to achieve the next objective.
