Why mistakes are critical for business growth
Mistakes in business are not only inevitable but also critical to the growth of an entrepreneur and their business.
Mistakes in business are not only inevitable but also critical to the growth of an entrepreneur and their business. As we navigate through these tough economic times, it’s easy for entrepreneurs and business owners to focus on minimising risk and avoiding mistakes. It can be tempting to play it safe and stick with what has worked in the past. However, as counterintuitive as it may seem, mistakes are the very ingredient that fuels the growth and evolution of your business. Taking risks is what leads to innovation, and ultimately improvements that will help you stand out from your competitors.
As the founder of The Entourage, one of Australia’s leading business coaching providers, I have seen time and time again that businesses that try too hard to avoid mistakes at all costs stagnate and eventually decline. They may feel justified in their need to reduce or completely avoid mistakes, but the end result is usually net-negative. The business might make fewer mistakes, but they limit its growth potential by an even greater degree. On the other hand, businesses that see mistakes as a natural part of the growth process often flourish. In fact, I have found that most of the biggest breakthroughs in business come from the mistakes that were made along the way.
If you’re a CEO or in an executive leadership position, then cultivating a company culture that recognises that mistakes can be the fuel for growth starts with you. It needs to come from the top. And yet, many entrepreneurs and executives believe that leadership is about protecting their team from making mistakes. It’s not. Having the strength to get back up and try again after making a mistake — in business and in life — is essential. My job as an entrepreneur and leader has always been to create an environment where my team takes ownership of their decisions and uses the lessons that come to ultimately grow into better operators and people. You never want to dampen your team’s innovative spirits; you want to encourage it, utilise it, and empower them to get better.
Cultivating the correct business culture
One way to do this is by building trust and psychological safety. Leaders can create an environment where employees feel safe to experiment and make mistakes by showing empathy, being approachable, and fostering an open and transparent communication culture. By giving employees responsibility and autonomy, they will be more invested in their work and feel more comfortable making mistakes. Leaders can encourage employees to take ownership of their projects and allow them to drive the decision-making process.
Encouraging calculated risks is another way leaders can create an environment where their team feels safe to experiment and make mistakes. Leaders can provide employees with the necessary resources and support to experiment with new ideas, while also ensuring that they do their due diligence and research before implementing them. When mistakes happen, leaders should avoid placing blame on individual team members. Instead, they should treat every mistake as a learning opportunity and use a collaborative approach to identify the root cause of the issue and find ways to prevent it from happening again in the future.
Setting stretch goals can also help create an environment where employees feel safe to experiment and make mistakes. These goals should be challenging, but achievable, and should encourage employees to push beyond their limits and try new things. When employees achieve stretch goals, it not only boosts their confidence but also demonstrates to the team and organisation as a whole that taking risks can lead to success. However, it’s important to note that if the goals are too far out of reach, employees may become discouraged, and it could have the opposite effect of what was intended. By setting stretch goals that are challenging yet achievable, leaders can encourage employees to experiment and take risks while also fostering a culture of growth and innovation.
Finally, for some teams it might even be helpful to hold “fail forward” sessions. These sessions give your employees the space to share their failures without fear of judgment, and instead receive understanding and support. When your team sees that failure is just a stepping stone to success, they’ll be more likely to take risks and experiment with new ideas. During these sessions, ask your team members to reflect on what they learned from their failures and how they plan to apply those lessons in the future.
Just like how every success can unlock a new insight into how great businesses are built, so can mistakes. To ensure the long-term growth of your business, focus on creating an environment where you and your team can embrace mistakes and see them as the key to fuelling your growth, not hindering it. Remember, it’s all about the mindset you bring to the table. Failure is just feedback — it’s how we choose to respond to it that makes all the difference.
Jack Delosa is the founder and chief executive of The Entourage, and author of UnProfessional and Unwritten. Under his leadership, The Entourage has been awarded the 4th Best Place to Work in Australia, and the Top 50 in Australasia, by Best Places To Work.
