Owning Your Mistakes: Four Ways to Turn Bad Business Decisions Around
Originally published in Inc. Magazine. Click here to view the original publication.
In business, things go wrong every day. As entrepreneurs, it’s easy to blame the economy, our customers, our employees and so on. But the fact is, it’s your fault, and you’ll become more successful once you own it. Case in point: Last month, we had the worst financial predicament we have seen in three years. We wiped out $50,000 worth of savings, and due to our cash management policies, we won’t take a first quarter distribution for the first time in several years. This happened because of the decisions we chose to make. We don’t regret our decisions, but we’re learning from them.
I meet with entrepreneurs every day who tell me, “If this prospect closes, we will be fine,” or “I did everything right, but the customer changed their mind out of the blue and now I’m screwed.” Entrepreneurs have a knack for seeing how events outside their control impact their world. However, I challenge that there’s nothing outside your control when it comes to your business. Every action has an inverse reaction, so if something goes wrong, you caused it — either by action or inaction.
Here are four steps for “owning it.”
Say this out loud: “Where we are is a result of my decisions.” The first step to owning something is publicly taking responsibility for it. Don’t try to give others excuses for why something happened. Just stay focused on what you have to do to move forward. Looking for justifications isn’t going to change the fact that your business is your responsibility and no one else’s.
Focus on the actions necessary to fix your issue. Too many times when something goes wrong, we look for reasons why. We want to understand how to avoid the error in the future. The time for doing that, however, is not right after the mistake. After you realize a drop or a miss in your business, focus on the actions necessary to remedy the situation. Once you have fixed the situation, start looking at what foundational elements or decision-making criteria you need to change to avoid issues like this in the future.
Look at the root cause. The actions you took that caused your issue were based on certain assumptions you made. Analyze those assumptions and determine what information would have changed your decision. Then, focus on finding ways to get that information before you make future similar decisions.
Move on. In business, the entrepreneurs who are the most successful are the ones who learn to move through their mistakes or obstacles. Running a business is tough and things constantly change. Therefore, you have to stay focused on moving yourself and your business forward. Talk to others about their experiences and stay determined in your mission. The only limits you have to realizing your business’s true potential are the limits you place on yourself.
Our cash crunch isn’t going to kill us. We’ve seen things like this happen before, so when cash flow is good, we focus on building our savings. We took a calculated gamble, and although it stung a little, it didn’t wipe us out completely. We are a better company because of the investment we made in ourselves — even if the timing wasn’t ideal.
When you take ownership of everything that happens in your business, you start to see the effects of your decisions and learn how to make smarter decisions in the future. Business is all about learning: If we blame others and don’t own our decisions, we miss the learning opportunity.
Great entrepreneurs anticipate market changes and business challenges and then navigate around them. As my father-in-law always says to me, “Luck is when preparation meets opportunity.” Are you preparing for opportunity, or praying for luck?