Tolerate mistakes–but only once

Fixing mistakesLike any CEO, Amy Rees Anderson wishes that employees wouldn’t make costly errors. Yet she’s willing to look past well-intentioned mistakes as long as they turn into learning opportunities.

Before becoming managing partner of REES Capital, a Utah-based investment firm, she was founder and CEO of MediConnect Global, a medical record retrieval and digitization firm with more than 1,000 employees. She sold MediConnect for about $377 million in 2012.

During her nine years running MediConnect, she sought to give employees the autonomy to take risks and make mistakes. But she only did so in areas of the company where she felt an error wouldn’t cause lasting harm.

She also established a rule that an isolated mistake was fine if it was an honest effort to do the right thing. Individuals knew, however, that she would not accept the same mistake again.

“If you made any mistake for the first time the entire team would have your back in fixing that mistake if anything went wrong,” she says. “If you ever repeated the mistake a second time, then you were 100 percent on your own to face the consequences.”

To create a supportive learning environment, Anderson laid out four steps for employees to handle their mistakes. First, they needed to extract lessons from what went wrong without defensiveness. Second, they needed to accept accountability—to own the mistake without making excuses.

Third, they had to take corrective action. Repairing or containing the damage prevented errors from snowballing.

Finally, they implemented processes to stop similar mistakes from happening in the future. Introducing safeguards and other procedures to avoid a recurrence maximized the chance for everyone to learn and refine their skills.

— Adapted from “Good Employees Make Mistakes. Great Leaders Allow Them To,” Amy Rees Anderson, www.forbes.com.