We can all make mistakes and professional faux pas, big and small, in our day-to-day activities. And as much as we hear “you can learn from your mistakes” in everyday life, we don’t necessarily feel great when we do make them, much less see them as a learning opportunity at the time. This is even more so in the world of business, where one’s career and reputation can be at risk.
Believe it or not, all those mentors were right; making mistakes is a huge part of growing not only as a person, but also as a business leader. A bad investment or business deal gone awry can actually help to guide us through future opportunities and inspire personal growth.
Jack Welch, Former CEO of GE, cited his biggest business mistake as not moving quicker on decisions due to his fear of being disliked by his peers and employees.
“Of course you want to avoid breaking things or stretching the organization too far—but generally human nature holds you back,” he explains. “You want to be liked, to be thought of as reasonable…When you’re running an institution like this you’re always scared at first. You’re afraid you’ll break it. People don’t think about leaders this way, but it’s true. Everyone who’s running something goes home at night and wrestles with the same fear: Am I going to be the one who blows this place up? In retrospect, I was too cautious and too timid. I wanted too many constituencies on board. Timidity causes mistakes.”
Some of the biggest and most painful mistakes in the world of business are financial, with big blows to a company or individual from either missed opportunities, or ill-advised financial decisions.
Daniel Loeb, Chief executive of Third Point, says his worse decision came while in college and trading stocks in his spare time, just starting out in the industry. “I had made $120,000 and proceeded to invest all of it in an idea I was particularly passionate about: Puritan-Bennett, a medical-respirator manufacturer.
The company suffered massive losses after its products were associated with several deaths. In the years it took to remake my lost profits, I had a lot of time to absorb the important lesson of not over-concentrating positions.”
Warren Buffett, CEO of Berkshire Hathaway, looked to purchase Fannie Mae in 1998. “And for what reason or another, I just didn’t follow through. We’d have made about a billion and a half dollars on that. I think we made about 5 million. Those are the mistakes you don’t see. The mistakes you don’t see are way bigger.”