I’m writing this on the third day of the five-day CUES CEO Institute. It is the end of April and the Cornell campus is covered in snow. At any rate…
Yesterday we spent a good deal of time discussing how executives can do a better job of learning from their failures. This has always been an interesting topic to me and I periodically re-read an article from the Harvard Business Review titled, “Teaching Smart People to How Learn”. <http://www.amazon.com/Teaching-People-Harvard-Business-Classics/dp/1422126005>
The main point of the article and from what we learned at class yesterday is that executives tend to be confident people (big surprise). But sometimes that confidence is actually overconfidence. Overconfidence leads to learning difficulties because leaders struggle to accept the fact that they don’t know something or that they did something incorrectly. An overconfident person has a tendency to think that they already know and have no need for learning or that any failure was not their fault.
One thing that has helped me on the path of learning from my failures is to put my mistakes into categories. I’ve identified three failure categories. It’s a shame our language doesn’t have separate words to describe each one.
Below is my category of failures and what I try to do to learn from each of them.
1. The “I’m Trying Something New and It Didn’t Work” failure.
The first type of failure is when you predict a certain outcome when trying something and it doesn’t work. For example, I thought slashing our overdraft on debit fee by half, would cause more people to opt into the service and more people to use the service. I assumed there was a certain amount of elasticity based on price. So we moved the fee down $14 and guess what? I was wrong. We had the same amount of people opt into overdraft protection as our peers and nobody used it more. After a few months of losing considerable non-interest income, we put the fee back to its original amount.
What did I learn from that experience? To watch a pricing change closely and if it is not performing as expected, change it quickly. I must also remind myself that I will not always be able to predict consumer behavior, but as head of marketing, it’s my job to do so. One of the hardest things about marketing is how often your ideas don’t work. Fail fast and move on.
2. The “I Had No Idea” failure.
The second type of failure is when you are missing critical information – usually because of inexperience, poor training, or lack of guidance. When I first started at the credit union, I renamed one our products. I didn’t realize at the time that I needed to get it trademarked. I had never worked in a company that named services so I didn’t know anything about trademarks. A few years later another financial institution trademarked the name and I was left with egg on my face.
What did I learn? Sometimes I don’t know what I don’t know. The higher up the organization chart and the longer you’ve been at a job, the harder it gets to combat this. You need to do things like ask questions all the time. “Is there anything else I need to do on this project? Is there anything I’m not thinking of?” You need to hang out with people in your field and learn from their mistakes. You need to keep reading and listen to others. Learn fast and keep learning.
3. The “I Just Plain Screwed Up Because of My Bad Habits”
The last, and most important type of failure is when a weakness you have causes you to mess things up. I once lost one of my most valued employees because I failed to communicate with her. It was chiefly because I was overcommitted and stretched too thin. Calling her and explaining something was on my list and I didn’t get to it and didn’t get to it and before I had a chance to talk with her, she had accepted a job someplace else.
What did I learn? Every person has a list of about four things that they consistently do that keeps them from being their most successful self. I need to watch those things carefully and when I start to do them – STOP. In this instance it was waiting too long to do something important. I must remind myself that I can change these behaviors. I’m smart enough, discipline enough and determined enough. I just need to do it.
While it doesn’t do us any good to beat ourselves up over our failures, it does do us a great disservice not to learn from them. As Professor Russo stated so eloquently yesterday, “Experience is mandatory. Learning is not.”
Shari Storm is Senior Vice President and Chief Marketing Officer of Verity Credit Union and is the author of the book “Motherhood is the New MBA”, available here: http://www.amazon.com/Motherhood-New-MBA-Parenting-Skills/dp/0312544316/ref=sr_1_1?s=books&ie=UTF8&qid=1314126290&sr=1-1