Remember to put your business mistakes into perspective
On Feb. 14, Broward County Deputy Scot Peterson made a mistake. Peterson resigned about a week later after an investigation found he failed to enter Marjory Stoneman Douglas High School as a gunman killed 17 students and staff members at the Florida high school. Peterson did not follow protocol. He made a mistake. Many people made mistakes. Our initial response is to want that person punished severely. But that's not my issue.
Being a small business owner involves myriad emotions: enthusiasm, positive attitudes, a sense of accomplishment, etc. One that is not examined enough is fear of making a mistake. There are situations where you are responsible and an error could damage customers and others. The fear is not always based on financial threats.
I use myself as an example because it is what I know best. About 25 years ago, a client sued my firm. The charge was the financial statements we had prepared had caused the client to be denied bank financing, which forced the client to file for bankruptcy. It was a very disturbing situation, and I had my first blood pressure warning from my doctor in this period. Nothing in the process had made any sense. The financials had a drop-dead deadline, and the client’s attorney delivered information critical to the footnotes less than 24 hours before the due date. The employee who did the work told me I had absolutely nothing to worry about.
In the end, a dream saved me. Shortly before we were to go to trial, I woke up at 3 a.m. in a frenzy. I went to the office and, after a two-hour search, found what I was looking for. By noon, my ordeal was over. What had I found? The equipment appraisal was completed after the loan application had been denied. I had been set up after the fact to take responsibility for the losses.
This was a very stressful situation but not for financial reasons. I had insurance. What drove my anxiety was fear of having a mistake exposed where my firm had caused financial harm to a client. It is easy to say it's only money. Usually, it isn't. It is about pride in what you do and fear that you may have done a very human thing. You made a mistake.
When you look at mistakes, consider this. When Winston Churchill was asked what decision he regretted most in his career, he had a one-word answer: Gallipoli. That was the ill-planned and executed invasion of Turkey during World War I. About 142,000 British and French troops were killed or wounded.
Jack Reith, one of the Whiz Kids at Ford, committed suicide in 1960 when Henry Ford II demoted him for the dismal failure of the Turnpike Cruiser and the more well-known Edsel. Another Whiz Kid prodigy, Robert McNamara, used auto industry statistical methods to direct our efforts in Vietnam as secretary of defense. He refused to listen to Joe Stilwell, a 40-year military veteran, that we should exit the war. He realized by the time of his death that thousands of American men died due to his blind belief that all problems can be resolved by the use of statistics.
Another consideration is the willingness to accept the position that makes you responsible for thousands of lives and/or millions of dollars. I never had the wealth or fame of Reith, but I also never had the shame and embarrassment that cost my company millions and, in the end, my life. I will never have the honor of being asked by the president of the United States to direct our military, like Robert McNamara. I also will never suffer the guilt of knowing that thousands of young men died due to my ego. There will never be a movie about my finest hour as leader of my country in the days of its greatest peril, like Winston Churchill. They also won't make movies illustrating thousands of young men dying in a futile effort to carry out my ill-conceived plan for an invasion.
You, as the owner of the business, are responsible for the design and implementation of the system. You, as the owner, also are responsible for following the system and hiring competent people to follow the rules of the system. People are upset in south Florida and rightfully so. On both the system and the human side of things, mistakes were made. Seventeen people lost their lives. Hopefully, that puts into perspective whatever mistakes you have or will make.
Paul Hense is the retired president of local accounting firm Hense & Associates and past chairman of the Small Business Association of Michigan.