7 Managing your mistakes
We have talked about some of the tough stuff that happens in values-driven businesses: trends that turn against us, problem customers, the loss of employees, and a lack of cash, to name a few. But sometimes we just plain screw up or base our decisions on poor judgment. Especially frustrating are the times that we are convinced we are doing the right thing for all the right, socially responsible reasons and we still mess up.
In this chapter, Lisa describes getting a wake-up call when two of her employees got into a fistfight. Margot tells us two stories: one about the early days, when she printed too many catalogs, and a second one about an employee issue that ended in a lawsuit. Gary writes about a manufacturing mess-up, and Joe explains how he made a core mistake in finding a sustainable way to keep his company running.
In this chapter, we tell the truth about those times we made mistakes and had no one to blame but ourselves. What works best during these times is to acknowledge that a mistake was made and work on how we might be able to make better judgment calls in the future.
Missing the Obvious: Addressing the Emotional Side of Change
LISA
One of my biggest screwups was an automation project we did at Vermont Bread Company. I actually use the story as part of a presentation I do for Rotary clubs and chambers of commerce, titled “All the Things We Messed Up in Our Automation Project.” One of the main issues I had to face during this time was my own arrogance—especially the Socially Responsible Mindset Arrogance. (I hate that!)
For years we had been dealing with the symptom of high turnover in our production department at the bakery. We tried all kinds of fixes: changing schedules, working only four days a week, and implementing a new benefit system, but the real problem was the work itself. It was hot, physical, brutal work. You really had to be either an eighteen- to twenty-four-year-old male or a rare woman with incredible upper-body strength to work with us. When a young woman friend of mine, who was an athlete and a runner, needed work for a few weeks, she asked me for a job. A day and a half into it, she was in tears. She told us it was impossible to do the work. At that point, I knew we really needed to deal with the root of the problem: we needed to automate our plant. Then we could actually adhere to our values and have a diverse workforce. People would be able to work at the bakery until retirement. So we started on the path to automation.
In the middle of the automation project, a bunch of people were working late to install equipment. I was in my office and heard loud voices down the hall. I figured the techs were listening to Rush Limbaugh and had turned up the radio, but the noise kept getting louder and louder. When I went into the hallway to ask them to turn down the radio, the door of the production office burst open and two of my key employees came tumbling out, screaming at each other. A fistfight had started.
A smaller, obvious lesson I learned that day was that men in fistfights do not hear women’s voices. I ran into the bakery to get my male business partner to break up the fight. Once the combatants were separated, one of the employees could not calm down. His face was red, and he started screaming at my business partner and me. He called us liars and said he was sick of us playing games with him. Nothing we said calmed him down. Until that moment, I would have defined this man as one of our steadiest, calmest, most reliable workers. We eventually told him to go home, said we would pay him for his shift, and asked him to come back when he was a lot calmer.
I was floored, I thought we had this project licked; I thought I had done everything right. The whole process had been very values oriented and socially responsible. We had meetings about retaining employees, we had staff discussions about automation, and we all looked at equipment brochures together. I showed videos, put pictures and layouts on the break-room table, took people on field trips to other automated plants, and brought thirteen people to a bakery show in Las Vegas. We had been so proud of ourselves. What we hadn’t taken into account was how we had completely changed the world of Vermont Bread Company.
In the next few days I spent a lot of time talking with my friends and other business owners about what was happening. I began to understand that even though the work promised to be easier and we would have a chance to be fully staffed more often, I had fundamentally changed the employees’ lives. We hadn’t just changed the machines, we had changed all of our mental processes as well. Before the automation project, we had three teams that each solved their own problems and then passed the product onto the next team. Now those three teams would be consolidated into one big team. People wouldn’t be able to solve a single problem without understanding the entire system. This scared some of the employees. They knew how to do their jobs, and they were good at them. They got a lot of positive feedback on their skills. They had young families, new mortgages, and car payments. They made livable wages at the bakery and had good benefits. Even though we told them their jobs would be easier with automation and they would be able to learn how to use the new equipment, it didn’t matter. It was a change. It was computerized. And it was scary. Most of all, despite the appearance of cooperation and shared information, the change was my choice and it was under my control, not theirs.
As happens with a lot of mistakes, I started out with really good intentions. We thought we were treating the root cause of a problem rather than the symptoms by following the path of making the work more appropriate for a diverse workforce, but we came to realize the root system was much more tangled than we initially thought. In order to untangle that root system, we had to ask for help. Before the automation project, representatives from a local employee assistance program had called a number of times to ask if I would like to make use of their services. I had never signed up. I thought we didn’t need them. But after the fight happened, I found the number and called. Basically I said, “Okay, now I understand why you are in the world. Please come and help me.”
The good thing about screwing up is that I learned from it. I could use the information to do better next time. A few years later, when we were in the middle of implementing an integrated computer system, I was able to look back on the automation project. I remembered the lesson I learned before about how huge the impact of such a change could be, and I was able to give the staff the support they needed through the company-wide changes.
So much of the learning and relearning we do when we screw up is figuring out how to recognize and deal with fundamental change. When you are in the midst of it, you might feel like you are on a roller coaster. Well, the truth is, you are. And rather than get nervous about how you might screw up, you can laugh and say, “Oh yeah, here we are on that roller coaster again!”
Mail Order and the Time-Saving Technique of Settling Out of Court
MARGOT
The first time I screwed up was pretty soon after I started the business. Mr. Birkenstock realized we were struggling to get stores to carry the sandals and explained how he got Birkenstock off the ground in Germany. He had read a book titled How I Made a Fortune in Mail Order, and its advice had worked for him. So in 1968 I translated his German catalog into English, bought one hundred thousand copies, and had them shipped to the United States. We rented mailing lists for health enthusiasts, but since we had more catalogs than we could afford to mail out, I sent two thousand at a time. It was a disaster. We did sell some shoes, but I got more back with a request for a refund than I ever mailed out. The letters went something like this: “You can’t expect me to wear those. My husband says they look like gunboats!” We had those catalogs for years to come; some even traveled with me to our new warehouse in San Rafael. The prices had changed by that time, but the pictures were still valid. We kept using them for years. We just pasted over the old price list with the latest prices.
The screwup was trying to follow someone else’s business plan. The difference between our mail-order campaign and Mr. Birkenstock’s was that by sheer luck he had hit on the right list for him. He had mailed the catalogs to all the physicians in Germany. They understood the orthopedic value of the shoes. They bought them for their own use, paid full retail, and recommended them to their patients. It couldn’t have been better for Mr. Birkenstock, but it sure didn’t work for us. What worked for us was far more time-consuming—the slow, patient effort of explaining the sandals to one person at a time. I went to conventions, health fairs, anywhere I might find people who would be interested. Pretty soon our early retailers did the same, spreading the word to their communities and putting us on the road to success.
My next painful screwup came a few years later, when we had sales of about $1.2 million. Our organization was pretty loose at the time. With our expanding sales, I knew we had to tighten up, but I didn’t know how. I found a consultant who had developed a system for organizing a company. It was a lengthy process. He studied our business, interviewed our employees, and then asked three of them and me to come to his office so he could unveil his plan. Without telling me beforehand, he named one of our employees the head of marketing. I really couldn’t see her in that position, but I didn’t have the guts to stop it right then and there. I also thought that perhaps he could see something in her that I couldn’t, so I let it slide.
It soon became clear that the woman was in way over her head and couldn’t do the job. I stopped using this consultant, and I fired the woman. However, she filed a lawsuit. I had to get an attorney. The way this kind of litigation works is crazy: her attorney conducted a deposition and my attorney conducted a deposition, and both went on for hours. I felt this was very unproductive and took far too much time and energy. Believing there was a better way to handle disputes, I found out about mediation. At the time, only one attorney in our county practiced mediation. My employee was willing to meet with this attorney, so we had a very frank talk and settled the matter. In other words, I paid her off. My original attorney was furious. He was sure I would have won the case, and he was afraid I would get a reputation for settling with people and would be sued again. I was willing to take that risk, and I never was sued again because I learned how to act better in the future. I felt guilty—after all, the consultant had put the woman in that position; she had never applied for it. And I had allowed it to happen. It was more truthful to apologize and pay. It also saved a lot of time that could be put to better use!
I found out that the most important action to take when I do screw up is to admit it, not to defend my actions in order to save face. First, I try to forgive myself. Then I listen to my insides—“What feels right?”—and I act on that. In the aftermath of a major mistake, a person can get quite scared, afraid of screwing up again. But being paralyzed does not help the business. Especially in these uncertain times, we need all the courage we can muster to come up with new and untried solutions. It’s one of life’s paradoxes. Only experience can teach us how far to go in either direction. If it happens that something doesn’t work out, we can forgive ourselves, keep our sense of self-worth intact, realize that we learned a lot, and go on with confidence.
If You Build It, They Will Come
GARY, STONYFIELD FARM
We’ve screwed up plenty in all facets of the company. I’ve had to cut my losses with hiring. I’ve had marketing efforts that just weren’t right. We’ve conceived of all kinds of crazy things—from garden salad yogurt to something that was perhaps the right product at the wrong time. Sometimes it is impossible to make the right choice and you have to live with that. This can happen when you make a decision too fast. Sometimes I have approved something in a hurry and then woken up in the middle of the night, realizing it wasn’t right and that it could cost us a lot of money. At the same time, you can’t delay decisions in business or you could lose out.
My biggest problems in business have been the ones I created. No one else was responsible for them. I couldn’t blame the market, the money situation, other people, or anything else. I have had my share of challenges in terms of not having enough money or not having it when I needed it or maybe trusting the wrong person, but whatever the problem was, I learned to stop pointing fingers. Eventually I had to look in the mirror and see my own role in it.
When I started out, though, screwing up involved thinking it was anyone else’s responsibility but mine. I used to feel resentment toward people who wouldn’t invest money in my company or donate money to it. I felt critical of people who would say they were socially responsible but then wouldn’t step up to the plate. I would say, “Look, here we are doing all this stuff that is exactly what you said you were looking for, yet you are not investing in it.” But now I realize that it’s too easy to say, “Oh, those damn investors.” In fact, the entrepreneur is responsible for selling his own idea and selling it well. The entrepreneur needs to be able to make a really clear case for why investors should want to put their money into it. If you have a good thing and you are able to make a good case for it, then if you build it properly, they will come.
Once my company was off the ground, big mistakes happened when I made decisions I wasn’t qualified to make. I didn’t recognize my own limitations. When I think back to some of my learning, this was one of the biggest lessons for me. For instance, I went off to manufacture in Russia. From an entrepreneurial point of view, a relatively logical set of decisions led me to think we should manufacture there, but my CFO was aghast. We were just coming into our own. We were running a $40 million company and we had so much going on. She saw the Russian venture as a huge, huge waste of my time, and she felt like it was a distraction in terms of our investment money. It took me a year and half to realize my CFO was right. We lost $750,000 in the process, and I almost lost my life. I got into these mafia situations with Uzis, and the whole thing was pretty hairy. That mistake, even though it was a doozy, really expanded my personal listening. I also realized that I was unqualified to make that decision in the first place.
From this experience, I understood that my pathological optimistic self could sow the seeds of our undoing. I’ve gone forward with other new ventures, and I still am pathologically optimistic, but now I check my ideas out with other people before I act on them. I learned through that. I learned what I’m not. I learned it’s okay to accept my limitations and ask for help. I’ve learned to be less stubborn and willing to let go of things that aren’t working, whether that’s a product or something else. I keep little reminders around about errors we made so that I can learn from them. The idea is to try to shorten the learning curve.
One of the challenges of growth is that with a $300 million company, the costs of wrong or delayed decisions are much bigger, and the number of lives that are affected is greater. A company goes through growth stages, from the child to the adolescent to the grown-up. In some respects, adolescence is a good time to work this stuff out because you can make mistakes that are a lot less expensive, even though at the time you might think that nothing could be bigger. But if you are successful with these small decisions, you will get bigger, so you might as well learn when you are small.
Losing an Employee and the Flawed Business Model
JOE, CREATIVE MACHINES
Last year was probably the worst year ever, and I think it was because of two major screwups. The first one was that we had a fundamentally flawed business model: we did only custom work. We had somehow been lucky enough to survive for more than ten years with only custom work, but during this year I realized that all it would take was a few mistakes, and we would fail irreparably. We had gotten ourselves into a situation where we had nothing to fall back on. I found myself taking exhibit jobs I really didn’t like just to make enough gross sales to keep everyone employed.
In order to fix this screwup I needed a steady moneymaker for my business. I didn’t want the moneymaker to take a lot of time, and I didn’t want it to be useless. I didn’t want to make poodle collars or avocado slicers, for example. That’s where the socially responsible piece comes in for me. I wanted to make something useful that engaged the mind. At about the time I was realizing this, I lost one of my best employees, which was a wake-up call. The truth was, I wasn’t paying him as much as I should have been. This employee had been with us from the beginning. When he said he had to leave, I said, “I feel bad because you’ve really helped build this company. In a bigger company, you’d have equity. You’d have some ownership. In my mind, you do have ownership. I have always intended to reward all your early work with a much higher salary as soon as possible.” He said, “Well, you’ve done a lot for me, but I don’t know how you can keep that promise.” He didn’t speak harshly, but he was a little negative. I don’t think he believed that the situation could really change.
Even though I couldn’t have paid more at the time, I could have been paying attention to his morale as an employee of Creative Machines. He handled a lot of tough jobs, which I didn’t appreciate until later. He would go on trips for installations and build exhibits. If any warranty issues came up, he would feel responsible for them. But he was rarely able to see the successes. When you’re building, you’re dealing with the client, and that can be a hassle—especially while you’re in the process of the installation. Afterward, you hear only about the problems the exhibit has. You tend to overlook the fact that in between the problems, hundreds of thousands of people are enjoying the exhibit you built. My employee didn’t see that enough, and I don’t think I gave him enough chances to experience it. I’ve worked in museums, so I know how much enjoyment people get out of the exhibits, but if you haven’t worked in museums, you might not get that kind of gratification.
This employee happened to leave at the same time I was realizing the way we were operating wasn’t working, we were running out of money, and it felt like things were crashing in around me. Then I got a call from Rock Stream Studios, which made ball-machine sculptures. The owner of the business wanted to retire. For years he’d been selling ball-machine sculptures all over the world, and he wanted to sell the company. The demand for the ball-machine structure continues, and they offer a huge profit margin. They’re sold as individual custom art pieces, and no two are identical, but they’re easy to fabricate because they’re very similar to one another. They share most mechanisms, and the ball can go through a menu of a hundred actions: it hits the cow bell and the cow kicks it; it lands in a little walk and then goes to a Ferris wheel, hits three frogs, and goes into the cow’s mouth; and so on. All the details, such as what parts to use, what bearings, and what spacing, have been worked out. I can hand a project off to employees and it gets done without demanding a lot of brain power. I like working on that kind of stuff. It’s fun to work on a project you know will be appreciated and you’re fairly sure will succeed.
Now that we have the ball-machine sculptures as a constant moneymaker, we don’t have a flawed business model anymore. We’re not out of the woods yet—I am still searching for something else that can supply regular income—but we are doing much better. If we’d had a steady moneymaker earlier, I might have had more cash on hand, and that key employee might never have left. He got a well-paying job in his hometown. He visited the shop a while ago, and he seemed good. Ironically, now that Creative Machines is doing better, I could have paid him a lot more. But if those screwups hadn’t happened, I might not have learned about how a consistent moneymaker can help in all facets of business—from paying a key employee well to making more creative work.
I have to remember that screwups are part of what it means to run a company, and though we’ve come close to failing, and it may happen again, we can learn from our mistakes. All creativity, in one sense or another, is about managing failure. The creative process has more dead ends than open doors. So the questions become, How do I learn from my mistakes so I don’t make them again? How do I stop them before they damage me too much? You can learn a lot from a screwup, but it can feel scary to make mistakes. When you hear or read stories of people who have done really well, you find out the difference between them and someone who failed was that they were able to withstand their mistakes. The bad times didn’t get to them. They were able to continue. They might have felt like failures but they kept getting up and doing it again. In a way, a small business like mine is about managing failure. It’s about carrying on when you do screw up.
What We Learned
We could tell plenty of other stories about the mistakes we’ve made over the years. The point is that sometimes we just blow it. No big trends affect us, no Goliaths overwhelm us, no employees make bad decisions—we just screw up, pure and simple. So what do we do when we make a mistake?
Face it. The mess-up starts to get fixed as soon as we can turn our attention toward it and try to see it clearly. For many of us, that first “taking our head out of the sand” is the most difficult step. But once we face the mistake, we can start to fix it.
Own it. Mistakes can be particularly irritating when we think we have done everything the right way. We have considered not only the success of the company but also the people who work for us and the environment in which we live. We have been inclusive in our process and transparent in our actions. Yet we still screw up. We just have to own it and move on.
Get the help you need to move through it. Whether you can contact your advisory board, an employee assistance program, or a consultant, make sure you talk out the problem so that you won’t be as liable to make the mistake again. Fix what can be fixed, hope you have learned from the situation, and get up tomorrow morning and start again.
Remember to Write Down All of the Positive Things That Have Happened This Week
Have a notebook that lists just the good stuff, such as accomplishments and finished projects. Use it as a resource for building confidence and remembering that you don’t always screw up!
PRACTICAL TIP
Get a Massage or Manicure or Haircut or Shave
Even if you bite your nails, start today to get them in shape. Or take an hour and finally get that massage you’ve promised yourself. The times when you are hardest on yourself are also the times when you need to be the nicest to yourself!