Greenhouse Canada

Business Management
Improve your business by admitting mistakes

October 16, 2012
By Dottie DeHart


Oct. 16, 2012 — It seems our society has turned dodging responsibility
into an art form. From celebrities who insist that a brush with the law
was all a big misunderstanding to political figures who use spin and
double-speak to blame everything on the other side, no one wants to
admit it when they mess up.

If you’re a business leader, the temptation
to use this strategy is huge. After all, your customers are paying you
to get it right, so the last thing you want is for them to know that
you’ve made a mistake, right?

Maybe not. According to Michael Houlihan, when your company admits
to mistakes in a constructive way, you won’t damage your brand in the
way you feared. In fact, you have a valuable opportunity to gain respect
and loyalty.


 “You and your company are not judged by how well
you do when you’re good, but by how well you do when you’re bad,” says
Houlihan. He is co-author, along with Bonnie Harvey, of the coming book
The Barefoot Spirit: How Hardship, Hustle, and Heart Built a Bestselling
. “The fact is, everyone – and every company – makes mistakes.
Denying that they have happened usually exacerbates and magnifies an
already awkward situation because chances are you aren’t fooling anyone
and you appear insincere.”

“In fact, in a very real way, trying
to dodge responsibility can hurt your reputation more than simply owning
up to the mistake in the first place,” he adds.

Houlihan speaks
from experience. He and Harvey are the founders of Barefoot Cellars, the
company that transformed the image of American wine from staid and
unimaginative to fun, lighthearted, and hip. When they started the
company in the laundry room of a rented Sonoma County farmhouse, they
knew almost nothing about winemaking or the wine business.

you might imagine, we made many mistakes over the years as the business
grew,” admits Houlihan. “Some of them even caused us to worry that
Barefoot might not survive. So early on, Bonnie and I made a conscious
decision to confront our mistakes, and to view them as opportunities to
learn and grow. I believe that attitude is part of what ultimately made
Barefoot Cellars successful.”

Honestly and humbly admitting to
missteps, Houlihan and Harvey found, often diffuses a tense situation
instead of exacerbating it. And as time passes, they say, people tend to
remember more clearly how you handled the mistake as opposed to what it

Houlihan has five suggestions for handling your next business “my bad:”

Cop to it.
Yes, it’s uncomfortable to admit that your company did something wrong.
Uttering that mea culpa involves swallowing your pride and
acknowledging that you are not, in fact, perfect (an illusion our
culture encourages us to zealously cultivate). The sooner you admit to
the error, the more you reduce the drama – and the faster you can move
on to the next, more important stage: what you are going to do about the

“People actually like a little imperfection now and
then,” points out Houlihan. “It demonstrates a level of authenticity,
vulnerability, and humanity with which we all can identify. Plus, it’s
harder to be angry with someone who says, ‘You’re right—I messed up,’
than with someone who insists the fault doesn’t lie with him . . . even
though you know it does.

Recognize how it happened. If
you admit fault but then put the incident behind you, guess what? You’ve
just increased the chances that it will happen again. It’s very
important to investigate how and why an error occurred, so that you can
fix the faulty procedure or process. That’s why Barefoot made sure
employees weren’t afraid to make or report mistakes.

our approach to mistakes was to say, ‘Congratulations! You found a new
way to screw up, and that’s a good thing. We didn’t know that this could
happen, but now that it has, we can keep it from happening again’,”
says Houlihan. “Then we would brainstorm what went wrong and make
technical adjustments. Honestly, I think that large siloed organizations
where you can be demoted, passed over, or even fired for a mistake are
missing the boat. That’s because real progress in progressive companies
is often built on the backs of mistakes and the improvements they

Aim, don’t blame. What happens when a mistake
involving your company really can be traced to someone else? While it’s
easy (and temporarily satisfying) to point your finger and say, “Not my
fault!” the truth is, if it happened on your watch and you are
accountable for the finished product, you ultimately share the blame in
the customer’s eyes. In this situation, get to the bottom of what
happened and aim your focus on what you and your company can do on your
end to prevent the situation from reoccurring.

Write it down.
If you successfully resolve a negative situation that was sparked by an
error, then rub your hands together and continue with business as usual
as if to say, ‘Yes, it happened, but it’s all cleaned up now,’ then
you’re making a second misstep. According to Houlihan, if you don’t
write down what happened and how to avoid it, even you are in danger of
making the same mistake again, and the same is doubly true of others.

you are still smarting in the immediate aftermath of a fiasco, it’s
easy to assume that you will always remember what you did wrong and that
it will never, ever happen a second time,” Houlihan points out. “But
often, as life goes on and your focus inevitably shifts to other things,
your memory can get fuzzy. Or you might fall back onto old habits
unconsciously. And you certainly can’t pass your own experiences to
everyone else in your company through osmosis. That’s why it’s crucial
to take the lessons you learn and physically make them part of your
company’s policies. This might mean writing a new procedure, checklist,
or sign-off sheet, or drafting a new clause in a contract. But whatever
you do, write it down!”

Resolve that it won’t reoccur.
Along with your apology, assure the injured parties that it—whatever
‘it’ was—won’t happen again. Voluntarily describe how the mistake
happened and what changes you are implementing to prevent its
reoccurrence. And most importantly, tell the other guy, gal, or group
how you and your company are going to make things right. Most people
will appreciate your thoughtfulness, resolve, and the action you are
taking. And often, handling an error in this way will reinforce the fact
that you are, ultimately, a trustworthy company that can be relied

“Once again, mistakes are bound to happen—even if you’re an
established company, and especially if you’re a newer one,” reiterates
Houlihan. “So don’t waste time and energy beating yourself up, and
especially don’t try to create the illusion that you’re perfect.”

what people recall most of all is how you handle missteps and errors,
not what they were,” he concludes. “Don’t miss out on these golden
opportunities to show your integrity, reduce the drama, and improve the
way your business operates. That is how you make mistakes right.”

Michael Houlihan and Bonnie Harvey, authors of The Barefoot Spirit: How Hardship, Hustle, and Heart Built a Bestselling Wine,
started the Barefoot Wine brand in their laundry room in 1986, made it a
nationwide bestseller, and  sold the brand to E&J Gallo in 2005.
Starting with virtually no money and no wine industry experience, they
employed innovative ideas to overcome obstacles and create new markets.
They now share their experience and innovative approach to business as
consultants, authors, speakers, mentors, and workshop leaders. To learn
more, visit