Everyone makes mistakes. The main difference is that successful people learn from them and unsuccessful people don’t. By creating an environment in which it is okay to safely make mistakes so that people can learn from them, you’ll see rapid progress and fewer significant mistakes. This is especially true in organizations where creativity and independent thinking are important, as success will inevitably require the acceptance of failure as a part of the process. As Thomas Edison once said, “I have not failed. I’ve just found ten thousand ways that do not work.”
Mistakes will cause you pain, but you shouldn’t try to shield yourself or others from it. Pain is a message that something is wrong and it’s an effective teacher that one shouldn’t do that wrong thing again. To deal with your own and others’ weaknesses well you must acknowledge them frankly and openly and work to find ways of preventing them from hurting you in the future. It’s at this point that many people say, “No thanks, this isn’t for me, I’d rather not have to deal with these things.” But this is against your and your organization’s best interests, and will keep you from achieving your goals. It seems to me that if you look back on yourself a year ago and aren’t shocked by how stupid you were, you haven’t learned much. Still, few people go out of their way to embrace their mistakes. It doesn’t have to be that way.
Remember back in Life Principles, when I told the story about the time that Ross, then our head of trading, forgot to put in a trade for a client? The money just sat there in cash and by the time the mistake was discovered it had cost the client (actually Bridgewater, because we had to make good on it) a lot of money. It was terrible and I could easily have fired Ross to make the point that nothing less than perfection will be accepted. But that would have been counterproductive. I would have lost a good man and it would have only encouraged other employees to hide their mistakes, creating a culture that would not only be dishonest but crippled in its ability to learn and grow. If Ross hadn’t experienced that pain, he and Bridgewater would have been the worse for it.
The point I made by not firing Ross was much more powerful than firing him would have been, I was demonstrating to him and others that it was okay to make mistakes and unacceptable not to learn from them. After the dust settled, Ross and I worked together to build an error log (we now call it the Issue Log), in which traders recorded all their mistakes and bad outcomes so we could track them and address them systematically. It has become one of the most powerful tools we have at Bridgewater. Our environment is one in which people understand that remarks such as “You handled that badly” are meant to be helpful rather than punitive.
Of course, in managing others who make mistakes, it is important to know the difference between capable people who made mistakes and are self-reflective and open to learning from them, and incapable people, or capable people who aren’t able to embrace their mistakes and learn from them. Over time I’ve found that hiring self-reflective people like Ross is one of the most important things I can do.
Finding this kind of person isn’t easy. I’ve often thought that parents and schools overemphasize the value of having the right answers all the time. It seems to me that the best students in school tend to be the worst at learning from their mistakes, because they have been conditioned to associate mistakes with failure instead of opportunity. This is a major impediment to their progress. Intelligent people who embrace their mistakes and weaknesses substantially outperform their peers who have the same abilities but bigger ego barriers.
Recognize that mistakes are a natural part of the evolutionary process.
If you don’t mind being wrong on the way to being right you’ll learn a lot, and increase your effectiveness. But if you can’t tolerate being wrong, you won’t grow, you’ll make yourself and everyone around you miserable, and your work environment will be marked by petty backbiting and malevolent barbs rather than by a healthy, honest search for truth.
You must not let your need to be right be more important than your need to find out what’s true. Jeff Bezos described it well when he said, “You have to have a willingness to repeatedly fail. If you don’t have a willingness to fail, you’re going to have to be very careful not to invent.”