Admitting mistakes and learning from them — that’s success - Sunday Times

Entrepreneurs should own up to when plans have backfired. For business leaders to take risks and drive growth, they have to accept that things can go wrong

I’m not often lost for words, but there was a moment last week when I wondered just how honest I should be. I was speaking at one of my Business Leader events, attended by small business owners and entrepreneurs in whom I’ve invested, and my audience wanted me to expand on last week’s column about the secrets of great strategy. After the presentation, I took questions from the floor and one, in particular, hit a nerve: “Richard, tell us about when you’ve failed. What can we learn from you making the wrong decisions? Tell us what not to do.”

Plenty of chief executives and chairmen would have deftly sidestepped the question, because, no matter how successful you are, few like to admit that they’ve erred. Yet sometimes the best way of learning what to do is by experiencing failure, and then recounting those experiences.

Showing humility in business means being as comfortable sharing mistakes as triumphs. Showing the real you, and having the confidence to do so, is how to build engagement with colleagues.

In business, you have to be bold and take risks — but you mustn’t, as a recent report on entrepreneurialism from the Onward think tank suggests, fear failure. Things won’t always go to plan but experimentation is what makes good leaders and great companies. I am fascinated by the current rivalry between airlines to offer the most interesting add-on luxuries — caviar on tap, onboard art galleries, Michelin-starred menus and improved seating.

They won’t all be effective but at least they’re trying to differentiate themselves — and hopefully, if the strategy doesn’t succeed, they will learn from it. The people I’ve most trusted in business are those with the courage to say things aren’t working and the tenacity to put it right.

The part of the question I disagreed with at the Business Leader event was the word “failed”. Making mistakes — often relatively small ones — shows that you are pushing the boundaries, testing and perfecting. And they are necessary on the path to achieving long-term growth.

When I’m in America, I’m struck by how, in their bullishness, they never focus too long on mistakes. They dust themselves off and get on with it. I remember getting odd looks from American colleagues when I admitted mistakes in external meetings. “No, Richard, don’t talk like that. Let’s talk only about our successes.”

If we are not making mistakes then we are not evolving — or have let ourselves settle into the kind of comfortable. risk-averse stasis that is the enemy of growth and value creation. So here are some of my errors — only some of them! — in the hope that you won’t make them too.

First, don’t launch an interior design business — or, more accurately, not while at the same time launching a property management firm, a painting and decorating company and a mortgage advice business. When I was younger, I couldn’t say no. If it sounded like a good idea, I went for it instead of assessing opportunities and choosing which to go for, rather than all at the same time. Try and do too much and you will find it hard to achieve sustainable success.

I saw this in a different way with one of our Business Leader members who wanted one-to-one advice, or, as I call it, “coachment” — a combination of helping them maximise their skills (coaching) and providing business guidance (mentoring). Julie Chen runs The Cheeky Panda, a great business that makes eco-friendly toilet tissue and wipes from bamboo. I gasped when she sent me her notes about what she wanted to get from our session — two pages full of questions from her and her team. It was way too much. Every meeting should focus on one or two big things to talk about; choosing your priorities effectively means you should come armed with an easily achievable soundbite that everyone can relate to.

Next, don’t scale and go for growth until you have proved your business model, offer or service, and ensured that it’s unique and delivers a great experience. Go big once you’ve evolved, learnt and proved it works — whether that’s an existing business or new product. My original pay-as-you-go emergency plumbing service was never going to work because customers have an emergency only every five years and the marketing cost of acquiring a one-off customer was too high.

And don’t be too hasty in expanding into new countries without having made a success of things back home. Equally, don’t wait until your UK sales have slowed right down, or ground to a halt, before you expand internationally. I’ve seen many undisciplined entrepreneurs make the mistake of being too ambitious, especially those running online businesses, in deciding to sell in multiple countries at the same time rather than devote proper resources to one at a time.

It is also important not to carry the whole burden yourself. When I was starting out, I had a business partner who wasn’t involved in the day-to-day management, so he was a great sounding board. Find someone you can share ideas with, from outside the company. I’ve always felt it’s not about the idea but the way you make it happen, so I share freely without insisting on non-disclosure agreements. The risk is that someone might steal your idea, but more likely is that they will help you add to it, turning the idea into something tangible and capable of being delivered.

And don’t talk too much. We have two eyes and ears and one mouth, and we should use them in that proportion. The best leaders at all levels of an organisation listen carefully, observe the room, read materials in advance and talk only when they have a couple of great insights to make — and do it after everyone else has had their say. You don’t always have to be directing things. After my business coach course at Insead last year, I hope I’m becoming a much better listener and the last in the room to comment.

When I ask a business audience how many have a to-do list, everyone puts their hand up. Almost all hands come down when I ask who has a not-to-do list. So much business advice is about what to do to achieve growth and success; much less is written about what you shouldn’t do. And yet we learn more from our mistakes than our successes. That’s where we should put more focus — sharing our stories of mistakes and failures.

So tell me yours. What have you learnt never to do again in business, and why? And let’s fast-forward growth by celebrating our mistakes.

Richard Harpin is founder and chairman of HomeServe and Growth Partner, and owner of Business Leader magazine