I don’t personally know a lot of people who own up to mistakes. These mistakes often have hugely bad outcomes, like losing a lot of money on a trading desk or resulting in the possible bankruptcy of a startup.
I know way, way fewer people who own up to mistakes that happen to end up well.
Quick story. My first boss was one of the greatest bosses whom I’ve ever met. When I was a young trader, sitting at my desk watching over our algorithmic / HFT trading systems, a mistake was made.
It was a coding error that resulted in a trade that shouldn’t have happened. But the trade was made and we ended up making quite a bit of money on it. It was sheer luck driven by a mistake.
I looked at my boss and while relief was on my face, at the 4pm stock exchange close, his face was ashen. He immediately went to the partner he reported to and said essentially, we screwed this up, it happened to make money, but we won’t do this again. He voluntarily decided to not take credit for something he could have gotten credit for.
Lesser people would have just been quiet and celebrated the accidental victory of a fundamental mistake, waiting for the slightly increased bonus that came end of year. But not my boss. So I was fortunate to have learned this important lesson from him.
This type of thing happens, both good and bad, in all organizations. I’ll highlight an intelligence service example.
It’s now documented that in the 1980s, when the most infamous spies in US intelligence, Aldrich Ames and Rick Hansen gave up the names of our KGB informants (who were then executed)…what happened next? The KGB head at the time bragged to his bosses that through hard work and tenacity of their workforce, they had found the traitors in their midst. They didn’t want to admit that it was just pure luck that two guys volunteered it to them in exchange for cash and diamonds. A good outcome from pure luck, but with no admission of any mistakes the leadership made.
When I came into a leadership role, I was supremely uncomfortable when my people didn’t seem to recognize, accept, and show lessons learned from their mistakes. We all make them. The point is not to be hard on people, the point is I want to be able to look them in the eye and know that we’ll do better next time. We’ll move on, and better, as an organization if that happens.
Of all the things I worked on, whether analytics, coding, quantitative analysis, it was actually my boss’ first lesson of responsibility to me that was most important.
If you’re a good person, you’ll own the mistakes that end up badly.
If you’re a great person? You’ll own the mistakes that end up working out.
