Everybody fails. You probably have and will continue to in the future. Failure is part of the journey to building a successful and positive company reputation. Why so? Because you need to figure out what doesn’t work to focus on what works. And when you stumble across something that doesn’t work, you need to know how to make the most of it. However, failure in a company is a public process. It’s nothing like burning your cookies in the privacy of the kitchen. At home, all you need to do is to throw them in the trash and start again. Nobody will ever know about it. But at work, you can’t hide a failure from your coworkers and clients. It’s the problematic relationship between mistakes and reputation that can make or break your company.

 

To the leader who failed

Gerald Ratner once was at the head of a successful jewelry chain group in the UK and the US, the Ratner group. The products were thoroughly regarded as tacky, but that didn’t stop them from being hugely popular. Until 1991, when Ratner commented on the quality of the jewelry items, describing them as ‘cheaper than a […] prawn sandwich but wouldn’t probably last as long’. The speech, which is now referred to as ‘doing a Ratner’, caused the collapse of the company. As for Gerald Ratner, he’s still active, and he’s proven that the 4-step failure strategy – accept, plan, breathe and dig deep – can go a long way into regaining your position. He wrote about the speech and has made a living telling others what not to do.

 

The company that takes responsibility

While Ratner’s mistake was heavy in consequences, it didn’t lead to external damages. Not all mistakes are as clean. A shop sign that collapses on a bystander by a windy day or a delivery van that causes a road crash affects the public dramatically. When there are casualties involved, you need to work closely with legal advisors to sort the issues – you can learn more here about the share of responsibilities when a company vehicle causes a traffic accident and how to make it up to the victims. At best, you want to avoid an accident. But when they happen, you need to work with the relevant authorities to sort it out and support the victims.

 

The employee who got it wrong

Employees get things wrong too. But, it’s the company’s role to support them during the learning process and help them to fix the error – that’s assuming it is an honest mistake. But if your employees are afraid of making mistakes and take accountability for them, in the long-term the fear behavior is damaging your business. Errors are a necessary part of self-improvement. When mistakes can’t happen, your staff can’t learn from them. The bottom line: Allow people to get things wrong if you want your company to maintain its competitive edge.

Find solutions together

How you handle mistakes is the key to turning mishaps into successes. From fear to denial, a negative attitude towards mistakes doesn’t stop them from happening. But it affects your reputation when you fail to handle them effectively. Acknowledge what went wrong and work towards the resolution for those who are involved, whether employees, clients, or innocent bystanders.