Setting a Budget For Mistakes: How to See a Return on Your Failures – #0013

More Error, Than Trial

I love making mistakes, well intended ones anyway. It wasn’t always this way however. When you first start out on this journey, every mistake feels like it could be fatal! That’s not the case. I don’t see mistakes and small failings on the way as something to be scared of. In the early days its more “error” than “trial” as you take those early steps towards that first 3-5 year vision for your business. As you see the early mistakes play out, you realise they are usually one of two things:

1. A surface level scratch. Not an ideal result, but the lesson received in the days or weeks after are far more valuable than the slight hit taken.

Or, and even better…

2. A happy accident. Something unexpectedly good takes place as a result of a mistake or “mini failure” that wouldn’t have occurred otherwise.

It may well be worth considering putting a consideration in your budget for mistakes being made. This will breed confidence to try new things that should lead to success, but would be covered if not. More trial and eventually less error. When you include a budget line in your finical projections, the assumption is there will be an upside to that cost. A ROI. Absolutely, you can see the cost of a mistake as an investment. But How?

An Investment In Your People

What’s more valuable than a team member that’s never made a mistake? A team member that’s made 5 or more. Gross misconduct and deliberate acts aside, only average Founders and Operators sack a team member for making mistakes. Elite level entrepreneurs will see the cost of the error as an investment in the education of that individual.  A person you manage that has made an expensive mistake is more valuable than a fresh person that hasn’t. If they make a £20k error, you have just paid that sum to ensure that error is never made again. Or, you could lose the money anyway and bring in a replacement who doesn’t have first hand knowledge of how not to repeat the very same mistake again, or worse.

Real World Case Studies

Every quarter I hold an “all hands” meeting where the team share their biggest win and how they engineered it. This is a sunshine meeting that is held in SMEs up and the down the country, standard, boring. But also I encourage everyone to share their biggest error. Start with the most outgoing (don’t give a shit) team member and then see everyone else open up from there. The honest, the better. It’s great you can see the £20k as an investment in one person’s education, but if a department of 25 people can also hear how it played out, then you are really starting to upskill the team with real world risk and reward, and not a text book in sight.
Happy failing.

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