Tuesday, July 17, 2012

Errors, Midjudgments and Dishonesty-They aren't all created equal

This may seem self evident but all errors and misjudgments aren't equal.  That said, there are no "shades of grey" when it comes to dishonesty.  It's important that leaders are able to distinguish among different kinds of errors and misjudgments and dishonesty.

The difference between errors and mistakes that can be forgiven, and those that cannot, really has to do with the consequences that result from the error or mistake.  I strongly believe staff need to be able to make mistakes...that's how we learn.  You don't want staff asking permission to do every task.  In addition, taking decisions and managing risk is an important component of leader development.  A short list of  the kinds of errors that should be correctable might include such things as overspending an allocated budget, missing deadlines, failure to coordinate with key stakeholders, poor prioritization resulting in over-promising and under-delivering,  and failure to properly accrue year end expenses.  This list could go on and on.  The point is, mistakes will be made and should be used as learning and development opportunities.  There are limits.  Staff shouldn't be making every possible mistake, nor should they make the same one twice.

There are errors and misjudgments that cannot be forgiven or written off as a development experience.  These mostly have to do with consequences.  There are those that have to do with catastrophic business loss or reputational damage due to undue risk.  A short list would include the recent losses at JP Morgan, the Deepwater Horizon spill in the Gulf of Mexico,  "no docs" mortgages to people who have never paid a debt, and the space shuttle Challenger disaster in 1986.  Yes, lessons should be learned from these incidents, but those in positions of responsibility must be held accountable for these type errors and misjudgments.   Another type of "unforgivable" has to do with violations of company values(honesty, integrity, respect for people as an example), violations of company business principles(rules, standards, expected behaviors) or some types of health, safety and environmental policies.  An example of the health, safety and environmental "unforgivables" are the twelve lifesaving rules in Shell.  A violation of any of these rules, in any part of the company globally, is grounds for dismissal.
The last category in the "errors, misjudgments and dishonesty" group, is of course, dishonesty.   Sometimes there is a fine line between violation of "the rules, regulations or standards" and dishonesty.  The key differentiator for me between rules violations and dishonesty has always been whether or not there was an "intent to deceive".  Often a forgivable rules violation turns into dishonesty when actions are taken to "cover up" a violation.
Great leaders know the difference among errors, misjudgments and dishonesty.  They create an environment where mistakes can be made and both personal and professional development can be robust.  They also take actions to be explicit about errors that are unacceptable and put in place processes to mitigate risk in complex business activities.

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