A Lesson In Profitability – Admit Your Mistakes

Does it frustrate you when a politician or business leader or friend explains away their bad judgment call (or illegal activity)? Do you lose faith in them when they try to deny something that they clearly did? Isn’t their “brand” tarnished for life? Of course it is! And its not just a bad approach for people, its a bad business too. Fessing up to mistakes is a much better and profitable way to go.

According to the book Yes! (pages 119 to 123), Fiona Lee, Professor of Psychology at the University of Michigan, conducted a study that suggests organizations that attribute failures to their own doing benefit both in public perception and in bottom line profitability. A review of annual reports that identified internal and controllable factors had a higher stock price one year later than companies that pointed to external and uncontrollable factors.

Think about the frustrating politician or friend again. If they admit what they did and give a plan to better things going forward, doesn’t that give you a whole lot more confidence than the blame game? Of course it does!

If it works for them, it will work for you too. Quickly admit your own mistakes. Clearly identify the cause and the control you have over it. Then provide a plan of action to fix things going forward. Not only will it give your customers more confidence, it will give your bottom line a nice boost.

Admit Your Mistakes