In September 2011, the American-based media provider Netflix announced that it planned to raise prices for its services and separate into two companies: a DVD mail order service it would call “Qwikster” and an internet streaming service that would retain the name Netflix. Customer response was almost immediate and extremely negative. Netflix estimates it lost almost a million customers and watched its share price fall substantially. In October 2011, Netflix reversed course. In a series of apologies it admitted it had made a mistake in underestimating the appeal of a single website and service called Netflix and that it was abandoning its plan for a Qwikster brand.
The cover story of Bloomberg Businessweek’s May 13, 2013 edition chronicles what it calls “one of the all-time great comebacks” by Netflix over the last eighteen months. Was this all due to their apologies and abandonment of Qwikster? Of course not. But it is easy to imagine the critical role their rapid reversal played as a catalyst.
What I love in stories like this is how they illustrate the power and positive impact of acknowledging a mistake — or if you like, a stupid or dumb move — and doing so reasonably fast. It quickly disarms most of your critics who lose the ability to claim you made the mistake that you have just acknowledged. They may still wish to focus on your fallibility but from your perspective, you are now free to engage in what I call “a do-over”, or golfers call a “mulligan”. You may have some damage to repair but the faster you get at it, the better.
So if a rapid acknowledgement of a mistake has such advantages, why do so many of us — managers and non-managers — often refuse to do so? I believe this is a very complicated psychological question that I will leave to others more qualified to answer. Suffice to say the process is challenging. It requires the intellectual and emotional ability to distance ourselves sufficiently from our actions to see the facts for what they are and the maturity to humble ourselves in front of others by admitting we were wrong.
Putting causation aside, I believe it is more fruitful to focus attention on the damage done when an individual simply refuses to acknowledge any misjudgment or mistake, even in the face of overwhelming evidence to the contrary. Essentially, time spent defending a mistake is time wasted. Counter-productive efforts delays productive behavior. Needed damage control and repair are delayed, while others are forced to witness a painful and immature display of denial. Worst of all, the therapeutic and cathartic effect of rapidly acknowledging a mistake erodes proportional to the length of one’s disavowal.
It helps, I believe, to remember what the admission of a mistake actually amounts to: THE ACKNOWLEDGMENT THAT WE ARE JUST HUMAN and that’s not so bad after all. Especially for managers who must make so many decisions and judgment calls that the law of large numbers virtually guarantees that mistakes will occur, the self-acceptance that we are not perfect, have our flaws, possess our blind-spots, and will from time to time get it wrong, makes it easier to acknowledge a mistake and rapidly move on.
The best managers make a practice of confronting reality square in the face, acknowledging their misjudgments to others, and turning their do-overs into corrective action. Moreover, achieving adult maturity requires that all of us learn to practice such honesty and corrective action in our every day lives.