After many years as a CEO launching and running companies, it’s clear to me that the best way to learn is simply by making mistakes. One of our core guiding principles at my fintech company Capitolis, and the question I ask myself and my team every time we have a major decision to make is: whose mistake is it to make? When we screw up, we are forced to figure out what went wrong and how we can do better. We gain muscle memory and humility—and if we’re smart, we will never make the same mistake twice. When I give my team (and myself) the agency to make mistakes, I am effectively giving them the opportunity to grow and learn. That is a winning entrepreneurial culture.
Resist the temptation to play the boss card
There have been many instances when people on my team made choices with which I did not 100 percent agree. It would be easy to overrule them and make the decision that I think is right. I’m the boss! But I resist that temptation—because even if someone is indeed making a mistake, if the decision is within their area of responsibility, it is their mistake to make. With prospective new employees, for example, if a manager would like to hire someone on their team, and I as part of the hiring process am not in favor, we will discuss the pros and the cons of both approaches.
In the end, my response is: it is your mistake to make. I will not overrule (except for very rare cases) because failing to empower my team’s decision-making robs them of important growth opportunities. I have been opposed to hiring people who turned out to be superstars. Had I unilaterally vetoed those hires rather than enabling my team to make decisions, those new hires would not be contributing to our success today. I’m proud to say that my team has proven me wrong many times, and I learn from their wisdom.
Make space to learn from mistakes
For this management style to succeed, it is incumbent on the founder/CEO to set the tone for the organization by creating space for mistakes. When a team member inevitably makes a decision that in hindsight could have been approached differently, take the time to analyze what went wrong and figure out how to fix it and change course. There is never value in an “I told you so” moment. Respect that it really was their mistake to make, and equally their lesson to learn.
Creating an environment where we embrace mistakes is a win-win strategy: If your team makes a decision that you, the CEO or founder, don’t like, and you are proven wrong, the company wins. If, as the CEO, you entrust someone with what turns out to be a bad decision, then the whole team has an opportunity for growth that would not have happened if you deprived your team of the chance to test their instincts.
Encouraging failure, responsibly
Mistakes and failures are important parts of what we do, providing growth and learning opportunities. Embracing this mindset responsibly requires the right infrastructure: expecting serious due diligence from your team and ensuring your leadership team always keeps a watchful eye on critical business decisions.
Obviously, there are some decisions that are truly critical, in which case a leader should not be so relaxed. I’m not promoting recklessness—I appreciate the blessing of a skinned knee, but I’m not about to send the kids out to play in traffic. Similarly, if as the founder you feel the consequences of a decision can be truly catastrophic, it is sensible to make an executive decision to overrule. It happens, but rarely.
It’s founders’ mistake to make, too
Successfully practicing this mindset in your company means the same rules apply to founders and CEOs as well. Sometimes, you will make decisions with which your team or your board may disagree or push back. Good! Encourage them to do so. It could be a hiring decision to the executive team, a contract negotiation with a client, or a decision to launch product or kill an existing one.
Do your homework and research; think things through from every angle, invite others’ perspectives, and always hear them out—and then remind them that a particular choice is your mistake to make. I don’t believe in groupthink. If I’m right, we win; if I’m wrong, we analyze, regroup, pivot, and course correct. We don’t lose.
A healthy entrepreneurial environment encourages people to speak up when they disagree, and to take bold chances. That’s how great people and great businesses learn and grow. An organization where people are afraid to make mistakes—or worse yet, paralyzed by fear of failure—will ultimately stagnate and will never scale to be all that it can. In a thriving, growing business, we fail for a living!