Full Disclosure: When to admit a mistake

I lost Acentia about $12,000. Oops! Not fun. I made a calculation error and we went over the ceiling on our contract. I was watching the burn rate and keeping good track of things, but I had recorded some hours incorrectly for April/May and it threw off the totals. So at the end of the contract, we discovered that we went over the ceiling and will have to write it off.

When the mistake was found by accounting, I informed my manager by email that I had made a calculation mistake. We talked briefly about it. I know that the mistake went up to the CFO level because they monitor all contracts and take a look at those types of issues. So now everyone at that level knows I made a mistake.

Then I went off and told my staff yesterday. I have asked my project managers to put together a project review presentation once a month and to present to the rest of the team. In those reviews, I’ve asked them to identify risks and trouble spots. They don’t do the financial stuff, but there are plenty of things that can go wrong and I want them to begin identifying problems and presenting them. So I gave a presentation to them so they would get an idea of what we are doing and I included the fact that on the contract I made an error and we went over the contract amount. So now everyone knows.

Let’s backtrack a couple months. I had the chance to interview our CEO for my MBA class. We discussed leadership and development. One of the things he said was that in developing people, you have to allow them to make mistakes and as long as the mistake isn’t reckless, you have to live with it and help them learn. So my mistake obviously wasn’t reckless. I figured out what I had done and for the last six months my numbers have been right on. So that won’t happen again.

I believe that you should own up to your mistakes and fix them. Things happen. We all learn from mistakes. So when accounting figured out we were over and I figured out my mistake, I let my boss know. I think that’s the right thing to do. Often, the cover up is greater than the crime. Yes, I made a mistake. I’m sorry and I won’t do it again. In fact, I’ve already figured out what went wrong and have fixed it.

So why go ahead and tell my staff? I’m trying to help them to identify problems in their projects and I want them to feel comfortable coming forth with issues. By admitting to them my mistake, I hope that it sends a very strong and clear signal that mistakes are part of the job and that it is safe for them to speak up about a mistake they have made. We have a tendency to want to sugarcoat things; make them appear better than they really are. And especially when the boss wants to know what’s happening. We give him the good news! But that’s not what we really need to run projects and departments and companies. We need to know what the problems are so we can fix them before they become too large to handle. I hope it works. I noticed their faces when I presented that to them. They were suddenly very interested in what had happened. I’m sure they were surprised that I would share that with them. I hope they get the message and as we progress through the project they feel empowered to bring up problems with me so we can address them as a team.

We’ll see. I’ll report back on how things go next month.