How does your company react to mistakes?

The true test of a company’s character is when the chips are down.

It’s easy to manage and lead a company during a record year of growth and profitability. Yet, if anything this pandemic has shown us, it is which companies are innovative, creative, agile and customer focused.

Leaders in organizations have either risen to the occasion or miserably flopped. And make no mistake, employees and customers have taken notice.

This year’s events have really tested organizational infrastructure, systems, workplace policies, communications and the quality of products and services. Again, some companies have flourished while others continue to scramble for answers.

During this upheaval, mistakes have occurred at every organizational level, in many businesses. Some have been minor and barely noticed, while others reflect gross miscalculations.

These errors were to be expected in a period earmarked by dramatic change and conditions that seemingly changed daily. Though we are hopeful that 2021 brings about some “light at the end of the tunnel,” we still have many months ahead of us that will be challenging.

Recognizing that we still have a ways to go, it may be a good time to assess how your company handles mistakes and errors that affect the business including its employees and customers.

Here are a few ideas you may want to reflect on as to how your company stacks up in the eyes of its workforce, customers and prospective customers:

Nobody’s perfect — A great first step is to appreciate and accept that no one is perfect at your company. This acknowledgement needs to start at the top.

Reaction — When a situation arises where an error has occurred, is the first reaction defensive?

Does your corporate culture acknowledge that errors will and do occur, and that ownership of the mistake is the desired and supported behavior?

Acknowledgement — Does your company acknowledge to its customers when a mistake is truly the organization’s fault? Taking “credit” for the error is the first critical step necessary to re- establishing credibility with customers.

Listen — Genuinely listen to customers’ concerns and complaints. Being defensive or providing excuses does not help the problem. Simply listen to the customer, acknowledge the issue and ask

“How can we fix this issue for you?”

Timely response — The speed upon which a company responds to customer concerns can have a dramatic impact on resolving the matter. Delays in response time send a clear message to customers that your company simply does not care and can increase customer frustration with doing business with your organization.

How you respond — Last Wednesday a friend of mine mentioned that she received an email apology from a service firm she utilizes for her company. The apology was half-hearted addressing an extremely serious error that occurred in the delivery of the firm’s services to my friend’s organization. As a result, my friend sought other providers for the services needed and she no longer wished to work with a firm that could not even pick up the phone to call her to address the issue.

The moral of the story is to always pick up the phone when acknowledging a mistake with a customer. Electronic apologies are a great way to lose a good customer.

Mistakes are opportunities — Recognize that any mistake or error with a customer may be an opportunity to turn a bad situation into a great one.

Don’t just resolve the issue, figure out creative ways to wow your costumer with your response. It may be a big discount on their next order, eliminating the fees on the current order or some other idea that will send a message to the customer that you are sorry for the issue and are interested in keeping them as a happy client of your business.

Who is in Customer Service — Ensure that your company has the right people in place addressing customer concerns when issues arise.

Aside from employees formally in customer service roles, ideally every employee in your company should be an ambassador of your business and have the ability to listen and respond well, when confronted by a customer with a service and/or product issue.

The bottom line is to address customer issues the right way. Otherwise mistakes can turn an otherwise manageable situation and opportunity into an organizational mess that may not be recoverable.

Look, it’s fun and a lot easier to run a business when everything is going your way. Yet, an organization’s true reputation, future sales, customer relations, character and culture are really defined by the actions it takes when challenging issues, mistakes or errors arise.