To Err is He-Man

While we are all familiar with the phrase ‘to err is human and to forgive divine’, it has more serious dimensions in the context of an enterprise. The character and success of an enterprise in the longer term has multiple linkages with its DNA, manifested on a routine basis in what kind of risk-taking the organization allows and nurtures. Individuals in an organization making honest mistakes, and the organization’s tolerance of these mistakes and how it deals with them are integral parts of an enterprise.

Recently, while I had some spare time during a delayed panel discussion, I had the chance to chat with fellow panelist—a promoter of a large successful company. I asked her about what she looks at while hiring resources. An interesting answer followed. She told me that she often asked candidates this: “How much money did you lose for your current organization over the period of your assignment there?” Most candidates would faint even considering an answer; those who did take up the challenge to give an honest answer would have to answer her next question: “Tell me about each assignment in which you lost money, and why do you think you lost it?”

The logic of this hirer is clear. If you have made mistakes and lost money, no sweat. More importantly, have you learned lessons from those mistakes, and can the employer expect you to not repeat them? As you have already felt the pain of losing money and making mistakes, your next employer will—in the least—not lose money on those same mistakes!

This also speaks volumes about the risk-taking nature of an enterprise. The perceived social stigma attached to failed entrepreneurial endeavors are deep-rooted in India, be it in setting up new enterprises as owners or in adopting unconventional careers as employees. The concept of failed businesses declaring bankruptcies in order to start afresh with new business ventures—a practice that’s commonly understood and appreciated in the West—appears to be decades away in India.

What is intriguing in large, scaled-up and evolved organizations, however, is that they invariably set up what they call ‘innovation centers’, ‘idea centers’ or ‘entrepreneurship cells’. The objective is to encourage employees to come up with potentially disruptive thoughts. If you traverse through the evolution of some of these organizations, you will see that they would have started out as risk-takers with new ideas and buzzing young teams.

But, as they grew, the spirit of adventure and innovation got replaced by hard systems and processes that are necessary to run behemoths. The challenge in a scaled-up organization is to retain this spirit of risk-taking and not be crucified for making mistakes while attempting to create something disruptive in terms of thoughts, products, services, practices, etc. In such cases and for such darers, I would like to say that ‘to err is He-Man’, as it takes courage to be a He-Man of this sort.

Often, an evolved organization faces the challenge of treating such He-Men differently than a large organization that’s focused on executing stated strategies and business plans would. In the case of entrepreneurial startups, too, this challenge mustn’t be ignored; such companies grow faster than they realize and, before they know it, have the same issues dogging their vibrant organizations. The trick, perhaps, is to take a few leaves out of the books of organizations like Google or Yahoo and sectors like advertising that deal with creative resources. As they say, you can’t direct a Philharmonic pianist—he is the director of the music he creates!

The views expressed here are personal.

BHARAT BANKA is the MD and CEO of Aditya Birla Private Equity.

Tags:
deal, mistakes, risk