The Apologetic Entrepreneur

There’s something we all need to do from time-to-time, but many of us find it to be quite difficult. To become great leaders, entrepreneurs need to be able to perform this act in a genuine and authentic way. And yes, there’s a right way and a wrong way. Before I give away the punchline, let me share an example that will illustrate the concept.

Our company has a set of core values that includes Integrity. One of the individual actions prescribed in this core value is, “I speak directly with people to resolve issues as they arise.” This translates into the notion that rather than triangulate with other people about a problem we are having with someone, we go directly to that person to resolve the matter. Seems simple enough, right? Now, suppose a member of the team is in a meeting with senior leaders including the CEO and this team member makes a comment that makes other uncomfortable. Some might believe the comment to be slightly disrespectful to the CEO. After the meeting, the CEO and a couple of the senior leaders are debriefing, and the CEO mentions that the comment that was made was probably inappropriate. The team member’s supervisor then goes to the team member and advises her that she should refrain from making similar comments in the future. The team member becomes upset that the CEO didn’t address this directly with her. What should the CEO do?

This situation actually occurred in our company and the CEO was me. It was brought to my attention by the supervisor that I may not have been keeping with our core value of Integrity because I triangulated with that supervisor rather than bringing the issue directly to the attention of the team member. What did I do? I picked up the phone and called the team member (who is based in another city). I told her that I had in fact mishandled the matter and should have come to her to discuss it. And I apologized for screwing up. In no way was this individual trying to deflect away any focus on her comment – she admitted that the remark was inappropriate, and she apologized to me. But she was absolutely right in her observation that a fundamental core value had not been observed.

Earlier in my career I might have been defensive about the feedback I received. I might have been indignant that somehow, I was wrong when it was another person who made the inappropriate comment to me in the first place. But I’ve learned a lot over the years and particularly how important it is to expunge false pride and an unhealthy ego to become a humble leader. Learning the Art of the Apology has been of great value to me.

Telling someone we’re sorry and admitting a mistake is important. But the way it’s done and what we say is equally critical. We’ve all heard this kind of an apology. “I want to apologize if what I did offended you.” This isn’t an admission that the perpetrator did anything wrong. He is simply apologizing if you are offended. The correct apology would have been, “I am sorry and want to apologize to you because what I did was wrong.” Another mistake is that of trying to rationalize the offense and then apologizing for it. In a way we’re still trying to defend what we did – although somewhat weakly. And it can come across in a condescending sort of way with the message that the aggrieved party is overly sensitive.

Smart entrepreneurs admit their mistakes and move on. Not making the same mistakes over and over is also a factor here. When a team member sees the leader of the organization easily and genuinely apologizing for his or her toe stubs, it goes a long way toward making it easier for others to follow suit.

This blog is being written in tandem with my book, “An Entrepreneur’s Words to Live By,” available on Amazon.com in paperback and Kindle (My Book), as well as being available in all of the other major eBook formats.

Tasty Crow

Crows are remarkably intelligent and can live as long as 20 years. They typically have a wingspan of more than three feet and weigh nearly three pounds. A crow can fly up to 60 miles per hour and have been found as high as 14,000 feet in mountain ranges. Being smart, fast and able to fly to great heights make them particularly hard to catch. Recently I had to catch one so I could eat it . . . metaphorically speaking of course.

To be a successful entrepreneur we must have an acquired taste for crow. We’ve all heard the saying “to eat crow” which connotes humiliation and having to admit the making of a mistake. Sometimes our ego gets in the way and we do everything we can to avoid admitting that we made a mistake. We may point the finger at others. Or we may try and cover up the mistake hoping that its results will somehow vanish into thin air. I can tell you that all of these tendencies are mistakes.

One of our companies is involved in acquiring apartment properties across the country. We sold two such assets within a much shorter holding period than we had initially projected because of an opportunity to generate substantial profits. Members of our team prepared a detailed spreadsheet that showed how the sale proceeds would be distributed. These were large and complicated transactions with several tranches of equity provided by different investors. I was pleased to call two such investors to deliver the good news that they would be receiving a significant multiple of their original investment. Needless to say they were thrilled.

Within days, I received a call from my partner who oversees our apartment acquisition business unit. Apparently there was a bust in the calculations and these two investors would be receiving less than what I had told them. They were still receiving a substantial gain on the sale, but not quite as much as the expectation I had set. The mistake was honest and unfortunate but it still had to be acknowledged. Thus, I went about the task of eating crow.

I called both investors and said the following, “I’m sorry to tell you that the distribution figure I provided the other day was erroneous. We made a mistake in calculating the sale proceeds and your new amount is $X. Happily your profit is still much greater than we projected when you made your investment three-and-a-half years ago. I wanted to get back to you as soon as I learned of the error and I hope that you will still be interested in looking at future investments with us.”

Because we are a team I did not point a finger at the person who was responsible for the calculation. Instead I said that “we” made a mistake. I did not make up an excuse for what had happened. Simple but painful. The result was an expression of understanding on the part of both investors. I’m sure they were disappointed but there were no angry words and in both cases, an indication of interest in looking at the next deal.

Relationships are built on trust and can be strengthened in situations where things don’t go as planned. But this happens only when honesty and transparency are the top priority.

This blog is being written in tandem with my book, “An Entrepreneur’s Words to Live By,” available on Amazon.com in paperback and Kindle (My Book), as well as being available in all of the other major eBook formats.

crow