The Leadership Lessons You Can Learn from Failure

We’re told we learn the most by making mistakes, and as a leader, sometimes the mistakes you’re going to learn from are going to be some real doozies. One mistake I had to learn is that you have to trust people until they prove they can’t be trusted. I learned that one the hard way.

When I was at RobRoy, and we were rebuilding one of our factories, I was writing machine contracts to rebuild the plant. One of the things that I required was that all contracts we signed had to include a clause that, if there were any disputes, they would be handled in Texas, not in the home state of the vendor.

Well, I let a $1.5 million contract go that I assumed had the clause in there. I didn’t check it because I trusted the people who were actually writing the contracts to include this particular clause.

Our purchasing agent sent a contract to a vendor that did not include the clause in the first place. It was never in there. They signed it, we signed it, and we placed the order. As we tested the vendor’s machines, it became clear that their technology was — to put it kindly — a crock of shit.

So I canceled the contract, and the long and short of it is it cost me $600,000 to get out of it. Why? Because we had to dispute the contract and follow the laws of the vendor’s home state and not Texas, where the courts tended to be a little more favorable to businesses like ours in case of a dispute.

That’s a hell of a lot of money today, let alone back then. So from then on out, I made everyone bring their documents and contracts to me so I could check them. It didn’t matter where I was; they had to show me that the disputes clause was in there.

Yes, it was a complete waste of time, and, yes, it should have been handled by the professionals I had hired to do that kind of thing. But I just lost $600,000 because I had trusted the professionals to do the thing I had asked them.

I learned the old trust but verify rule, and it was probably the most expensive lesson I ever learned.

Oh, but it wasn’t the only one!

Another time, I was buying a piece of land for one of the RobRoy factory properties. I found the piece of land, and we had done all the calculations based on the kind of electricity and water we would use before we ever purchased the land from the city.

So I asked the city manager, “Can you ensure you can supply the power and water for what we need?” He said yes, and we bought the land. Except it transpired that when the final day came to start pumping water into this facility, they didn’t have enough pressure in the city system to facilitate what we needed, including a fire service. He pretended not to know what we were talking about and denied ever telling us that the city could manage it.

I ended up paying to install a 100,000-gallon water tank to hold the water so the city could fill up the tank after hours, and we could operate during the day. It turns out, it’s also impossible to sue a city because they have sovereignty, which meant the city manager didn’t have to pay for his incompetence or face any consequences. In fact, he’s still around, and they’re still filling the 100,000-gallon tank.

Those ended up being hard lessons.

I hope you learn these lessons for yourself and don’t have to learn them the hard way.

1. Trust-but-verify. Make sure people are doing the important things you asked them., Double-check what they’re doing and set up processes and checklists that make sure they’re doing the things you asked them to do. Don’t get stuck with an expensive mistake because you either trusted the wrong people or didn’t have the right processes in place.
2. Get it in writing. It wouldn’t have helped us in a case against our incompetent city manager, since we couldn’t have sued. But by forcing him to put things in writing, he might have been forced to check with his utilities people that they could actually deliver. And we could have avoided buying a piece of property that ended up costing us a lot more than we ever wanted to spend to fix his screw-up.

I’ve been a manufacturing executive, as well as a sales and marketing professional, for a few decades. Now, I help companies turn around their own business, including pivoting within their industry. If you would like more information, please visit my website and connect with me on Twitter, Facebook, or LinkedIn.

Photo credit: Malachi Witt (Pixabay, Creative Commons 0)