How to Turn Your Mistakes into an Advantage

By Dylan Walsh

“To make mistakes is human,” wrote the artist Elbert Hubbard in 1915, “but to profit by them is divine.” A century later, Yale SOM professor Taly Reich and two colleagues have taken a step toward characterizing this alchemical process—what is required to turn mistakes into gold.

“People have the notion that mistakes are always bad, and that communicating mistakes to others will make them see you as incompetent,” Reich says. “But I’m interested in the upside of mistakes: under what conditions is this not the case, and how might people benefit from acknowledging a mistake?”

In a recent paper published in Organizational Behavior and Human Decision Processes, Reich, along with Daniella Kupor of Boston University and Kristin Laurin of the University of British Columbia, reveals that admitting to a mistake under certain conditions can make a company appear to care more about its goals—and thus seem more likely to meet them. The result is that admitting to error can create a positive impression on consumers.

Read the study: “The (bounded) benefits of correction: The unanticipated interpersonal advantages of making and correcting mistakes”

Reich and her colleagues confirmed this result over a series of experiments. In the first, study participants were told about an ice cream company, Best Scoops, that only sources high-quality vanilla. One group was then told that when Best Scoops’ supplier announced a shift to lower-quality beans on its website, Best Scoops preventively found a new supplier. A second group was told that Best Scoops mistakenly used the lower-quality beans until realizing the error and correcting it. Those in the second group, in which Best Scoops erred, reported Best Scoops as more likely to achieve its goals. Other experiments of similar design demonstrated a greater willingness to purchase from companies that made and corrected mistakes compared to those that simply prevented mistakes.

Underlying this behavior is a simple chain of assumptions. First, people believe that correcting an error requires greater change to the status quo than preventing one, and therefore greater effort. Second, people tend to associate greater effort with a greater commitment to goals, and so a higher likelihood of achieving them.

“People have a hard time evaluating effort in isolation, and because it’s so hard they simply infer what they can,” Reich says. “If the status quo has changed, it’s easy to believe a lot of effort has been put in, whether or not that’s true.” In fact, Reich and her coauthors found that the benefit of airing mistakes disappears if people are informed that the companies taking preventive and corrective action exert equal effort. When the researchers made this comparability clear to a subset of participants in the study, those participants said the companies would be equally likely to achieve their goals and didn’t express a preference for patronizing one over the other.

Of course, not all mistakes are equal. Reich and her coauthors say that if an error is attributable to a “stable cause”—that is, one that does not seem likely to change—then the mistake does not come across favorably. “If we think that a person cannot correct a mistake, that something is unfixable or the person is incompetent, then we don’t think of them as more likely to achieve their goals when we learn about the mistake,” Reich says.

The study points to some general principles about the best way to cop to a mistake, according to Reich: to start, emphasize the first-time nature of your mistake (assuming that’s the case) and demonstrate the effort you’ve invested in correcting it; make clear that the mistake was not caused by some fixed and stable trait, but by something correctable—a lack of knowledge, or a faulty operation. Finally, explain how you’ve addressed the root cause, so it won’t occur again.

Reich also points to further questions that need answering: does it matter how long it takes for a mistake to be corrected? Does the magnitude of the mistake alter results? And what if consumers, rather than observing or hearing about a mistake, are personally affected by it? The answers are of particular importance given the immediate practical implications of these results: mistakes, as Hubbard pointed out, are eminently human—and we all make them. Are there times when individuals ought to emphasize these errors? Rather than offering “perfectionism” as your greatest weakness in an interview, should you describe a mistake and the correction that followed? On the other hand, should companies that are working hard to prevent mistakes expend resources to publicize their effort?

Our culture is awash in the mythical slogans of entrepreneurship, with “fail forward” prominent among them. Academic literature, too, is filled with studies of the personal benefits people can gain from their own mistakes: if we don’t let mistakes stop us, then they help us grow. But from this study comes a novel perspective on the interpersonal benefits that might be gained from making (and then correcting) mistakes. “In situations where a mistake is perhaps not too grave and not attributable to a stable cause, then go ahead and be explicit about it,” Reich says.