Why Encourage Mistakes?

You can’t just tell employees that you support their decisions to take big risks that could result in mistakes – you have to prove it to them.

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In my first year as a leader here at SurePayroll I encouraged employees to take risks. I stressed that if employees don't make mistakes they're playing it too safe and not stretching themselves to a point that will help them – and our company – grow at an accelerated rate.

I used every analogy under the sun to convey that we truly supported their decisions to take risks and make mistakes. I talked about how a baby falls down hundreds of times before taking her first steps. I related stories about many crucial life-saving inventions, such as penicillin and the pacemaker, that were created out of mistakes. And I continually talked about my business mistakes. I thought, if the president will stand up in front of everyone and admit mistakes, wouldn't employees be comfortable talking about theirs, too?

The answer is no. While employees seemed happy to be working for a company that wouldn't throw the axe with every mistake, they really weren't telling me about the juicy, exciting mistakes worthy of being turned into a company lesson. After all, we live in a culture that punishes mistakes. For many, admitting failure and expecting praise is like putting their hand on a hot stove and expecting not to get burned.

It occurred to me that I can't just tell employees that we support their decisions to take big risks that could result in mistakes – we have to prove it to them. I had to find a way to 'formalize failure' and allow employees to get over the stigma associated with it. I did it by creating a 'Best New Mistakes' competition – a contest that awards employees for providing me with their most unique and interesting mistakes.

In order to participate, employees must nominate themselves. They explain the mistake and give detail on what they learned from it. And, of course, the mistake must be new, as we expect employees to learn from their and others' past mistakes and not make them again. Entries are read and discussed at an all-company meeting and the winners are given cash prizes. It's all approached in a light-hearted manner, giving everyone the opportunity to learn while having fun.  After six years running, it's one of SurePayroll's most innovative learning initiatives.

The truth is everyone makes mistakes, every day. If the mistakes come from an honest place – one of trying to do right by the company or customers – it should be a welcomed one. Why not let your employees know that you appreciate their efforts and are even willing to reward them if you can use them to better your business?

Do you have a unique program for rewarding risks or mistakes in your business? I'd love to hear. Leave it as a comment to this blog post.

Michael Alter is president of SurePayroll, America’s leading online payroll service. He received an MBA from the Harvard Business School and holds a bachelor's degree in economics from Northwestern University.