Businesses that don’t learn from past mistakes are doomed to repeat them

We’ve all heard the idiom in this headline about continuously repeating the same mistakes and the ramifications of not remembering them. But unfortunately, history shows that many companies seem to operate based on Groundhog Day. Instead of learning from the past to build for the future, even the smallest companies allow these bad memories to fade quickly into oblivion.

Typically, when a business takes a misstep, everyone involved at the very least thinks to themselves, “How could we have been so dumb and not seen this coming?” After a significant error, good companies quickly launch a deep dive into the causes and effects, often publishing their results from which all involved can learn. Companies in the public eye go one step further and release their findings first to show that they take these matters seriously and secondly to reassure anyone willing to listen that this will never happen again. So far, so good. However, after a period of self-flagellation, many companies choose to put the matter permanently behind them without a second thought. In part, this is a defense mechanism to avoid self-recrimination and fixating on negatives.

Compartmentalizing issues is not a bad thing and can move a business forward. However, before putting anything that didn’t work into an obscure file cabinet drawer, one more step can help prevent a similar Groundhog Day situation in the future. This becomes particularly important as time passes and the nuances of what went wrong tend to evaporate with time.

A good safety net to avoid this occurrence is to formalize a process that management can refer to on a go-forward basis, particularly when a new initiative is contemplated. This book documenting sins of the past becomes a part of the company’s institutional memory even after the perpetrators of the unintended consequences may be long gone. Making the book required reading for new managers is another method to raise awareness of proven pitfalls to avoid.

An added benefit of formally chronicling negative results is that a comprehensive narrative can provide insights into other possible unrelated but tangential actions that could cause a similar adverse impact. Frequently on a second review, even years later, it could become evident that the problem perhaps was having the wrong type of specialists involved with critical aspects of directing the undertaking. For example, instead of having the financial team call the shots, a better choice would have been to have the marketing group drive the process. Another discovery could be the importance of not skimping on the budget for garnering second opinions from geographically diverse focus groups to avoid a regional bias emanating from where the single research site took place.

Paraphrasing Albert Einstein, the definition of insanity is doing the same things over and over and expecting a different outcome without remembering they didn’t work in the first place.

In the DNA of every organization, no matter the size, is experience. Experience, both good and bad, is invaluable in growing a business. Of course, no company likes making mistakes and being wrong, but operating in a Groundhog Day culture will guarantee that forgotten past sins will doom the future.

Visit Michael Feuer’s website www.TipsFromTheTop.info to learn more about his columns, watch videos and purchase his books, “The Benevolent Dictator” and “Tips From The Top.”