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Stuff happens. Well-laid plans don’t always turn out exactly the way you’d anticipated. A sale that was one signature away from being finalized falls apart at the last minute. One missed detail takes a project down the wrong path and it then costs a significant amount to bring it back on track.

The leadership journey is fraught with unexpected challenges and unknown landmines, and sometimes even the smallest misstep by a leader can result in financial and reputational loss.

Some mistakes will be small, ones you can simply shrug off as minor bumps in the road. But others will be large, ones that affect major company objectives, directly impact profitability, or put important relationships in jeopardy.

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It’s how you respond to these large slip-ups that will determine whether you’re a leader or a manager.

When it comes to battling blunders and successfully moving forward, three essential actions separate the leaders from the managers.

Accept responsibility

Leaders accept full responsibility for mistakes. Unequivocally. Sure, other people and other factors may have contributed to the error, but at the end of the day, leaders admit accountability and take full ownership for the missteps. Leaders don’t blame; they don’t point fingers; they don’t deflect answerability. They own up to the mistake and they apologize.

When you accept ownership for errors made within your span of responsibility, you earn respect. You see, people don’t expect perfection from their leaders. Rather, they appreciate you more when you show vulnerability, when you let them see that you have experienced the same problems and overcome similar obstacles as they have. So when leaders create an environment of transparency by being honest about where they messed up, ironically they warrant admiration rather than contempt.

But acknowledging culpability and showing contrition isn’t enough, it is only the first step of three.

Mitigate the damage

Leaders also take deliberate and measured actions to mitigate the damage. They seek to either resolve the situation or minimize its impact. When plans go awry, they develop an alternate approach. When a contract negotiation begins to falter, they look for points of commonality and concession. When a job is completed incorrectly, they find a way to either fix the mistake or redo it from the beginning. No matter what the issue is, they always make it a point to keep senior management in the loop, emphasizing the specific and the quantitative, the impacts and outcomes, and the corrective actions being taken and planned. Fixing mistakes is rarely easy, but the harder they are to correct, the greater the potential to separate the leaders from the managers.

Identify the lessons learned

The third step is the one that is most often missed. It is to deliberately and thoughtfully learn from the experience by identifying the lessons learned. What needs to be modified – processes, training, documentation or something else – in order to prevent the same or similar mistake from occurring again?

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This exercise should be done with your team, rather than in isolation. Given that your people are on the front lines, they likely have compelling insights into what went wrong and how a similar situation might be avoided in the future. But it requires a climate of trust to make this work. And this goes back to your willingness to accept responsibility for the mistake in the first place. When leaders admit to making mistakes, it not only earns respect, it ultimately builds a culture of trust. And it’s this environment of trust that will permit and encourage your staff to speak up and offer pre-emptive solutions for the future.

Once you have determined what procedural and other changes need to be made, articulate them to your senior management. In order to maintain their confidence in you and your team, they need to know what you’re doing to prevent such blunders from occurring again. And perhaps most importantly, make sure you follow through and keep whatever commitments you make as part of this final step.

Leaders know that all decisions carry risk and therefore come with potential obstacles that can sometimes derail progress. But when bad stuff happens, what separates the leaders from the managers are three things. Leaders readily take responsibility for what went wrong, actively work to fix the immediate problem and then deliberately look for ways to learn from the experience.

Merge Gupta-Sunderji is a speaker and consultant, and founder of Turning Managers into Leaders.

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