The Simple 4 Steps You Must Take to Recover From Any Failure

When you’re running a fast-moving, high-growth company, mistakes are inevitable–and very few leaders handle them well. Some blame others for their blunders, while others just deny they’ve erred in the first place.

While denial and blame may make you feel better, they do nothing for the situation and certainly don’t improve your standing with clients. Internal morale issues with your team could create a second disaster in the wake of the event.

If handled correctly, screwing up can actually improve your relationships with your clients and help better your team. Here’s my four-step plan to correctly navigating the issue, building even stronger client relationships and keeping team morale high:

1. Own your mistake.

Before you do anything, you have to own the problem. If your employee screwed up, in your client’s eyes, it wasn’t your employee; it was you. You must recognize that you are ultimately responsible for the problem and you must take responsibility for the issue. By taking ownership, you take control.

Ruby Newell’s book Understanding Customers explains that it takes 12 positive experiences to make up for one unresolved negative one. Before you brush off the issue, are you prepared to work 12 times as hard elsewhere? It’s better to “own up” now and start the process of resolving the problem.

2. Admit fault.

Now that you’ve taken ownership, it is critical that you communicate this to the client. It’s not enough to tell the other party that a corrective action is being taken. You must express your responsibility for the matter and admit fault.

This makes you human, and the human on the other side of the apology will sympathize. It’s the first step to regaining your client’s trust.

My last company ran text-message contests at major events. Early in the company’s history, we were working with a major circus. At each circus event, the crowd would be able to use their phone to “text in” for a chance to win a nightly prize. Only one prize was to be given away each night.

One evening, I received a call from a very overwhelmed event manager. It turns out we configured the campaign wrong, and instead of notifying one person they had won, we notified everyone who had entered. It was a catastrophe. The ticket booth was mobbed with winners.

I immediately told the manager that it was clearly my mistake, and how wonderful it was that all of these contest entrants won! My company was paying for prizes for everyone who entered. (Admittedly, this was a very expensive way to admit fault.)

3. Over-respond.

Depending on the mistake, it’s often not enough to simply correct it. Damage beyond that mere mistake is done. To fix it, find ways to over-respond. This could be through providing a credit that is two or three times the size of the underlying loss, or through an act that fixes the problem.

My current company automates writing handwritten notes, using robots. One client, a snack company, includes our notes in “apology boxes” it sends to customers that had bad experiences. By sending a note and a little gift (an extra box of snack goodies), our client found that these apology boxes created customers with lifetime values much greater than customers that hadn’t experienced an issue in the first place.

Now, this snack company “goofs up” on purpose, just so that it can over-respond and generate greater loyalty. No joke.

4. Communicate, fix, and communicate fixes.

Now that you’ve fixed the problem, and probably made a customer for life in the process, it’s important to not repeat the mistake.

Communicate with your team about the improvements that must be made. While the client might have ended up being very happy with the result, you might have team members who feel guilty or dismayed–and they’re important, too.

Just as you asked for your client’s forgiveness, give the responsible team member the benefit of the doubt. Teachable moments can also build a strong internal company culture and some of your best employees might come from some early slip-ups.

Again, don’t forget to communicate to the client about the fixes being made. While they’re sure to think that you responded well, they’ll also want to know what fences are being installed to prevent this from happening again.

Developing a customer-focused culture isn’t just about fixing what breaks. Every interaction with your client should include a wow-factor. However, according to a 2007 review in Current Directions in Psychological Science, bad memories are retained more than good ones. You need a strategy in place to quickly react and over-respond to these cases, before your clients dump you–or, even worse, write about their experiences on social media.