There are two types of leaders when it comes to dealing with their subordinate’s erroneous decisions. On the one hand, you have leaders quick to punish direct reports that make the wrong decision. On the other hand, there are the leaders that genuinely care for the learning of the direct report. The servant-leader is the second one.
When I worked as the head of Banking Operations a few years ago in Saudi Arabia, I made an erroneous decision. Actually, I made several but different wrong choices in my career. However, I also experienced different ways of processing by my direct manager.
Back then, I was reporting to a British direct supervisor. One of the departments reporting to me was payment processing. The responsibility included fund transfers both local and abroad. It also carried the responsibility of payroll processing for our corporate and government clients.
When I took on the new role, I was utterly dependent on my direct reports to walk me through the critical processes of their function. I depended on my manager in charge of payroll processing.
The department was in charge of processing over 700 entities. The payroll we processed was a combination of corporate and government payroll. It was a sensitive process. We could not afford a single mistake.
When we started offering the service, we only had about 20-30 payroll clients. The process involved the client preparing and sending a payroll file in a physical CD. The CD was delivered three days before the actual payroll run.
As the number of clients grew, I should have questioned the manual process that the department was following. Manually processing payroll for 700 entities is different from processing 30. I had a feeling that the process might blow up one day. However, I decided to rely on the current manual process. I asked my payroll manager about the scalability of the process. He said that it still works.
One payroll day, we got a call from an angry CEO of one of the biggest companies in Saudi Arabia. He accused us of debiting his payroll fund twice. After the CEO investigated, he found out that his 18,000 employees received their payroll TWICE. Yes, twice. Everyone thought that they were given a bonus on that payroll run. We are talking about millions of Saudi Riyals in duplicate payment.
We quickly tried to resolve the issue by debiting their employees’ accounts. We can only do this with employees who had their payroll account with our bank. If the funds were already withdrawn, the system would automatically transfer any income fund to our bank account until the amount was fully recovered.
The problem was with employees with accounts from another bank. We do not have control over their system. The only thing we can do is practically beg the payment operations of the other bank to retrieve our funds.
In the end, it took us a grueling three months to recover 95% of the overdrawn funds. The bank took the hit for the 5%. We needed to pay back our corporate client.
Through this entire ordeal, my direct manager was calm. The priority is to come up with a recovery plan. As we implemented the recovery plan, he talked to me in private. We spoke calmly through the series of events. As expected, I took responsibility for what happened. I decided to trust my payroll manager and stay with the status quo. My British manager highlighted the flaws in the decision-making process and the lessons learned. We also agreed on preventive measures. The incident did not happen again.
The beauty of all this is that my manager did not look at my performance from a single event. He used the event as a learning opportunity to show me how to make better decisions. I respected him more after that incident.
Let me compare that to another event. This friend of mine was slowly rising in his company. He was getting more assignments. However, instead of deciding to push back when the load was too much, he decided to keep accepting them. The challenge was that he was expected to excel in his additional assignments quickly. Years of experience from the previous manager must be rapidly learned in a week or two.
One day, the load was too much, and he made a mistake with two decisions. His direct manager was a very successful entrepreneur that he looked up to. My friend also wished that one day he could be like his manager. He learned a lot from his direct manager with the time he worked with him. He was ever so grateful for everything.
The decision to keep accepting new assignments was flawed. My friend should have requested a gap between appointments to have the time to assimilate the added responsibility. The resulting two erroneous decisions have stripped him of his additional responsibilities. My friend was fine witb the reduction of responsibilities. He understood his limitations. The sad part was that the fault sidelined him. He no longer has a bright future in the company. All the potentiality he previously showed does not matter anymore.
These are two different approaches to processing wrong decisions. Indeed, failure is part of success.
If I may add, a failure correctly processed is part of success. Not only do we learn from it, but we also build others with it.