Prevention may be better than cure – but what should you do when mistakes happen in your merchant business?
“Take chances, make mistakes. That’s how you grow.” Mary Tyler Moore
The news is full of examples of things going wrong, on many different scales. Whether you’re a politician, a weather reporter or a business leader though, how you handle things when mistakes come to light really matters.
It’s important to recognise at this point that we are not comparing business with the behaviour of anyone who may have been in the headlines recently. We are talking about genuine mistakes and mishaps that can happen to anyone, in any business; how to prevent them, ideally, but also how to manage them when they happen.
First up, it’s vital to be able to establish facts so you can understand how a mistake happened in the first place..
Just the facts, ma’am
If something goes wrong in an order, delivery or other process at work, it’s important to find out what happened and why so that the relevant action can be taken to rectify it.
That’s not about assigning blame or getting opinions, mitigating circumstances or different defensive versions of the event. It’s about establishing facts – and your ERP software / order and stock management system should be a really valuable tool for that.
If every interaction with customers and suppliers is recorded in the system, it’s really easy to identify where things went wrong. A typo on a price here, a missing decimal point there, an incorrect email address or a confirmation button not pressed can all escalate into big issues with customers.
Your system should be keeping track of things like different versions of quotes, final agreed pricing, negotiation discussions, product specifications, milling and processing instructions, delivery notes, product certification, invoicing and much, much more. There should therefore always be a simple audit trail available to establish what was agreed at what point, by whom. That makes getting to the bottom of an error much easier and much quicker.
The best solution is always prevention
There are plenty of safety nets your order and stock management system can have in place to help avoid mistakes in the first place. Credit control limits, margin protection, perpetual stock-take capability and many more can be put in place, with alerts set up to flag the issues and ensure nothing is missed.
Having clear and up to date visibility on all the key metrics for your area of the business is critical, so you can nip issues in the bud and see where the problems are before they escalate.
But with the best will in the world, mistakes can still happen. So here are 5 steps for handling errors – and perhaps motivating your workforce and customers at the same time.
5 ways to handle mistakes in your merchant business
Don’t evade. If a mistake was made, be honest about it, apologise, and take steps to make things better.
Identify how the mistake happened. You can’t prevent a situation from happening again without understanding how it happened in the first place. The critical part here is to avoid blame – this is information finding, not judgement day.
Take action to prevent similar mistakes happening in future. Human error? Find a way to put checks in place to minimise that risk in future. Process error? How can that process be changed to flag issues or to include an additional step to double check it? Software error? Work with your supplier to address the issue and find a fix or safety net for the future.
Communicate what you have done. This one’s really important, especially when a third party (customer, supplier etc) is involved, as they will want to know what action has happened.
Reassure those involved. When a mistake has happened, there is little point in blaming and shaming anyone. Owning up honestly to failure or error is not easy for anyone, and it’s important that every member of the workforce feels safe to say what happened, honestly and without undue fear or anxiety. While that responsibility will often sit with the people in charge, it’s just as important for colleagues and peers to recognise that mistakes do happen – it’s how you handle them that makes the difference. None of us is immune to making mistakes, and working in an environment where honesty and courage to speak up are celebrated is enormously motivating.
"We learn from failure, not from success." Bram Stoker
No-one is infallible, and no system is perfect. Equipping your business with the right tools to help stay on track, see what’s happening and be alerted to risk is vital – alongside an understanding culture which celebrates honesty and intention, and accepts that error is an inescapable part of growth.
