In the fast-paced world of accounting and finance, mistakes are a part of the job, especially during high-pressure times like tax season or year-end audits.

A 2023 Gartner survey found that 18% of accountants make financial errors daily, with a third making several errors weekly. The real challenge, however, isn’t just the mistake itself – it’s how we respond to it and talk about it.

Whether it’s telling your manager about an error or helping a colleague work through theirs, the way you handle and discuss mistakes has an impact on both the outcome and team dynamics.

Take Ray Dalio, founder of Bridgewater Associates, as an example. In 1982, Dalio made an incorrect prediction about the US economy, nearly bringing his company to ruin. Rather than hiding from the mistake, Dalio took ownership, sought feedback and turned the experience into a valuable lesson that shaped his leadership and helped build the world’s largest hedge fund.

Mistakes are inevitable

Joel Majer, an organisational psychologist and chair of the Institute of Organisational Psychology New Zealand, says that handling mistakes begins with understanding that they are part of being human. 

“We make around two to four errors per hour, even in routine tasks,” he says. “That goes up steeply when we’re trying something new or are under pressure. The nature of tasks, the way we process information and the way we direct our attention all add up to make us error-prone, rather than error-proof.”

Mistakes can happen at all levels – from individual errors to strategic blunders at the leadership level. “For executives and leaders, managing errors well is critical, not only because their errors carry higher consequences but because the way they handle them sets the tone in the organisation,” Majer says.

Kristina Thomas, managing director at KTalent and a member of the Society for Industrial and Organisational Psychology Australia, highlights the growing importance of understanding the environment that contributes to mistakes.

“We’re moving into a world where work is less task-heavy and more about interaction, communication, vision and collaboration. With AI handling many tasks, the focus shifts to how we work together and manage ideas,” Thomas says.

It’s not just about minor technical errors anymore; it’s about strategic decisions and interactions with others, where the stakes are much higher, she explains.

Let’s dive into how to handle being wrong with confidence, whether you’re taking responsibility for your own error or supporting others in learning from theirs. 

Expert advice for individuals

Tip 1: build self-awareness

Before even encountering a mistake, Majer suggests taking time to reflect on your mindset around failure, mistakes and learning. Ask yourself, ‘Do I believe my abilities can be developed through effort?’. 

This introspection is crucial because it shapes how you respond when things go wrong. He says that people generally fall into one of two categories: those with a fixed mindset, who see their abilities as static, and those with a growth mindset, who believe that failing and trying leads to learning and development.

Majer explains, “When you view mistakes as growth opportunities, you’re better equipped to handle them. Without that perspective, defensiveness will get in the way.”

Thomas adds that self-awareness plays a key role in managing mistakes and discussing them with your manager.

“It’s not easy to be fully aware of who you are. Ask your family or friends to describe you. Are you someone who is open about mistakes, or do you tend to be a perfectionist who struggles to accept them?”

Self-awareness can make a huge difference in how you approach mistakes.

Tip 2: communicate effectively

When you make a mistake, Thomas advises against running to your manager in a panic. Instead, approach the situation with composure.

“Rather than saying, ‘I’m so sorry, I’ve made a terrible mistake,’ take a step back and provide your manager with the full context. Explain what happened, why it happened and how it happened. Outline the potential risks and suggest possible solutions, before seeking your manager’s input.”

Majer says when you make a mistake, take a moment to reflect on how you are responding to the situation. He suggests a straightforward method from Amy Edmondson’s book Right Kind of Wrong: The Science of Failing Well – which Edmondson refers to as pause, challenge, choose:

• Pause: take a moment to stop, breathe and calm your nerves, while taking stock of the situation.

• Challenge: ask yourself questions that help you to take a broader perspective. What could this mistake teach you? How might someone else view this situation?

• Choose: decide on the best course of action by asking, ‘What is the most valuable thing I can do right now to help myself, my team or the organisation?’

This method helps you shift from a reactive to a growth-oriented response.

Tip 3: take accountability

In office politics, it can be tempting to shift blame when things go wrong. As Thomas puts it, “Sometimes you don’t like a certain person, so you find reasons to pass the mistake onto them.” But, true leadership isn’t about dodging responsibility; it’s about owning up to errors and steering the team through them. Avoiding accountability or blaming others not only damages your credibility but also undermines your leadership potential.

Think about the titular character from Ted Lasso, whose signature line is, “I appreciate ya”. He consistently takes responsibility for his team’s setbacks, while maintaining a positive outlook. This approach earns him respect and loyalty.

Thomas highlights the importance of acknowledging mistakes: “The last thing you want to do is brush it under the carpet or blame someone else.”

When you openly admit a mistake, provide context and suggest solutions, you demonstrate maturity and a problem-solving mindset.

“Your manager will likely see you as a potential leader because leadership isn’t about never making mistakes, it’s about guiding through difficult times and setting a clear vision for the future.” 

Expert advice for managers

Tip 1: Build trust

When you’re informed of a mistake by a team member, Majer suggests a five-step approach for managers:

1. Acknowledge the person and the emotional challenge of admitting a mistake. Thank them for coming forward, e.g. ‘I appreciate you bringing this up’

2. Manage yourself. Avoid negative reactions like complaining or blame, as it puts the person on the defensive and discourages future transparency.

3. Normalise mistakes as part of work. Share similar experiences to make team members feel comfortable

4. Ask open-ended questions to understand the process and broader context, not just what the individual did wrong. This helps identify issues with systems and processes.

The final step, according to Majer, is to take corrective action.

“If you ask all those questions but don’t change any processes or take disciplinary action when appropriate, people learn there’s no point in sharing this stuff with you,” he explains.

Without follow-through, you lose the opportunity to build trust with your team.

Tip 2: Lead with a culture of openness

According to the Harvard Business Review, during uncertain economic times people often shy away from taking risks at work, which can lead to a reluctance to report mistakes. This is where managers play a big role in creating an environment where mistakes are talked about openly and used as moments of learning.

Thomas suggests adding feedback and reflection sessions to regular team meetings.

“Talking openly about what’s going on, the challenges people are facing, often highlights patterns where mistakes keep happening. It’s not always about an individual’s mistake – it’s more about what’s going on in the environment and systemic issues that might be causing it,” she says.

In 2023, Melanie Selwood, the acting mayor of Adelaide Hills Council, showed great leadership by openly addressing a significant financial mistake. Instead of blaming an individual, the council admitted the error was due to outdated processes and issues in their system from previous years.

“You can’t spot and fix recurring problems if you don’t create a culture where people feel comfortable sharing their mistakes,” Thomas adds.

Majer points out some cultural red flags that can discourage openness around mistakes:

• Strong hierarchies: when the structure is too rigid, people at lower levels might not feel safe speaking up

• Blame culture: focusing on blame drives people to hide their mistakes to protect themselves

• Performance-only culture: unrealistic expectations of perfection stop people from admitting errors.

Building a culture of openness and psychological safety helps teams learn from mistakes and can prevent bigger problems down the road.

Tip 3: Thoughtful escalation

Handling mistakes at work needs a thoughtful approach. Majer points out that having a clear process helps managers tell the difference between serious misconduct and mistakes that are learning opportunities.

“If managers follow a robust process, then it will become evident which mistakes require disciplinary action and which are simply learning opportunities.”

Thomas adds that it’s not just about how big the mistake is, but how often it happens.

“The impact of the error shouldn’t always match the level of performance management needed. It’s more about identifying systematic errors and repeated mistakes with no signs of improvement that need to be escalated,” says Thomas.

Take away

CA Library has Amy Edmondson’s book The Fearless Organization: Creating Psychological Safety in the Workplace for Learning, Innovation, and Growth and Making Real Connections, which she contributed to.