Image: Richard Fuld Jr.
Shawn Thew  /  EPA file
Lehman Bros. CEO Richard Fuld testifies before a House panel Oct. 6. Fuld blamed Lehman's failure on everything from short selling to the government.
By Eve Tahmincioglu
msnbc.com contributor
updated 10/20/2008 8:06:15 AM ET 2008-10-20T12:06:15

If the captain of the Titanic had not gone down with the ship, would he have blamed the iceberg for the disaster?

Probably not.

It would have been considered “dishonorable” for a longtime veteran of the sea like Capt. Edward John Smith to abdicate blame, says Carol Tavris, a social psychologist and co-author of “Mistakes Were Made (But Not by Me): Why We Justify Foolish Beliefs, Bad Decisions, and Hurtful Acts.”

But today, she adds, accepting responsibility for our mistakes has become passé in politics, finance and the workplace in general.

Just look at the financial sector’s collapse. Few have lined up to take the fall for Wall Street’s fall.

Richard Fuld, a veteran of 158-year-old Lehman Bros., was CEO when the company collapsed in spectacular fashion last month. He testified before Congress recently and blamed the implosion on everything from short selling to the government. He maintained that his decisions and actions as the leader of the firm “were both prudent and appropriate.”

It got me thinking about what a CEO, or even a rank-and-file employee for that matter, really gains by admitting a mistake and taking the blame.

Should you fess up or deny?
On the surface, it seems Fuld has little to lose, since he is walking away with nearly $500 million in compensation earned during his tenure at the company.

That said, there could be a hidden cost to admitting any error.

“What do we think of CEOs hiding from responsibility?” asks Angie Morgan, co-author of “Leading From the Front: No-Excuse Leadership Tactics for Women.”

"Their personal integrity has gone away," she said. "Respect is the ultimate reward you can get as a leader.”

In general, does it help or hinder a career to admit mistakes and take the blame? Should you fess up — or deny, deny, deny?

There is no easy answer to these questions, experts say. It all depends on a number of factors:

  • The gravity of the mistake you made.
  • How you approach fixing or resolving the mistake.
  • And most importantly, how understanding your managers are when it comes to screw ups.

When Morgan was an officer in the Marine Corps deployed in Australia, she made some mistakes.

On one occasion, she sent two Marines under her command into the Outback without radios or any communications tools. When they didn’t return that evening, she realized their lives could be on the line.

She immediately told her commanding officer her mistake.

“He then relayed the news via radio to units in the Outback, trying to locate the last unit that came in contact with my Marines. He utilized his communication channels to get a sense of where they were last seen, which allowed him to send out Humvees in those areas to try and locate them,” she recalls. “His actions were immediate.”

After the Marines were found, she adds, she and her commanding officer “discussed my role in the situation and what I should have done to ensure that the situation never had occurred in the first place.”

Morgan learned a valuable lesson.

“When you acknowledge mistakes, you can start looking for solutions,” says Morgan.

Lin Grensing-Pophal, an HR management expert, recalls one of her past employees who made a big blunder.

The employee, a copywriter, worked on a major direct-mail initiative for Grensing-Pophal that involved more than 250,000 mailers to promote a bankruptcy book to lawyers.

“I was sitting in my office one day when she came in with a copy of the brochure and announced: ‘I’ve made a very big mistake.’ She then proceeded to tell me that instead of listing the book price as $265.00 it was printed as $26.50.”

But the employee already had an action plan. “She had looked into a couple of alternatives for correcting the error. We could reprint at a cost of X, or she had found a service that would affix stickers over the price to correct at a cost of X. She offered to have the cost of correcting the error taken out of her salary,” she explains, adding that the company did not dock her pay.

Three things that impressed Grensing-Pophal:

  • "She immediately came to me to admit her mistake.”
  • "In reality, this mistake was owned by several people. She was the copywriter, but the proofing process we had in place involved the product manager as well as a proofreader. She didn’t even bring them into the picture — she took full responsibility.”
  • "She came in with a solution in hand. She didn’t just dump the problem on me.”

“Since then, I’ve tried to use this same approach whenever I make a mistake,” she says. “Mistakes, in my opinion, are not opportunities to chastise or place blame, they’re opportunities to learn and improve.”

Learning from a mistake
That’s something children are supposedly taught from a young age — how it’s important to learn from your mistakes. But alas, what they learn from how adults deal with bungles tells them a different story, says “Mistakes” author Tavris.

"They learn early on that making mistakes means you are stupid or incompetent," Tavris says.

That is the wrong approach, she says. “People who are able to admit mistakes don’t see those mistakes as a reflection on their own character and ability,” she says.

The ability to admit a mistake may also depend on your own conscience, adds Paul Facella, CEO of consulting firm Inside Management.

“I think it depends on your own tolerance. If you can live with yourself and sleep at night knowing you made a mistake, more power to you,” he says. “I would be waiting every day with bated breath wondering when the ax was going to fall.”

Facella, who is also the author of “Everything I Know About Business I Learned at McDonald's,” says he was lucky enough to work in an environment as an executive at the fast-food chain that made employees “comfortable” about admitting mistakes.

“In most situations, if people are honest and explain what they did, and it had no true malicious intent, then most organizations will acquiesce and like that,” he says.

It’s all about weighing the consequences. “You can’t be stupid about this,” he advises. “If it was an honest mistake and your appetite for holding something like that back is not strong, I would go with your gut, pick a time and place, and explain it to your managers.”

Tony Simons, author of “The Integrity Dividend,” says it’s generally wiser to accept collective blame. “If you can get everyone around the table to say, ‘We all screwed up,’ that’s really nice,” he says. “In most big organizational foul-ups, there are lots of people that fouled up.”

Legal implications
Part of the issue today when it comes to accepting blame, he continues, is the legal implication of doing so, which could mean everything from a loss of bonuses or even jail time.

However, Tavris believes the fear that you’ll be fired or derail your whole career for telling the truth is overblown.

“If you are a good employee, hard-working and care about the quality of your work, and make a rare mistake, then I think admitting it is the best thing to do,” she says, so long as you offer corrective measures when you disclose the fumble.

And accepting blame may actually help your career.

“People like working for someone they can trust,” says Simons. “And if you have an employee who tells you they screwed up, then you know you can trust them.”

There’s a payoff on both sides, he says. But, he stresses, “It’s naïve to say telling the truth will always serve you well. You have to be able to read if those around you, and the company you work for, are worthy of the truth.”

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