What To Do When Your Team Costs You Money

In today’s episode, you’re going to discover how to respond when someone on your team makes a mistake that costs a client of yours money. Welcome to the Eric Dingler Leadership Podcast, a show designed to help you lead better to live better.

So this last week, I’ve had two different questions come up in conversations that I was having with some business owners that I work with. During our coaching calls, one of them asked the question. They said, how do you make sure when you give someone on your team a specific task, let’s say you tell them that next Tuesday at eleven o’clock, this thing has to happen, how do you remember to check and make sure that it does happen? And then later in the week, I was having a conversation with another group of people in a group setting, and a leader in there asked, “I am really afraid that if I hire someone to help with the Google ads that we do for clients, that they’re going to make a mistake that ends up costing the client hundreds or thousands of dollars in unapproved ad spend. How can I possibly hire people and give them that kind of access without having any type of exposure to that kind of risk?”

Now the thing is this, both of these questions come from the same place, and that is a place of fear. And fear, you all know, is spelled F E A R, and to me, fear stands for false evidence appearing real. There’s no evidence that the person you give something to isn’t going to do it next week at eleven. And for the other person, there’s no evidence that the person is going to go in and make a mistake. They’re afraid this is going to happen. It really is rooted in something that a lot of leaders struggle with, especially young business owners, new business owners, founders that have started something and built it up and it’s gotten to the point where they need help, but they struggle giving up control. And because of that, they’re held back from their full potential. They’re not reaching their best opportunities. They’re not going to be able to grow. They’re not going to be able to move beyond the place they are, because as I have often said on the podcast, your leadership capacity is the capacity of your business.

So what I really want to talk about in today’s episode is, how do we overcome this fear? What is the mindset that helps us move beyond that? What are some of the leadership skills it takes to move forward confidently, knowing that one, you’ve lessened the likelihood of a mistake, but two, you’re equipped to handle a mistake when it does come up.

You see, this week, we also just happened to have one of these kinds of mistakes in my agency. One of our team members was working on a website, and somehow in the process of updating this website, a setting got turned on that allowed any orders coming in over ninety nine dollars to not be charged shipping and handling. Now, actually, the team member did this work about three weeks ago, and the next day our client went on a two week vacation. And when they got back from vacation, on Monday of this week, they opened up their email and started processing these orders and discovered that eighteen orders were over ninety nine dollars and none of them were charged shipping and handling.

Wow, that is a big mistake. So, as you can imagine, I immediately fired the tech support person and reached out to our customer and told them we’re sorry, I fired the person responsible, it’s never going to happen again. And of course, I’m lying. I didn’t do that at all. I’m not going to fire someone because they made a mistake. People make mistakes. I make mistakes. In fact, in this scenario that happened to us, I made a mistake, and I’m going to tell you what that mistake was here in just a few minutes.

But first, how did I respond? I didn’t overreact, because one of the things that we do, one of my values, and in fact the very first policy in our policy manual, we have a small policy manual, and the very first policy is the no policy policy. Now, I’ve had the no policy policy at the top of my policy manual in my digital marketing agency, my coaching business, the church that we planted and led, it’s still at the top of that church’s policy manual, the summer camp I used to run. I’ve had this as my number one policy in any policy manual I’ve put together for probably twenty years.

And the no policy policy simply says this. We don’t create a policy just because something happens once. If you’re constantly responding to things with, oh, we need a policy in place for this, you’re going to end up with these long documents that nobody reads, that nobody understands. But eventually, at some point randomly in the future, somebody’s going to do something, and it’s going to click a light bulb in you or someone on your team, and you’re going to go, oh, we have a policy about this. Now, I’m not saying you don’t need policy. You need policies for recurring decisions that are going to have to be made so people know how to make decisions. We have a policy on personal time off. We have a policy on pay raises. We have a policy on how we manage usernames and passwords for ourselves, and a different policy for how we manage them for clients. So we have policies, but our number one policy is the no policy policy. We don’t overreact. And in this situation, I wasn’t going to create a new policy, and I most definitely wasn’t going to fire someone.

Yes, we ended up having to reimburse our client for all of those shipping charges. In the grand scheme of things, it wasn’t a whole lot of money. It was one month of the client’s contract with us. So we’re out one month of twelve payments for this year. This has been a client that’s been with us for ten years, so this is literally less than a percent, probably not even half a percent, maybe even zero point one percent of the total lifetime value of this client to us. So in the big picture, it wasn’t that big of a deal.

Also in the big picture, I see this as an investment into this specific team member’s training. I just invested in their training. I’ve made them a more valuable team member specifically to this dollar amount, because they are not going to make this mistake again. Because, you see, they felt terrible. They were so remorseful. They didn’t try to hide it. They immediately came forward and took the responsibility, and even immediately said, please take it out of my paycheck.

You see, we talk to our team all the time about the fact that we can get through anything as long as we’re honest. I cannot help you, I cannot defend you, I cannot support you if you lie or try to hide something. But if you’re honest, I’m always going to be in your corner. And so I told this person, I said, listen, you’re not in trouble, I’m not going to make you pay for this. Because you know what, this isn’t a people problem. You didn’t make this mistake because your character is questionable. You didn’t make this mistake because you’re not a good, decent person. You made this mistake because you’re a human being. You didn’t make a mistake, our system failed you. Our system failed us. Our system failed our client, because we never had a system in place to address this.

Well, guess what, my friends? Now we’ve got the system. We’ve made a tweak to our system. As it relates to this specific type of issue, this is an issue of risk management. If you’re going to run a business, you’re exposing yourself to risk, and risk management is part of what you’re eventually going to have to do.

There are three different ways to handle risk. I’m not going to go into these in detail, this isn’t the point of this episode, but as a side note, if you have more questions about this, let me know and I can do a whole episode on it. The first way to handle risk is to eliminate it. We could say, we’re never managing e-commerce websites again, we’re not doing that. Yesterday, I was talking to another web designer who built a website for a customer of ours, a new client where we’re providing fractional CMO services. We needed access to go into the website to create some landing pages, and this web designer thinks he’s a big deal and didn’t want to do that. He thought we were trying to step on his toes. And I don’t want to take on this guy who’s a great web designer who built a wonderful site. So we were talking, and I asked him, hey, by the way, do you do anything as it relates to accessibility? And he said, oh, no, no, no, and then gave me his curriculum vitae on how big and important and all wise and knowing he is on accessibility, and how he served on a special task force for the governor during Covid on website accessibility. Okay, whatever, that wasn’t my question. My question was, does your web design business do websites with accessibility? And he said, no, too many people started coming back and suing their web designers, so it’s too big of a risk, I don’t do it because of the legal exposure. Okay, that’s totally fine, that’s how he’s handled that risk exposure. My web design agency, we do accessibility projects all the time. We’re all about accessibility. We believe that digital content should be accessible to everyone regardless of disability or ability. That’s what we do, it’s a heartbeat of our web design agency. So we didn’t eliminate that risk, because that’s one way to handle it, but I’m not going to do it that way.

The second way to deal with risk is you reduce the exposure. This is how we handle accessibility. We have a pretty tight and sophisticated contract that people sign, we have hold harmless statements, and we go over the fact that we’re providing advisement and some services, but it’s ultimately up to certain parties as it relates to legal things. Plus, I carry liability insurance for the company, because I’ve reduced our risk. The main way to reduce risk, though, is systems. You have to have good systems, checklists, quality control, training. So we reduce the risk by continuously training our team.

The third way, we also transfer the risk by having insurance. And with the contract, I spoke out of turn when I said we use our contract to reduce risk, the contract transfers the risk. So three ways to deal with risk: eliminate the risk, reduce the risk, or transfer the risk. In most situations, you’re going to do a combination of two and three together, you’re going to reduce it and transfer it. Sometimes you can just straight up transfer the risk and not assume it.

Anyway, back to our scenario with the client we messed up, and it cost them shipping and handling, we had to reimburse them for that. What we’ve done is we’ve adjusted our system. Now, when we work on any of our client’s websites and it’s e-commerce related, we have a new email statement that goes out to them that says, hey, we’ve completed the work, it is now on you to log in to your website and verify that all the settings around shipping, order handling, and taxes are still exactly as you want them, because from time to time settings can be accidentally changed or unintentionally altered through software or code changes to the website, and we are not responsible for this. So we just have a new disclaimer statement, and it’s going to go out every time. Now, when our support team gets to the end of a ticket, there’s a checkbox, and the checkbox is a branch. Was this a website with e-commerce on it? No, send this email. Was it a website with e-commerce on it? Yes, send this email. Boom, that’s it. We’ve updated the system. It was a system issue, it was not a person issue.

Now, I know right now you may be thinking, but Eric, come on, let’s be real, there are people out there that make mistakes, there are bad employees. Yes, there are, and if they’re on your team, the system you’re using to recruit and onboard new employees is broken. You have a bad hiring system. So don’t blame the person. There are people in the world that you do not want on your team. There are all kinds of people that I know that I’m like, oh my gosh, I would never hire them, I would never want them on my team. Because we’re digital nomads, I get a lot of things on social media about being a digital nomad. Once a week or so, somebody will ask the question in a private Facebook group, how do I use a VPN to hide my location from my employer, I just got a new job, we’re not allowed to work remotely outside of the country but I want to travel, so how do I hide it? Okay, this is a human being with low character that I would never want on my team, because they are dishonest, they are selfish, and they need to grow up, they’re very immature. Now, I don’t think they’re destined for that, I think there’s hope for them, but my company, we don’t hire ministry, that’s not what we’re in the business of doing. I would never hire them, but if they wanted coaching, if they wanted to grow as a person, I would definitely work with them, I would want to help them get better. But I don’t want somebody on my team that wants to try to hide something.

So we work really diligently through our interviewing process, and we have some things in place that we do specifically to identify the type of character someone has, because you’re going to want to avoid having bad people on your team. But once somebody has been on your team for a while, this tech guy that’s been on our team for over two years, this is the first time he’s ever made a mistake like this. It wasn’t him. It was our system.

Now, like I said, I made a mistake, and part of this I did not handle right, but that’s being human. I make mistakes, my team makes mistakes. I’m covered by grace, so why would I not turn around and extend grace to my team? Of course I’m going to. There are times I need my team to extend grace to me, and so we always show it to our team.

Now, before I share the mistake I made, I want to read this to you. I made a video specifically to tell the team member to encourage them, to let them know that we value them, that we are not holding them accountable, they’re not going to see this come out of their paycheck, that we are so not mad, it is all good. And I sent it to them and I sent it to their leader, because this is not a direct report of mine that made this mistake, he reports to one of my leaders, who is my direct report. And I got this reply back from Peter, our director of web services. Peter said, “I spoke with him about this in today’s weekly meeting, told him not to worry and that you are going to react exactly how you did, and this is one of the reasons you’re an awesome boss slash leader. Told him the important part is to find why this happened and prevent it from happening again.” He then explained the solution he and this member of our tech team worked together to come up with. And then Peter finished the message to me with this, he said, “Thank you for the kind video to him.”

You see, I worked through my leadership team, but I also just immediately reached out to this team member directly. But I didn’t have to reach out to him. I have a leader that does that, and the leader did exactly that. And this leader knows our culture so well, knows our company so well, that he said, I told him not to worry and that you’re going to react exactly how you did. This conversation happened before I ever talked to Peter. Peter saw what was happening, and he stepped in as a leader and started taking care of it. I wasn’t worried, I knew this is how things were going to go. This is what happens when you focus on culture. This is what happens when you trust your team, when you empower your team, when you work to be consistent in how you respond to things, your team begins to anticipate. I was so moved when I read Peter’s words, told him not to worry, you are going to react exactly how you did. Man, that was a moment for me where I was like, yes, I’m crushing this leadership thing, I am dang good.

But I also made a big mistake. I made a mistake out of fear. And here’s what happened. When I first became aware of this situation, I became aware because I saw the email thread between our client and our tech support person, because our client reached out to the tech team as they should have when they got back from vacation, and they listed all eighteen invoices. They carbon copied me on that, and that’s fine, sometimes that happens. I read it and I immediately thought, and I even think I said something to my wife, I was like, oh, we’re probably going to have to reimburse this guy. And I immediately did the math and knew the number. I began responding to my team, but Peter had already stepped in and was responding, and things were great, and they did a good job coming up with the system. I helped tweak it, I spoke into it. There were some things in the email, one of our tech team, most of them English is a second language to them, and they’re using AI now to help. They can all speak English, but we use AI, and they’re required to write a reply, use AI to edit it, and then send that. But we keep the reply they wrote on the ticket, because I want to see their original work, I don’t want AI coming up with responses, I want to see the original work of my team. And I looked at that and I was like, ooh, there’s a couple of things we could have said better, that maybe wouldn’t have opened us up, because the way he said it really kind of made it look like it was our fault, when we really don’t know. We don’t know exactly how this happened. I can’t imagine a scenario where this team person would have had to go into this one area and click this setting. There’s a good chance it didn’t happen by him changing a setting. Regardless, it happened, and since I don’t know, and my gut told me and I ignored my gut because of fear, I should have immediately replied to the client and said, I just want to let you know I just saw what’s happening, I’m looking into this, and if it was our fault, I want you to know that we will be reimbursing you for this, please give me a day or two to look at the logs and get through everything and talk to my team, and I’ll follow up.

But I didn’t do that. I thought, I’m just going to keep my mouth shut, hopefully he won’t say anything. That was being a coward. That was cowardly leadership. I was afraid, I put money over doing what was right in that moment. That is a coward’s way to handle it. Now, I don’t think I’m overall a coward, but that was a cowardly move, that was a bad leadership move. Because eventually, a couple days later, the client emailed me and said, Eric, this cost us this, what are the chances of you refunding this to us? And I didn’t reply. At that point I thought, I’ve got to stop handling this the wrong way, I need to step up and handle this the right way. And I picked up the phone and called him. Well, I waited a couple hours because I’m in London, and in England during the United States, it was two o’clock in the morning their time when I read that. So I waited till a decent hour for them, and I called them and said, hey, listen, without a doubt, we are going to reimburse this, I’m really sorry it happened. I do want you to know, though, I’m not reimbursing this because I’m saying that this tech person did this, I don’t want you to think they’re incompetent. It was a system, we should have had a checks and balance, we should have asked you to double check the settings. It was one hundred percent, we dropped the ball. Whether the setting was changed by us or whether we failed to double check things, we dropped the ball.

One of the things that my team and I talked about after this, we’re considering, we haven’t decided to do it for sure, but Peter and the team are going to test it. We’re thinking about having our team, after they make edits on a website that has a bunch of complicated settings like this, take a video or more likely screenshots, opening the page, taking a screenshot, opening the next page of settings, taking a screenshot, and throwing those into AI and saying, is anything here changed from the last time? What I think we’re going to do is go in and train the AI on these are the settings for this client, remember these, and then go in every time we do a ticket and say, was anything here accidentally changed? I’m not sure we’re going to do that, that’s a systems thing we’re still playing out.

But the point is, the point is this, as a leader, I led my team well, but I led myself poorly. I struggle with fear. We all do. You are going to struggle as a leader with self-doubt and fear, and that’s good. It’s in those moments that you need to identify and get better, like I’m working on responding and adjusting to, that leadership isn’t about getting it right, leadership is about making adjustments.

So for you, for me, give yourself grace, you’re going to make mistakes. Give your team grace, they’re going to make mistakes. The key is to learn from it. One of the things that we talk about is sometimes we win, sometimes we learn. In this situation, it was a mix of both. We won because we had established a reputation with our team that we weren’t going to blame the team for a single mistake, we weren’t going to make them pay, we were going to take care of it. I told him not to worry and you are going to react exactly as you did. So we won in that regard, our culture went first. The culture of our company was so strong and so powerful that it went first, before I ever stepped in, before I ever had a conversation, our culture was there. That was a win. Reassuring our team member, letting them know it’s not on them, but then coming in and saying, now let’s work together to adjust this system, that was a win. Focusing on fixing the system, not trying to fix a person, that was the win. Having people with high character on our team, that was a win. Me chickening out, not emailing the client the first moment, that was a learn. Our system being broken and needing fixed, that was a learn.

So in this entire scenario, we’ve learned some things and we’ve celebrated some wins. This is what leadership really looks like in the real world on a day in, day out basis. This is leadership. You see, big results don’t come from one big moment. That result, our leader being able to say, don’t worry, I know how Eric’s going to respond, that type of result doesn’t come from one big moment. Big results come from doing the right things over and over again until the compound effect kicks in. That’s the secret of every great leader.

Now, if you want to stay consistent and keep your team moving in the right direction, I’ve put together a resource called Five Leadership Lessons to keep you and your team on track. They’re simple, practical truths that you can use this week to lead with focus, even if you’re a team of one. You can lead yourself better, because your leadership capacity is the capacity of your business. I want you to grab your copy today, I think it will without a doubt impact the way you lead. Go to EricDingler.com and scroll down till you see the Five Leadership Lessons button and click on it, and you’re going to get access to this guide, the Five Leadership Lessons to Keep You and Your Team on Track.

So what’s this week’s leadership tip of the week? I want to sum it up in a leadership tip. But before I share that, if you got anything out of this, if our learns and our wins inspired you, if you listened to this and thought, man, that is leadership, that is good, if you’ve picked up anything from today’s episode, I’m asking you to leave a review, make sure you’re subscribed, if you’re on Spotify, leave a comment. I’m on a mission to help people lead better, to live better, and one of my main tools of choice is this podcast, and you are the only strategy I’ve got in place, really, to help this podcast be found by more people. I need you to do your part. I’ll keep showing up every week and doing my part, sharing leadership nuggets and stories from the trenches, trying to help you grow as a leader. But I need you to do your part, and your part is to leave a review, subscribe, comment, and then take action. You’ve got to take action, don’t let this just be something you’ve heard, take action on it.

So what’s this week’s leadership nugget of the week? Leaders fix systems before they fault people. Leaders fix systems before they fault people. That is leadership gold, that’s a golden nugget of leadership right there. Write that down, read it every day until it becomes part of your leadership DNA. Leaders fix systems before they fault people.

Well, my friend, until next time, pick one thing to take action on to help you lead better, to live better.