Learning From Mistakes
By Cathy Markowitz

Thomas Edison is reported to have tried more than two thousand different materials in his search of a filament for the light bulb. When none worked satisfactorily, his assistant was said to have complained that all of their efforts had been in vain. Edison's famous reply was: "Oh, we have come a long way, and we have learned a lot. We now that there are two thousand elements which we cannot use to make a working light bulb."

Everyone makes mistakes. Errors happen in business every day. When a mistake is made in the credit department, the credit manager should make sure something positive comes from the experience. To do so, he or she should:

• Address the problem and try to mitigate the impact [the impact on the bottom line, on customer goodwill, on the relationship between credit and sales, etc.]
  
• Determine the root cause and address that underlying problem.
  
• Figure out how to prevent the problem from happening again.
  
• Decide if any policies, procedures, or processes should be changed.
  
• If the error created a problem for a customer, follow up to make sure the customer has been contacted, the problem resolved and that the customer is satisfied with the timeliness of the response and the solution provided.

The most important thing of all to remember about mistakes is the fact that the worst and most costly mistakes are mistakes that are made over and over again. The moral of the story is this: Make it a point to learn from your mistakes.

Cathy Markowitz is...

Reprinted with permission from the ©2002 Covering Credit Newsletter 10/01/02 Edition.
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