Learning From FailureMay 26, 2021
To err is human!
Making mistakes is a fundamental part of every cognitive process – be it selecting a direction at a fork point on a highway or making important decisions like tying the marital knot.
We all make mistakes. And, all kinds of mistakes.
Mistake due to lack of knowledge: this is a one-time kind of event, at least for the same mistake.
Mistake due to temptation: this one occurs despite having the required knowledge and/or outcome as the temptation to do the wrong thing takes over the logic - worse, it may be a repeat event.
Mistake due to circumstances: this kind of mistake may have no relevance to absence of knowledge or presence of temptation.
Some mistakes result in failure, while others have no significance in our lives. Learning from mistakes is probably the most familiar form of learning for every human being.
We have written in the recent past about the most common mistakes investors make when investing. Here we are highlighting some of the pointers as to how mistakes can be used to learn and develop.
Pointers to deal with mistakes and learn from them
- Acknowledge your mistakes
In order to learn from your mistake, and have a closure on any resultant fallout, the first thing you have to do is own up to your mistake. A half-baked acceptance or shirking from the responsibility of your actions will not take you far. It can sometimes be very hard to accept our own mistakes. But the acceptance of your mistake is the basic foundation of learning from mistakes. Without this much-needed acknowledgment, you will not be able to build a strong mental state to bravely face the consequences of your actions.
- Discipline yourself not to repeat the same mistake
Have you heard yourself saying, “I shall never do it again”, only to see yourself doing the exact same thing again? If yes, you are not alone. It is likely all of us have repeated some of our mistakes at one point or another. Repeating the same mistake many times over turns it into a habit, and becomes a little more difficult to correct.
- Turn your mistake into an opportunity to learn and develop
The good news is that you can learn valuable lessons for the future from the mistakes of the past. The stink of past mistakes can be turned into a fresh leaf and encourage you to make better judgement of, and smarter decisions in, similar situations in the future. As we learn something new every day of our lives, our mistakes are an important source of lessons to make us smarter, more confident, and more prudent in the decision making process in the future.
- Introspect to identify the cause of the mistake
A reflection of your action will help you identify the basis of your mistake, a possible better alternative actions, and valuable wisdom for the future. A detailed analysis of what went wrong, what made you commit the mistake, and what could have been done to avoid it, or how you could have contained the damage are all part of the exercise that will deter you from making the same mistake again.
- Make a roadmap
Prepare a list of reasons why you do not want to end up making the same mistake again. John Doe, for instance, has a roving eye and keeps falling for every other female who comes in his contact. After a disastrous two dozen romantic encounters, and subsequent break ups, he was advised to reflect on his actions. As a result, he was able to identify the reasons for his heart breaks such as he was too impulsive, rapid approaches were turning relationships toxic, there was no maturity etc. Now, John knows what can be done to avoid a recurrence of the same mistake. He has learnt which dirt road to avoid and how to stay on course on the main road to reach your destination of better decisions in life, be it personal, professional, or social. It is best to make a detailed plan that will help you avoid the future mishaps by not repeating the past mistakes.
- Take concrete steps to ensure zero slippage
While will power and discipline are the most important aspects of avoiding repetition of mistakes, practical measures complement these two. For instance, let us assume Jane Doe is a compulsive online trader dabbling in short term trading in commodities, forex, or derivatives. We all very well know how the volatility can magnify the margin-based trading in such speculative assets. It is, therefore, best in her interest that Jane switches from online trading to a regular mode of trading. Further she should switch from these highly risky trades to equities and bonds. A maximum daily or one-time limit of cash deployment will serve as an extra layer of security. Best yet, Jane can consult a financial expert, and then invest instead of hitting that impulse button.
Every time we make a mistake, we try to modify our knowledge about the world in order to avoid suffering again in the future for the same reason. However, human learning is something very complex and still poorly understood, and therefore, it is hard to say which are the mechanisms triggered by the detection of a mistake. Making mistakes allows you to learn to recognize your inherent weaknesses and vulnerabilities that need serious action for modification for your better future.
We can, therefore, safely say that when you shift your mindset, it allows you to understand that there are actually no mistakes, only lessons and learning opportunities. A clear understanding and strong resolution can give you a stronger mental and emotional health to minimize the possibility of making mistakes in the future.
In the financial sphere of your life a number of mistakes can happen such as wrong asset allocation, asset class, entry, exit, or lack of diversification, and absence of succession planning. You will certainly be able to make better and safer decisions if you care to learn from your mistakes.
In the journey of life, we can all achieve our goals but we have to stumble a few times to get there. Try treating interim failures as learning curves for long term successes. If you are discouraged by mistakes, think instead: they can change your life, for the better. Fear of failing leads to inaction, which is a failure in itself.
“Anyone who has never made a mistake has never tried anything new.” – Albert Einstein
- Ramesh Sadhwani
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