We know about “ROI,” and “ROL” …Maybe we need to focus on “ROM – Return on Mistakes” (Reflecting on Chipotle’s Latest Travails)


Time for a new “Return on…” consideration.

Great-By-ChoiceThe traditional one, of course, is “ROI – Return on Investment.” And Jim Collins wrote about our “ROL – Return on Luck” in his book Great by Choice. From the book:

Luck happens, a lot, both good luck and bad luck. Every company in our research experienced significant luck events in our era of analysis. Yet the 10X cases were not generally luckier than the comparison cases.
The critical question is not “Are you lucky?” but “Do you get a high return on luck?”

Well, maybe it is time for a new “Return on” category – “ROM, Return on Mistakes.”

Lets’ start here:  you will make mistakes. And your company will make mistakes. This is…inevitable.

No one will hold it against you that you have made a mistake– at least, they should not hold it against you. The questions are:

#1 – Did you ignore warnings that the mistake was on its’ way? If so, that may be a bigger mistake than the mistake itself.

#2 – And, after the mistake, did you learn anything from it; did you learn enough to actually change things so that such mistakes would not be repeated?

In other words, if you respond quickly, honestly, wisely; if you correct it; if you are honest with the public (your customers) and you genuinely correct the mistake, and genuinely guard against such future mistakes, then you have a chance for a high “ROM – Return on Mistakes.”

ChipotleI thought of all this as I read about the current travails of Chipotle. They have been hit with some pretty serious food safety/health problems, and they have lost customers and value. In other words, this has been a big, serious, costly mistake.

Here are the words of their CEO (from Business Insider)

Chipotle founder and co-Chief Executive Officer Steve Ells on Thursday apologized to patrons who fell ill after eating at the company’s restaurants, pledging that sweeping new food safety practices will prevent such outbreaks in the future.

“This was a very unfortunate incident and I’m deeply sorry that this happened, but the procedures we’re putting in place today are so above industry norms that we are going to be the safest place to eat,” Ells said in an interview on NBC’s “Today” program.

But, as you read through the stories about this current problem, it turns out that food safety experts had been warning about Chipotle’s practices. Thus, failure #1 – not heeding warnings.

(One of the biggest “warners” were the food safety experts at “barfgblog: safe food from farm to fork.” Read this article from their blog: Powell and Chipotle: My job is to make it microbiologically safe. Then you can add the adjectives).

As regards to #2, the CEO’s statement that “the procedures we’re putting in place today are so above industry norms that we are going to be the safest place to eat” seems a little too late. And the statement makes us wonder were they happy just meeting the bare minimum industry standards all along – not a confidence building approach! Can they regain credibility and trust? We’ll see.

(Disclosure – I have been a fan of Chipotle. But I’m not sure I’ll be eating at my local Chipotle anytime soon).

But, here’s the real issue: how do you handle mistakes?

Do you heed warnings? If not, start.

And, do you fix your mistakes? If not… well, you likely will have a pretty low ROM.

 

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