Make Mistakes. Learn from Them

This is an article about vision and culture in management.

I’ve been working for the whole last week with 3 colleagues of mine from the SNSPA master in HR for a team project in constructing a memory skill test for the psycho-diagnosis discipline. I had to confront (again), with success, I might add, the same Romanian mentality which says, “if the results aren’t a performance, nobody must know it”. But, again, it’s the cultural issue with Romanians, not having the ability to publicly recognize the failures.
Last week, Money Express published a well-written cover story about the leaving of Catalin Ionescu from the managerial position of CODECS, the best-known and most important school of management for specialists in Romania. The company invested in building the new center from Agricultori nr. 37, and now they have to pay more than 600.000 euros and have liquidity problems.

I would like to point out the aspect that Adrian Stanciu mentioned: Catalin Ionescu’s courage to recognize his mistakes as a manager and publicly assume the disaster for the company that was the standout model in Romanian management for more than 15 years.
During the same week, a prominent public success was announced. Emi Gal, manager of Brainient, a young but experienced entrepreneur, has won a  project financing at Seed Camp. Dragos Stanca wrote a brief and concise article on conclusions based on Emi’s experience. One of the things he insists on is that Emi had many failures that burned down fast.
Radu Georgescu asks whether the fall of CODECS was the beginning of Romania’s crisis.

I think it is important to remember, especially to those who KNOW THIS, that the crisis has a psychological and an economic component. Let us not burn down the whole market just because one big business might fall. Officially, the company is NOT in bankruptcy. But there’s another idea which I would like to underline. One of the reasons the financial market collapsed was the amplification of the economic effect at a psychological level, as George Soros pointed out in his 2008 book on the subprime bubble. That means that after the prices went down, they kept falling. I remember my broker telling me last year in September that there were companies at BVB that, if sold, would make more money than summing the actual share price. The value of the SIFs was almost half their real economic accounted value on the transactional financial market. As I tried to understand and figure out rules out of losing money rapidly, the one rule that the market, also predicted by his observations, went down in Romania when it went down in the US and stagnated when there were promising signs in the US. It all became a PSYCHOLOGICAL EFFECT. It had nothing to do with actual figures, but the impact of the investors’ expectations on the virtual market was dramatic.
Back to what my colleagues were saying while we were working on the project: “couldn’t we just play with the figures in such a manner that they turn out right?”, actually asking: “couldn’t we just PRETEND we’re doing this exercise and learning something from it while not actually risking anything?”. Well, the business people that are ashamed of their failures or point the finger at those who have failed (“oh, my, the management school went broke, what does THAT say about management?”) fall into the trap that Iuliana Stan from Human Synergistics was underlining in her article on the death of Raluca Stroescu. The psychological tendency is to strive for performance, paint over the ugly sides, and show off an image of success that has NOTHING to do with reality. I would just like to point out that this is not branding; it is suicide.
When I read that people started packing after Catalin Ionescu left, I realized he was a leader. If when a company dies or panics just by a person going when the restructuring plans haven’t been admitted, it’s a pretty good signal you have a leader. Suppose you carefully read the article on the person who learned and practiced successful management by talking to people for more than 15 years. In that case, you understand that admitting errors and talking to people is a leader’s virtue. Keeping these in mind, let us also look at this interview, taken a year ago with Catalin Ionescu, before the crisis hit CODECS.

During his presentation at Open Coffee 2 weeks ago, Radu Georgescu talked about the virtue of openly admitting failures as being a capital one for an entrepreneur, as a proof of character, vision, and attitude, as I understood it.
I have not physically met Catalin Ionescu. I think my only direct contact with him was just to talk to him over the phone, incidentally, about using a hall at CODECS for 2 hours for an event. I don’t know whether he made a wrong choice; I am merely stating some facts that anybody could observe.
I challenge the successful entrepreneurs who read this article to comment on their failures in business and how they have learned from these experiences.

Marcus Victor Grant

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