I recall a story from some years back of a young financial trader who lost $10 million for his company in a single day right at the start of his career. When the trader offered to resign, his boss said: “Are you kidding me? I just invested $10 million in your education. Now get back to work.”
What happened in that moment? At its most basic level, the employee was given assurance—“We don’t think we made a bad decision hiring you”—and he was given the opportunity to redeem himself and use the experience to make himself a better trader.
Making that kind of workplace experience happen is something only possible to leaders who are mature enough and comfortable enough to work in an environment without hard and fast rules for evaluation. How this particular leader handled the trader’s terrible mistake we can call the “art of the second chance.”
Such a leadership style is really an art form and not management science. You’re not consulting a textbook or rulebook. You have to weigh a multitude of factors in a very short amount of time to extend an offer of a second chance. Some of these factors are:
- What’s the employee’s previous track record? Was the action an anomaly or part of a pattern?
- What kind of person are they? What’s your assessment of their virtue and character?
- How are they perceived by colleagues? Are they good team members? Do they collaborate well or are they more like lone wolves?
- Are they insightful? Are they successful at bringing into their job insights from reading, community work, hobbies, etc.? Or is work basically the only place they learn?
One important thing to note is that a second chance does not gloss over what happened. On the contrary, a second chance actually depends on acknowledging that what happened was truly regrettable—maybe even awful. Second chances depend on looking at what happened starkly and honestly. A second chance is not synonymous with “forgetting about it.”
What does a work environment look like when there are no leaders who understand and practice the art of the second chance?
Such a company is more prone to operate by using judgmentalism as a threat—as if people have no real dedication and must be whipped into action. Leaders who operate according to that principle have no self-knowledge. They fail to acknowledge the times in their past when they under-performed and wished for some sort of redemption.
Leadership based on judgmentalism is bad for employees and, ultimately, bad for business. A strong correlation exists between highly judgmental leadership and high rates of employee turnover. According to one research-based report, “Managers who operate like dictators, refusing to take other people’s opinions into consideration, run off good employees.”
On the other hand, there is a real upside to offering people a second chance when appropriate: Employees who are grateful, engaged, more knowledgeable and “worldly wise,” harder-working, dedicated and fiercely loyal.
In the aftermath of a mistake in the workplace, even a big mistake, effective leaders can see a core value and talent in some people and are willing to apply their leadership art in the belief that a one-time failure does not mean permanent banishment into the outer darkness.