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Deeper Thoughts
We Learn Best Through Mistakes
01.24.2023

I recently came across one of my all-time favorite quotes, and was, naturally, compelled to post it on LinkedIn!

Good judgement comes from experience. Experience comes from bad judgement.

We can learn in any number of ways. Instruction. Reading or viewing. Observing others.  But this is not just a world of binary or one-off decisions. Most of what we do, whether in our personal lives or in business, involves a series of decisions, many of which we hope will bring about a certain result or results. That develops into judgment.

More than occasionally, we all fail to get the result we want. We come up short. We make mistakes. And it’s here that we can truly take our lessons and develop judgement.

Making mistakes in a mistake-adverse industry

Now, let’s apply that reality to the mortgage industry. It’s easy to understand why we are a risk-averse industry that recoils at the thought of mistakes. We’re heavily regulated, often by people and entities who don’t understand what we do and who might have a negative perception of what we do. At the core of a mortgage is a calculated risk. A lender provides a large sum of money to a borrower in the probability that borrower will pay it back, plus fees and interest. When a lender’s underwriter makes a “mistake” in that calculus, and a loan defaults, the lender is punished to some degree. So it’s easy to see why, especially in industries like ours (the law is similar, as is health care), mistakes are most certainly frowned upon.

Mistakes as a means of development

I believe, however, there is some room for greater tolerance of mistakes, especially when it comes to training, mentoring and developing future mortgage leaders.

I’m not suggesting decision-makers in our space should behave recklessly or open the door to a flood of potential mistakes just for the learning opportunity. Far from it. LodeStar has been built upon the foundation of eliminating mistakes (as much as possible) from the closing fee estimate process. 

But I’m thinking of work cultures, typically hand-in-hand with burnout cultures, that can’t abide by mistakes made in good faith. I’m thinking about management styles that punish mistakes—even if they’re made in an effort to aid the business. I’m thinking about just how hard we can be on ourselves when we make mistakes. Even in those instances, we’re learning. But we’re also being punished.

The key to making this work is embracing what we learn in failure. This is certainly an “experience-oriented” industry when it comes to recruiting, retention and promotion—frankly, maybe too much so. But “experience” is relative. I know plenty of “experienced” professionals I wouldn’t trust with the simplest of tasks. 

We have a partner here at LodeStar who likes to say that there’s a big difference between having 20 years of experience or living the same year 20 times in a row. It’s our ability to recognize where we made our mistakes and having the wherewithal to determine what we needed to do differently to get to the desired result that makes a failure an educational moment. Not everyone does that. 

I’d encourage managers in our space to—at least to the degree it’s acceptable—encourage these teachable moments. There’s no reason to pile on when a colleague or report makes a mistake and knows he or she did. There may be reason, however, to ensure that the person has learned what could have been done differently. And, in so doing, the manager has facilitated development and growth.

We all exhibit bad judgement from time to time. The important thing, however, is that we learn from the experience.

 

We at LodeStar are grateful to all of our clients, friends and colleagues who take the time to view Deeper Thoughts. Please consider having a look as well at some of our other great content, including our podcast, “LodeStar’s Lending Leaders,” and A Tale of Two Mortgages: an original webcomic for the mortgage industry, presented by LodeStar.”

As always, your feedback is welcomed and appreciated!

 

 

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