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$2 million mistake didn't get employee fired. Here's why

Imagine making a $2 million mistake and not getting fired. No one was happy about the mistake at Braskem Americas, where an employee made a bad deal and cost the petrochemical company a lot of money. But, the company has an employee development company that factors risk into its talent development plans.

Imagine making a $2 million mistake and not getting fired. No one was happy about the mistake at Braskem Americas, where an employee made a bad deal and cost the petrochemical company a lot of money. But, the company has an employee development approach that factors risk into its talent development plans.

Mark Nikolich, CEO at Braskem Americas, headquartered in Philadelphia, said that Braskem Americas' parent company, Braskem SA, based in Brazil, has built talent growth and management into it concept of delegation.

"A lot of companies talk about delegation," he said.  "... We have a delegation concept in our culture, but it's called planned delegation, which means that you and I talk about the limits of the delegation, why those limits are there, what do we consider stretch.

"We want our team members to stretch.  We want them to take risks.  We accept that.  It's part of the learning process.  And, we don't scold them, penalize them, for taking risks within a planned delegation scenario.  So, we say, 'This is core and you can make all the decisions on your own and call me if you need support. But, in this area I'd like you to stretch yourself.  If you're not comfortable today taking risks in that area, I want you to.  You're capable of it.  Stretch yourself, don't worry.  I've got your back.  I support you.

"And in these areas, we should consult.  That's planned delegation, not the concept [of delegation] that was pretty rampant in the late 90's, early 2000's, which was: Just delegate.

"So, this concept of planned delegation is pretty universal. In Germany we actually made it, which means intelligent delegation, which means there's thought behind it, not just, 'I delegate to you. Good luck.' "

Question:  Sometimes that delegation is really a way for the boss to shed responsibility and have someone to blame.

Answer: Blame later or critique later.

Q: Well, critique is the kind term.

A: It's the kind term, exactly.  To me, this is a little bit of a different cultural concept for us, taking risk.

Q: Give me an example of planned delegation on the margin where there was a screw up and what happened.

A: We had an inexperienced team member making a trade, buying and selling feedstock product, right? [Feedstock means the raw material Braskem uses.] So, we have formal parameters in which they can operate.  They can only sign off on certain things.  Then there's this planned delegation discussion. So, if they see a good deal, they can go into a risk zone up to a certain point, right? And, one of our team members, within the planned delegation regime, made a trade that we delegated to the individual, the leader delegated, everybody knew.  And, we lost $2 million bucks.

Q: Wow.  What was wrong with the trade?

A: Wrong time, wrong structure of the deal, still a lot to learn for the inexperienced team member, but we were willing to take the risk, because how do you learn.  You learn by doing.

Q: You've already said that $2 million was your window of risk. Did the person get fired?

A: Absolutely not.  They were deathly afraid [of being fired] because they came from a culture that was penal, that laid blame. Worse yet, leaders put blame, which is the worst kind, right?  Because that has all other kinds of implications about future progression, career, all those things.  We say a lot: "Mistakes are fine.  Don't make the same mistake twice." Then, let's fix the process.  Let's fix the thought process, the business process, whatever it is that we do, to make sure we don't make the same mistake twice.  We'll make a lot of new mistakes, but let's try not to repeat the ones we've already made.

Q: In the case of the $2 million mistake, was it something that was poor judgment on the employee's part, or was it something that was a company system's process?

A: It was a lack of breadth of view, which is the other concept I wanted to bring into this.  This is a personal. ... I'll say that part of this is [my] view.  First of all, I love the Braskem culture.  I fit the culture.  I feel at home in the culture.  So, it's hard to differentiate between my leadership style and what I believe is good in culture and what we have here.  They're pretty close to one.  I might use some different words, but they're pretty close to one.  So, diversity and breadth of view is extremely important.

Q: What does that mean, breadth of view?

A: It means you need multiple perspectives of the same situation.  So, let's just take this deal as an example. So, the individual [should have] talked to three or four people -- not asking, 'Do you approve this deal?' but, 'What do you think about this deal? What are the challenges with this deal? What's good? What's bad? Shoot some holes in it." Now, to do that I have to be comfortable asking.  I have to be comfortable that I could be wrong, which is what we call vulnerability based trust.  I have to be able to admit I might be wrong and receive that feedback.  But, if I do that with three or four people that are experienced, that maybe even come from different disciplines, I might see something in this problem, in this business solution and in this deal, that I didn't see before.  That's what I call diversity and breadth of view.

Q: So, the lesson to this person was ask more people?

A: Ask more people and don't ask the same people and don't ask the people that are going to give you the answer that you already have.  Ask somebody that's going to have a totally different perspective.  And, that's typically based on their background, where they come from, their experience base, whatever the case may be.