Open error culture in the company

What do you think about risk and mistakes when it comes to innovative solutions?

Bastian Härzer: I myself am the innovative part, which means that I tend to ignore potential errors and risks to a certain extent. But I have my team, who see things very differently and also slow me down to a certain extent and ask how we deal with a potential idea and how we implement it. In other words, how we can actually develop an idea into a product or service in some form.

How do you manage the balance between mistakes, risk avoidance and innovative action as a team?

Bastian Härzer: We have decided to grow quickly. This means that we have consciously taken the risk of making mistakes. But what we do is deal with it openly and see which idea has produced a risk or a mistake in which time and how we can readjust relatively quickly. That is a conscious decision. In other words, we have definitely made mistakes, we know that, but we have also dealt with them very quickly and openly. We can make any mistake once, but we don't want to make it twice. And that was a conscious management decision. Others analyze, perhaps conduct studies and prove how to make fewer mistakes. We have said that we have an opportunity in the market and in our case this opportunity also means speed to a certain extent. And in order to achieve this speed, we have accepted the fact that we sometimes make mistakes.

What do you think of this debate about a learning culture rather than a culture of mistakes?

Bastian Härzer: We haven't actually used the term "learning culture" at all; for us, it's an error culture. We talk about it openly, everyone from the management to every employee, whether international or national, it doesn't matter to us. There are cultural differences in other countries as to what a mistake means, but we are also in the process of involving employees and saying: "This is a conscious decision, you are allowed to make mistakes." This is part of the speed that we also demand from employees to a certain extent in order to grow and drive the company forward.

Do you differentiate between small and big mistakes?

Bastian Härzer: Minor mistakes always happen in our day-to-day work. That's also normal, and then it's discussed directly. These are normal things that are also communicated internally. For example, if someone has perhaps missed a guideline or if errors have come to our attention internally in another context, or if there is perhaps new information that not everyone had before. That's day-to-day business. What error culture actually means for us is speed. If someone has a new idea and wants to expand into a new country or work on a new topic, for example, then we ask ourselves what the new topic means for us. In our case, let's take the current NIS 2 directive that has just come out. These are new legal requirements in the area of information security. We were aware of this last year and asked ourselves what we thought about it. For example, whether it is a national or a European issue, how we deal with it or how we can develop products for it, and so on. Then we think about who is responsible for it and then also for this product. We ask ourselves who will get the first reference customers. And how we can achieve the fastest possible learning curve, ideally faster than the competition, so that we have a solution on the market and a new product to add to our service portfolio. And of course we make mistakes in the process because we also go at this speed. But this has to be dealt with quickly at team leader or management level so that we don't damage ourselves in the long term.

How do you manage not to take too many risks?

Bastian Härzer: We made a big mistake last year. We give our employees big shoes and they are always two or three sizes too big for them to grow into. There was a decision to say: "I've got this under control, I'll take care of it" and then we let go a bit. In the end, it was perhaps two to three sizes too big and it should perhaps have only been half a size too big. We actually had to correct it afterwards. The mistake cost us a low six-figure sum, we really did have to learn the hard way. But the difference was that we made the mistake transparent. We communicated that it's not a problem if the shoe is three sizes too big. Then we take smaller steps and tell our employees to grow by one size first and then we'll take it from there. Everyone understood that. Afterwards, it was very, very positive. The mistake that cost us money last year saved us an X factor this year because we made it transparent and because we were able to grow much more strongly and sustainably this year than last year. Sometimes a mistake like that is cleansing if you deal with it properly. And that's what we tried to do. I also believe that we succeeded because we made it transparent. That has allowed us to grow.

I don't applaud every mistake that is made. But I and our employees can at least take a step back and review the mistake and say where they went wrong, what they misjudged or didn't see coming. And that is precisely the learning curve where, if you make it transparent, everyone else says, I'll ask again. We now have a culture in which employees talk to each other and no longer necessarily to me, and say things like "This and that happened last year, what do you think? I don't want to make the same mistake again." That's crucial and it gives us a really good dynamic. There are no more big swings. If a mistake happens, it's comparatively small because we had a big one last year. That's actually really good for the moment and it's also really fun because we're making good progress.

Would you say that the topic of cyber security tends to inspire you when it comes to dealing with risks and errors, or is it more of a hindrance?

Bastian Härzer: For us, it's more of a help. We work in an area that hasn't been around for ten, 15 or 20 years. Nobody can say that they have been an expert for years. The market is too dynamic when it comes to information security. And that's why no one else has this level of experience, which means you can still make a few mistakes. I gave the example of NIS-2 earlier, the final version of which was released in October of this year and can now be used. Nobody can say that they have been familiar with the subject for ten years. We now have to deal with this new requirement and ask ourselves how we can evaluate it based on the experience of other standards and guidelines. That is also our advantage, that we have these comparative values. And we then implement them accordingly.

What personal risk have you learned the most from in hindsight?

Bastian Härzer: I'm not the classic founder in terms of age. In my early 40s, I actually looked for a way into self-employment and left a management position with a corresponding salary. It takes courage to take such a step with a family, a small house and three children - in other words, the classic conservative approach. It means exposing the family to a certain amount of risk. It may no longer be possible to maintain the standard of living you have achieved. This requires a strong wife who goes along with you and believes in you. But then you also have to put in a lot of work. So you have to be realistic. You don't build up a company in a 35-hour week and you really have to put your heart and soul into it. But if you do that, then the risk becomes a bit blurred. I always say that if there is enthusiasm for a topic and the market is also there to a certain extent and the potential to make something out of it, then it is a calculable risk. Otherwise I wouldn't have done it like this. So it was good for everyone involved. It has certainly also brought the family a little closer together, who are now working together enthusiastically.

What management skills does it take to be an innovation pioneer today?

Bastian Härzer: First of all, you have to be brave enough not to go down the usual path, but to look for new topics that are not yet covered and take them on. There are always two things: on the one hand, I have to pay the bills every month, so I also have to have a topic that allows me to earn money somewhere. On the other hand, I also have to see how markets are developing and how other areas are developing and ask myself how I can be innovative in such an area. When I meet other colleagues, perhaps also other founders, they often have an incredible number of innovative ideas, but it takes five years before you can earn money with them. I come from a family of entrepreneurs with a different background and I want to be able to pay my bills every month. So I also look for a topic that I can earn money with today, that I can work with, so that I can then build on it and be innovative. I think you need something like an anchor in both directions so that you can also assess whether you are developing beyond the market. I can't say that a service or a product is worth 2,000 euros or 5,000 euros or 10,000 euros if I don't know in advance how much effort it will take to earn that amount. And one question is whether it is appropriate at all, i.e. whether the market is prepared to pay this amount. This anchor is sometimes missing if you only focus purely on innovation, but you need it in both directions.

If you had to name a mistake as a superhero, what name would you choose?

Bastian Härzer: Well for us, as I said, it's courageous and that's why it's Captain Courage. We are very courageous, we dare to do things and that is the core or, to a certain extent, the DNA of our corporate culture, and we have to continue on this path if we want to continue to grow and be as successful as we are. Being courageous and daring to do things, but then of course also being prepared to make mistakes from time to time, but also dealing with them openly.

The interview was conducted by Dr. Tanja Jovanovic, Head of Marketing and Innovation Management, Member of the Management Board, Bayern Innovativ GmbH, Nuremberg.

Listen to the full interview as a podcast: