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Lyft's Typo Snafu Proves Tiny Details Can Have Big Ramifications
"First of all, it's on me."
That was the simple, humble response Lyft CEO David Risher gave yesterday in an interview with Bloomberg, when asked about what some are calling a $2 billion typo.
Lyft was forced to issue a major correction to a press release announcing that the 2024 earnings margin outlook was expected to expand by 500 basis points, instead of the accurate number of 50 basis points. That extra zero led to a huge jump in share price in after-hours trading, briefly creating about $2 billion in market cap for Lyft.
Analysts said they had never seen a mistake like this in the history of financial reporting.
"We go through hours and hours of checking and double checking before something like this goes [public]," Risher explained. "It's an unacceptable error. Again, ultimately it's on me--I'm the CEO, the buck stops with me."
Risher's humble reply is a great example of emotional intelligence, which includes the ability to build trust, motivate, and inspire. Let's take a moment to analyze exactly why, and see what lessons business leaders everywhere can take from it. (If you find value in this lesson, you might be interested in my free emotional intelligence course, which teaches you how to build EQ in yourself and your team.)
In reality, a mistake like Lyft's is likely the responsibility of hundreds, if not thousands.
The writers, editors, and proofreaders of the press release. The CFO and her financial team. Everyone at Lyft who read the press release before going public. And, yes, the CEO.
But here's the thing: If the leader doesn't take ownership of a problem, the risk is that no one will.
That's the core message taught by former Navy SEAL turned executive coach Jocko Willink. In a famous TED talk viewed over seven million times, Willink shares the harrowing experience of a "friendly fire" attack during an operation he led in Iraq in 2006. A series of mistakes led to soldiers on the same side fighting one another.
When "the fog of war lifted," said Willink, one soldier was dead, three were wounded, and the entire team was badly shaken.
In the ensuing investigation, a number of soldiers volunteered to take blame for what had happened. But Willink insisted what happened was not due to any of those soldiers' actions.
"There was only one person to blame," said Willink. "And that person was me."
By taking ownership of the problem, and by leading the effort to adjust techniques and processes so that mistake never repeated itself, an interesting thing happened: Willink earned trust and respect from everyone, from those under his command to superior officers.
When a leader takes ownership of a problem, said Willink, the entire team takes ownership. And when the team takes ownership, problems get solved.
"That is true on the battlefield. It is true in business. And it is true in life," he said.
It's true in Lyft's case as well. Just think of the consequences if Risher had shirked responsibility. If he had thrown his CFO, or her team, or anyone else under the bus.
Sure, the problem may get solved temporarily. But the resulting loss of trust and camaraderie would likely cause other major, unsolvable problems.
It would undermine what the company had accomplished, including what Risher described as the strongest financial quarter in the company's history, a "butt-kicking performance ... thanks to all our employees and thanks to millions of drivers."
In contrast, Risher showed humility, took ownership of the problem, and then praised the team for its accomplishments over the past year. In doing so, Lyft's chief executive made a big statement about how he views himself in relation to others. He took control of his ego, instead of allowing his ego to control him.
So, if you're a business owner, executive, manager, or team lead, remember this example. Remember that mistakes aren't just failures, they're learning opportunities.
Most of all, remember: Take ownership.
In doing so, you'll show that you value relationships more than your ego. And everyone else will follow your lead.
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