10. The Power of Forgiveness in Business - Learning from Financial Setbacks

Learning from mistakes, letting go of blame and fostering growth

1. Introduction

Business setbacks are inevitable. In tight economies, they often come faster and hit harder - a bad debt, a missed forecast, a failed investment. What matters most is not avoiding every mistake, but how we respond once it happens.

This article belongs to Pillar 3 - Leadership in Uncertainty. It focuses on the role of forgiveness in business. Not just forgiveness of others, but also of ourselves. Learning from financial setbacks requires clear thinking, compassion and the ability to move forward without being weighed down by blame.

2. Representative Narrative

Raj owns a small manufacturing business in Waikato. Earlier in the year, he made the call to take on a large custom order from a new client overseas. The deposit was delayed and then the entire job fell through. He had already ordered materials and hired short-term staff. The loss hit cash flow hard and he blamed himself for taking the risk.

For weeks, Raj avoided talking about it. He stopped replying to his advisor’s emails and pulled back from his industry group. Finally, at the suggestion of a friend, he met with John Luxton from RegenerationHQ, someone he’d worked with years ago.

John didn’t jump into fixes. He just listened. “You made the best decision you could with the information you had,” he said. “Now let’s figure out what’s worth keeping from the experience.”

3. Recommended Actions

• Acknowledge what happened - without judgement
  Write down what occurred, what you were aiming for and what went wrong. Try to separate facts from self-blame.

• Identify what was within your control and what wasn’t
  Many financial setbacks involve external factors - market shifts, delays, client behaviour. Focus on what you can learn, not what you can’t change.

• Talk it through with someone objective
  Whether it's your advisor, mentor or peer, speaking out loud can break the shame loop and bring clarity.

• Extract the lesson
  Every mistake holds a piece of insight. Maybe it’s about timing, risk management, due diligence or client selection. Write it down - use it going forward.

• Forgive yourself and close the loop
  Don’t let one decision become a running story about your competence. Learn it, own it and let it go.

4. Expected Outcomes as Narrative

Raj and John unpacked the project together. They reviewed the decision timeline, contract terms and communications. Raj realised he had pushed forward on gut instinct without a written commitment. He also saw that he had flagged his concerns weeks earlier but ignored them to protect the sale.

Instead of hiding the loss from his staff, Raj explained what had happened and what he’d learned. He created a new project checklist for high-value work. His team felt more confident, not less, because they saw his ownership and it strengthened trust.

Six months later, Raj landed another large contract and this time, his checks and safeguards were solid.

5. Red Flags & Mitigating Strategies

Red Flag 1 - Avoiding the financial details after a setback
Mitigation - Review the numbers clearly and promptly - the longer you wait, the harder it feels

Red Flag 2 - Blaming others without reflection
Mitigation - Take responsibility for your part, but stay fair - not all outcomes are personal failures

Red Flag 3 - Letting a past mistake define future choices
Mitigation - Create a learning summary and actively close the story

6. HR Best Practice

Mistakes don’t just affect owners, they ripple into teams. How you handle them sets a powerful tone.

• Be honest when setbacks happen and model calm reflection

• Involve key team members in solution-building, where appropriate

• Avoid blame culture - focus on process, not personality

• Celebrate the recovery, not just the mistake

 John often reminds leaders that when teams see a leader grow from a setback, they feel safer to speak up and take healthy risks.

7. Psychological Perspective

Financial setbacks can trigger shame, fear and even grief. They can make capable people question their worth. This emotional weight often slows recovery more than the numbers do.

Forgiveness - both internal and external, restores momentum. It allows you to shift from stuck to forward. John encourages owners to treat themselves with the same understanding they’d offer a close colleague. No one leads perfectly.

8. Recommended Owner's Mindset

Embrace a mindset of self-compassionate accountability. Be honest about what went wrong, but don’t weaponise it against yourself. Mistakes don’t mean weakness, they mean you were in motion, doing your best with what you had.

9. Reflective Questions for the Owner

• What part of this outcome was within my control?

• What have I learned that I’ll apply next time?

• Who do I need to forgive — a client, a supplier, myself?

• Am I holding onto the failure longer than it’s holding onto me?

• How would I speak to a staff member in this position — and can I speak that way to myself?

 10. Suggested Ongoing Actions

• After any financial setback, document the timeline, impact and learnings

• Keep a personal “lessons bank” - short notes from challenging decisions

• Check in with your advisor or accountant after major changes

• Build new questions or checks into future decision-making

• Create space for recovery - rest is part of the reset

Critical Takeaway - A setback becomes a failure only if it teaches you nothing - forgiveness is what clears the way for growth.

If you’d like a confidential, free of charge, free of obligation conversation about your business, here’s how to get me.

📞 Phone +64 275 665 682
✉️ Email john.luxton@regenerationhq.co.nz
🌐 Contact Form www.regenerationhq.co.nz/contact

If you’d like to read more RegenerationHQ thinking on SME business and other things, go here – www.regenerationhq.co.nz/articlesoverview

🔹 RegenerationHQ Ltd - Business Problems Solved Sensibly.
Supporting NZ SME Owners to Exit Well, Lead Better and Build Business Value.