As a retail business owner, it can be easy to fall into the trap of playing it safe and avoiding mistakes at all costs. However, as counterintuitive as it may seem, mistakes are actually the fuel for business growth, and leaders should insist on creating an environment and company culture that encourages experimentation, risk-taking, and learning.

As an entrepreneur and founder of The Entourage, Australia’s largest business coaching provider, I’ve seen many businesses try too hard to avoid mistakes at all costs, and the result is that they end up stagnating and eventually decline. On the other hand, businesses that see mistakes as a natural part of the growth process flourish. In fact, I’ve found that most of the biggest breakthroughs in business have come from the mistakes that were made along the way.

As the business owner and leader of a team, cultivating a culture which recognises that mistakes can be the fuel for growth starts with you. You should create an environment where your team takes ownership of their decisions and mistakes, and use the lessons learned to ultimately grow into a better operator and person. You never want to dampen your team’s innovative spirits; you want to encourage it, utilise it, and empower them to get better.

Here are some ways that leaders can create an environment where their employees feel safe to experiment, comfortable with making mistakes, and empowered to learn and grow from them:

Build trust and psychological safety

Leaders can create an environment where employees feel safe to experiment and make mistakes by building trust and psychological safety within their team. This involves showing empathy, being approachable, and fostering an open and transparent communication culture. When employees feel that they can approach their leader with any issue, they are more likely to feel comfortable experimenting and making mistakes.

Empower your team members to “own” projects

By giving employees responsibility and autonomy, they will be more invested in their work and feel more comfortable making mistakes. Leaders can encourage employees to take ownership of their projects and allow them to drive the decision-making process. When employees feel that they have control over their work, they are more likely to experiment and take risks.

Encourage calculated risks

Leaders can encourage their team to take calculated risks by providing them with the necessary resources and support. This involves empowering employees to experiment with new ideas, while also ensuring that they do their due diligence and research before implementing them. By encouraging calculated risks, leaders can create a culture of innovation and experimentation.

Avoid the “blame game”

When mistakes happen, leaders should avoid placing blame on individual team members. Instead, they should treat every mistake as a learning opportunity and use a collaborative approach to identify the root cause of the issue and find ways to prevent it from happening again in the future. When employees feel that they won’t be punished for making mistakes, they are more likely to experiment and take risks.

Hold ‘fail forward’ sessions

When employees see that their failures are met with understanding and support, they are more likely to try new things and experiment without fear of judgment. Leaders can hold “fail forward” sessions where employees can share what they learned from their failures and how they plan to apply those lessons in the future. By holding these sessions, leaders can create a culture of continuous improvement and learning.

Lead by example

Leaders should be willing to admit their own mistakes and demonstrate how and what they learned from them. When employees see that their leaders are open to feedback and willing to learn from their mistakes, they are more likely to adopt a similar mindset. Leaders can also model the behaviour they want to see in their employees by taking calculated risks and encouraging experimentation. This helps create a culture of continuous improvement and innovation, where mistakes are viewed as opportunities for growth.

Both successes and mistakes can provide valuable insights into how you can build a great retail business. In fact, if you and your team are not making mistakes, then you’re probably not growing at the rate you should be. The focus for you and your team should always be on learning from your mistakes, and seeing them as opportunities for growth rather than setbacks. Ultimately, failure is simply feedback, and the way you choose to respond to it is what truly matters.

Jack Delosa is an entrepreneur, investor, and founder of The Entourage.