Some years ago I read an article in which the author recounted working with a particularly gifted leader, and cited one incident in particular that demonstrated the leader’s wisdom.

A member of the management team had made a mistake of some kind — a pretty significant one, that had cost the organization $2 million. The mistake led to a lot of disruption, of course, and for a while the organization’s leadership was occupied with running around trying to contain and clean up the damage. The person telling the story recounted that as the dust was settling, he took the CEO aside and asked “You’re going to fire him, aren’t you?”. The CEO looked at him with genuine surprise and responded “Fire him? Are you kidding? I just invested $2 million in his education!”.

I’ve thought about this story — and cited it in presentations and meetings — many times since reading it, because I think it vividly illustrates a centrally important quality of leadership: not only the kindness and tolerance that are essential to effective leadership, but also the ability to look beyond the mistakes made by people in the organization and see strategic opportunity.

Of course, in a situation like the one described above, such a stance only demonstrates good leadership if at least two conditions apply:

First, the mistake was made in good faith. If an employee makes an honest mistake that arises from ignorance or a lack of skill, both the employee and the library organization are likely to benefit from a tolerant and gentle response from library leadership. This is true, in part, because everyone (very much including library leaders) makes mistakes and a draconian response to one person’s mistake will only encourage others in the organization to hide their errors rather than own up to them. It’s also true because a culture of punishing mistakes rather than treating them as learning opportunities is likely to discourage everyone in the library and make it less likely that they’ll think and work creatively, taking appropriate risks. Leaders should also bear in mind that the people they lead are watching their performance and judging it, either tacitly or openly, and that the organization’s collective assessment of its leaders’ performance has a significant impact on how well the library functions. Leaders who want grace from their employees have to be willing to extend grace to them.

Of course, not all errors are made in good faith. Sometimes they arise from a willful disregard for policy or best practice, or, worse, genuine dishonesty. A mistake made in bad faith will usually need to be treated differently from an honest one, which leads us to the second condition:

The mistake represents an error of judgment or skill rather than a breach of law or ethics. Everyone makes mistakes, but not everyone intentionally acts in bad faith. To put it baldly: there’s a very important difference between losing $2 million due to a careless error and intentionally misappropriating $2 million. If one of your employees has broken the law or committed a significant breach of professional ethics, your options as a leader are much more constrained — not only is it important to send a message to the organization that such breaches will not be tolerated, but you will likely be under legal or professional obligations yourself and will not have the option of showing tolerance and mercy in ways you might otherwise wish to. If you find yourself in such a situation, it’s imperative that you begin working with your HR team immediately, and possibly also with your host institution’s office of general counsel, to make sure that you do everything required of you by law and policy and that you not accidentally do anything prohibited by law or policy. And speaking of policy, here it’s important to point out that a breach of policy does not necessarily represent a breach of law or ethics (though of course it could be all three). Honest, good-faith mistakes will often represent breaches of policy, but they do not typically represent illegal or unethical behavior.

The bottom line is that grace and charity are essential qualities of good leadership — partly because they’re just good human qualities that lead to a healthy work environment, and partly because they’re an important element of sound organizational strategy. But grace and charity have to be expressed differently in the context of good-faith errors than in the context of intentionally dishonest or bad-faith errors.