Perception Versus the Reality of Failure

Significant failures can take many forms. Perhaps the most common one is failing to meet major organizational expectations. For instance, you’re assigned responsibility to develop a new product line, and you fail to deliver the prototype product by the deadline. Or perhaps the product design is flawed, rejected by focus groups, or simply can’t be priced at the right margin level. Or you may be responsible for a product introduction that fails, or you’re a business head who presides over three consecutive quarters of declining sales. A boss, a board, or the shareholders deem you accountable for the problem, and your punishment can be anything from not receiving a promotion to being fired. These situations happen frequently in companies everywhere, but to the leader to whom it is happening, it often seems as though he or she is the first and only person to have the experience.

A major failure can also be self-perceived. In other words, your boss or some other external party doesn’t perceive that you are not delivering, but you feel this as a fact yourself, acutely. Your team may have encountered significant competitive pressure, or endured the introduction of a disruptive technology by new market entrants, or just had some bad luck. And even though no one blames you for this failure, you blame yourself; you feel that others were depending on you, and you let them down. You may also feel you’ve failed to achieve a career goal, and you are furious with yourself for not doing what was necessary to achieve at the level you have set for yourself. Perhaps you are one of those leaders who is a perfectionist and will therefore, in your own eyes, never be good enough, never achieve enough, never be successful enough.

It’s also important to consider what you did that caused a failure. If you seek the diversity of experience that’s crucial for leadership, you naturally are going to find yourself in situations where you don’t have all the knowledge and skills necessary to do a job effectively. Therefore, you may cause a failure because of what you don’t know. This doesn’t excuse the failure, but it does provide insight into what you can learn from it. Or you might fail because you violated organizational values, treated people poorly, or were guilty of a breach of ethics. At GE, as in most companies today, people who fail for business reasons are given a second chance. Individuals who fail because of a values violation are not.

I’m not sure that I’ve slowed down to think about what I’ve learned [from the experience of leading a company into and out of Chapter 11 protection]. What I knew from the leader part of it was I really had to have the mind and the heart and the confidence of each key member of my team. I had to find a way to connect with them personally and also to lead them as a group. That was where I spent my time. It became clear to me long before the Chapter 11 happened that this was going to require a team that was really willing to aim at an objective outcome. We had a meeting. I needed each person to sound off. Folks didn’t hold back their reservations and ideas and concerns. Those meetings were the best ones.

Bob Glynn, chairman, CEO, and president, PG&E Corporation

Although your actions may produce a significant failure, this isn’t always the case. You may simply be the victim of bad luck; you happened to take over a business right when the economic downturn hit or your team or division experienced production delays, computer glitches, pricing pressures, or any number of challenges. Significant failure may also be caused by internal politics, by a competitor, or by any number of other outside forces.

No matter what form failure takes, however, it humbles and embarrasses us all. Public humiliation, whether it involves being fired, being chastised by a superior (or not being chastised when you feel you should be), or being grilled by the media, ridiculed by columnists, subjected to comments in on-line employee chat rooms, forced to answer questions about your poor quarter in front of your peers—these situations are not fun. Private humiliation—feeling as if you let yourself and others down—is equally tough to take. The good news is that if you’re open to understanding why you failed and able to acquire new knowledge and skills from it, you’ll grow as a leader.

John Reed of Citibank, for instance, became a better leader after his company was in trouble and he brought it back from the brink than he was earlier, when he presided over a thriving Citibank. Steve Jobs was forced to depart Apple, only to become a stronger leader and years later return to take over the company. Edgar Bronfmann lost a significant portion of his family’s fortune in selling their holdings in Du Pont (which doubled in market cap) so he could invest in Vivendi, which didn’t, only to resurrect himself as a current leader in the music industry. Significant failure deepens leaders, giving them the resolve and resilience they might not have had when they were running successful ventures.

I felt that I had been dealt a set of cards that were going to be very tough to play. I sure wasn’t going to leave the table. I had an obligation to lead the business back to a successful outcome. I owed this to the shareholders. I knew I needed to play these cards the best possible way you can play them.

Bob Glynn

Given the complexity of failure, it’s easy to do the wrong thing. Let’s look at how leaders most commonly err when faced with major breakdowns and losses.