How the best CEOs deal with failure and setbacks
In our fast-paced and competitive business world, failures and setbacks are inevitable. They can occur at various levels, from individual projects to company-wide initiatives. However, far from being negative experiences, failure and setbacks have significant implications for growth and success. They provide valuable learning opportunities, allowing businesses to refine their strategies, improve their processes and innovate.
Through failure, entrepreneurs and business leaders gain insights into what works and what doesn’t. Each setback presents an opportunity to assess strengths and weaknesses, identify areas for improvement and develop resilience. Failure fuels creativity, encourages out-of-the-box thinking and fosters a culture of continuous learning.
Importance of strong leadership in navigating through failures
While failure can be a powerful catalyst for growth, strong leadership’s role is to guide organizations through these challenging times. CEOs and business leaders are critical in shaping the organizational response to failure and setbacks. Their ability to navigate adversity, inspire their teams and lead with resilience is paramount.
Influential leaders understand that failures are not indicative of personal shortcomings but valuable stepping stones to success. They embrace failure as a necessary part of the journey and encourage their teams to do the same. Leaders create an environment where innovation and creativity thrive by fostering a culture that views failure as a learning opportunity.
Moreover, strong leaders demonstrate resilience in the face of setbacks. They remain composed, assess the situation objectively and inspire their teams to persevere. Through their leadership, they instill confidence, motivate employees to learn from failures and guide the organization toward a brighter future.
Failure and setbacks are an integral part of the business landscape. Recognizing their significance and embracing them as opportunities for growth is crucial. With solid leadership, businesses can navigate through failures, learn from them, and emerge stronger and more successful.
Don’t let failure define you
One of our family business clients in the region told me how he took over the reins of his family’s very profitable business conglomerate, home to many iconic Filipino brands. He was under much scrutiny from the other family members, who continued to criticize his performance. Soon he made a grave mistake that cost his family and the business much money.
The problem was that he continued to let this failure define him and influence his decision-making even 10 years after. It caused him to get into “paralysis because of over-analysis.” You can never have 100 percent of the facts. As a CEO or business owner, you must make strategic decisions based on key variables. Otherwise, life and competitors will pass you by.
And that is precisely what they did in this case. Because he feared never wanting to make a mistake again, he wanted to go for perfection—and they missed many valuable business opportunities.
Learning from failures to improve decision-making and strategy
Failure is feedback. The lesson? Analyze your mistakes. Get to the root causes. Write them down. See if you can get to the bottom of the principles behind the root causes—this means the principles of decision-making and management that you can use to improve your performance and business acumen as a leader.
Then let your mistakes go. You learn more from your failures than from successes.
Analyze. Get to the root causes. Write the principles down. When we support our clients in their planning sessions and strategic roadmaps, we always have them become aware of—and challenge the—principles and assumptions behind their plans. These assumptions are even more important than the plans themselves because they allow you to check back later and see where you went wrong.
This continuous analysis never stops. This is why most successful CEOs and billionaire entrepreneurs constantly analyze their performance to derive the nuggets from their learnings.
Everybody needs feedback to improve. Failures are perfect, albeit painful, feedback mechanisms.
Fight or Flight?
The natural fight or flight response is built into humans early on. About analyzing mistakes and failures, this natural response does not serve us, however.
Why? “Fight or flight” from a mistake means you blame everyone else but yourself for your shortcomings, failures and errors. We often see that in our daily practice of advising CEOs of some of the world’s largest companies and family business conglomerate owners, especially in the boardroom. The blame game is everywhere. People do not accept responsibility, do not hold themselves accountable, and therefore never learn.
Refrain from making the same mistake. This is like a virus. You need to plug it out as soon as it appears. Do not avoid the pain—face it. Analyze your mistake. Own up to them.
Natural blind spots
Business owners and CEOs are too close to the trees to see the forest. They have natural blind spots. There are walls they cannot see through. This is why even the most successful of them, from Bill Gates to the CEO of Alphabet, Sundar Pichai, who became a billionaire as well, have coaches and consultants.
When Satya Nadella took the helm of Microsoft in 2014, the company was facing significant challenges. Nadella acknowledged the need for a cultural shift and encouraged a growth mindset throughout the organization. Under his leadership, Microsoft embraced failures as part of the learning process.
A pair of fresh expert eyes can often easily see the unexploited opportunities lying there in easy reach.
Another one of our clients in the Philippines, a family business conglomerate, almost branded one of the sons who took over parts of the business as an outcast because he had made a mistake a few years before that cost the family a few million dollars. Yes, mistakes are painful, and ideally, you don’t want to lose money. But if it happens, and the son has learned from it, and the family as a whole has learned from it, and the principles learned were written down and are now ingrained in the company culture, move on!
The winning mindset
The magic word is “yet”!
If Thomas Edison had not had his famous mindset, he would have stopped well before mastering the electric light. “I have not failed. I’ve just found 10,000 ways that won’t work,” Edison said. That is the right mindset to adopt.
Think of failure as temporary. Just because something has not happened yet does not mean it will not. It just means you have tried and have yet to find the solution.
Every failure should make you determined to find another way. The more determined you get, the more you will succeed. In the words of Edison, “Many of life’s failures are people who did not realize how close they were to success when they gave up.”
Tell yourself, “I refuse to repeat mistakes that didn’t produce the desired results.” And then, tackle your next challenge and next goal! INQ