Big companies should start hiring failures

Summary:

Executives of many large companies are unable to solve problems and fail to anticipate crisis because they have skirted failure throughout their careers.

Soichiro Honda


The biggest companies can hire almost anyone they desire.   For senior positions, they often employ high-powered executive search firms to find the brightest and most successful executives.   So, you have to ask why leaders of the world’s most important companies are universally out of touch with their employees, customers and the marketplace in general.

To fix the problem, they should start hiring more failures.   But, the people they need to hire never  interview and compete for top jobs.  Recruiters and hiring managers for elite companies are universally prejudiced against people who have  not succeeded at every step of their careers.  The bigger and more prestigious the company, the more “perfect” candidates are waiting in line to compete.  The first ones eliminated are those with the most important relevant experience, failure.

In truly competitive fields — politics, sports, art, literature, entrepreneurship, sales — failure is valued and revered.  Anyone who has accomplished something truly worthwhile knows that failures (missteps, disasters, flops, over extensions, bad judgments) are the most valuable mentors on the path to success.

In behemoth organizations, failure is only a vague concept.  Because they never hire anyone who has failed, they have never hired anyone who has made important decisions. Because, you cannot make conclusive decisions for very long without getting one miserably wrong and tasting the consequences.  Although that failure made you stronger and smarter, it put you out of the running for that executive position with a FORTUNE 100 company.

When an organization’s results begin to “trend downward,” the perpetual winners make sure the stain of failure doesn’t mar their resumes. If there is a fatal cancer in the company,  a la GM, Chrysler, Lehman Brothers, Merrill Lynch, MCI, AIG, it is likely that dozens of perfect-game executives will have served terms there without blemishing their records.  Each one will have effectively produced the kind of quantifiable results that qualify them for success.  They will have overseen consultants, teams and committees, all of whom expertly analyzed the problems and proposed possible solutions.  Failure would not have been part of their vocabularies.

What would be different if these companies hired failures?   First of all, people who have failed know what it looks like, smells like and tastes like.  They can see it coming and will rely on their painful experiences to keep it away.  At the same time, they will not be afraid to make strong decisions and will risk failure again in pursuit of valuable results.

Whereas the all-time champions see every new position as a notch on their pistols or a stepping stone that leads to a higher mountain (even when running one of the biggest companies in the world), the well-qualified loser will value the responsibilities of managing for one of the most prestigious companies in the world.  People who have had big successes and failures  understand the importance of every opportunity.

Most importantly, people who have experienced failure can more effectively manage their departments when people below them fail, which almost everyone of them will do everyday.  The only leaders who can enable team members to take away the most important lessons from their failures, and grow in the process, are those who have screwed up themselves.  Every company needs managers and executives like that.

Business history is filled with stories of businesspeople who have overcome repeated failures to change the world.  Henry Ford and Soichiro Honda are among the most notable.  Honda said, “Many people dream of success. Success can only be achieved through repeated failure and introspection. Success represents the 1 per cent of your work that results from the 99 per cent that is called failure.”  Most business owners know that is true.

But, how many big company sales managers, operations assistants, junior accountants, and entry-level project managers stayed on the fast track to the executive suite after botching three or four important assignments.  Those companies do not promote people like that, and they certainly do not hire people from the outside with a history of crashing and burning.  Those companies sell unprofitable divisions, lay off thousands of workers to preserve shareholder equity, reorganize through bankruptcy or strategically merge.  They do not recognize failure and they always have the luxury of hiring winners.