The Role of Failure in Leadership Development | In Practise

The Role of Failure in Leadership Development

Former Executive Committee Member and Head of HR, Novartis

Learning outcomes

  • The importance of examining past failure or setbacks with a constructive mindset
  • The role of feedback and personal accountability when addressing and learning from setbacks
  • The importance of communication channels where individuals can share information upwards from junior to more senior leaders
  • A proven framework to bounce back from failure
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Executive Bio

Norman Walker

Former Executive Committee Member and Head of HR, Novartis

Norman started his professional career with Ford Motor Co. in London, where he held a number of positions in human resources management. From these early years at Ford Motor Company, Norman moved on to increasingly important regional and then global HR roles at Grand Met and Kraft Jacobs Suchard, culminating in the ultimate strategic role as HR leader (1998-2003) in the (at the time) world’s largest merger that became Novartis. Here he was stretched to become a consummate leader, working on integrating and developing companies, cultures, individuals and teams into the giant success the healthcare company has become. In 2003, Norman established his company Ardfern AG which focuses on the nexus of the strategic and the human. He has served on public and private Boards, and for 15 years has been a senior advisor to global Private Equity firms. He co-wrote an important book called “Leadership Passages” and established a retreat for CEOs in 2010. Read more

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Why is it so hard to talk about failure?

Failure is the F-word in companies. It’s not a subject we really want to talk about, and there are good reasons for that. We want to focus on our success, but actually, it’s extremely important to understand why we failed, accept it, not blame somebody else, take the learnings from that failure, and move on. Why more companies don’t do that is a good question.

I think there are a number of companies who do that quite religiously, actually, and really go out of their way to analyze when things really go wrong. I hope Boeing are doing it as we speak because that’s a failure at a fundamental level. But in essence, nobody at an individual, never mind collective level, want to talk about what went wrong because that might mean, “It’s about me.”

Look at any number of Fortune 500 CEOs — a majority of them will have experienced a major setback in their careers. It’s something that is extremely hard to talk about at the time. Can you elaborate on that paradox?

Many CEOs, towards the end of their careers, will talk about what didn’t go so well early in their careers. There are fewer who are willing to stand up — and by the way, you can only do it so many times, of course — and say, “I completely screwed this up.” It happens, but it happens less frequently, for obvious reasons, I think.

What CEOs are quite good at, though, is explaining away stuff which is fundamentally failure. How often do you hear a CEO talk about, “Well, the weather this year really adversely affected our business,” or surprise, surprise, “The competitors did something quite unexpected which affected our business,” and examples like that?

The reverse of that, of course, is they’re less keen to talk about how, “The weather really supported our business this year because it was such a great summer, we had an uplift of 25% on soft drinks.” Whatever it is. It’s not a level playing field in terms of the explanation for the business results.
Why is it so difficult to talk about? Because I have to accept responsibility or my part in that responsibility which, for some people, is extremely difficult to do. Failure can be of a dramatic nature, where the business is terribly badly affected; for example, Ron Johnson, who almost single-handedly, within 18 months, lost sales of 25% at JCPenney, destroyed value — $17 billion to $13 billion in the same period of 18 months — and was subsequently fired. That’s a dramatic failure.

At the other end, there are setbacks, things you didn’t do as well as you should’ve done, which you may be, as an individual, really concerned about. But a good and reasonable boss will say, “Norman, it wasn’t good that we missed that number. However, that’s not the end of the world; and by the way, it shouldn’t define you. Let’s just push on and make sure we have it right for next time round.” And there’s everything between. Failure can be extraordinarily large or it can be what is quite a small issue, but I take it really personally, and it really upsets and bothers me.

What role have you seen failure take in leadership development?

I think it’s actually one of the most powerful forms of leadership development, strangely enough. Look at some of the great entrepreneurs in the world, Steve Jobs, for example. He wasn’t always at Apple; he got fired by Apple if you recall. Branson has had multiple failures but would still be held up as a pretty impressive entrepreneur.
I think the ability to persevere after setback or failure is fundamental. You have to have an awareness of what you did wrong, an appropriate degree of reflection around that, and the resilience to jump back up again and head out again to take that beach. You can’t be put off at the first push-back, and that is, I think, one of the keys. I think anybody who hasn’t had some degree of failure can’t have been taking very many risks with themselves.

What are the major variables that separate those who learn from failure from those who don’t?

The personality set-up is fundamental to that. Am I going to recognize, in the first instance, that I contributed to this? If I don’t, I’m not going to learn anything from it. I will blame other people, but it certainly wasn’t me. The first thing is facing up to my responsibilities, and if I won’t do it, somebody has to hold the mirror up and explain in very clear language why it was my responsibility. So, that’s the first piece: accept responsibility and don’t try to blame it on others.

Secondly, I think it’s very important to understand what I could’ve done differently. If I had my time again, what would I have changed? What decisions might I have made differently that perhaps would’ve brought a different outcome?

And thirdly, get back on that horse and get going. I can’t allow a setback or failure to define who I am. I often talk to people who are changing careers or mid-career, or they’ve lost their job and they’re looking for the next one, and they somehow feel they’ve failed. They have not failed. You’ve been extremely successful to date; otherwise, you wouldn’t be sitting there. There’s been a setback or change or whatever it is. You can and will be as successful going forward if you so choose. If you choose not to, that is your choice. Your success doesn’t suddenly disappear. Everything you’ve done over the last — choose your number — 20 years doesn’t just turn to dust because of one event.

Will I struggle to learn if I scapegoat, if I personalize the failure, or limit the thinking to the event itself? Could you elaborate a little bit on that last point; the individual event and it sitting within that wider context?

It’s difficult to generalize because it really does depend what it is. Let’s take something in the middle; I’ve missed the quarter numbers. Those are my numbers, I set them, and I’ve missed them. There will be all sorts of reasons why, and some are very fair and legitimate reasons. If you’re running a business post the crisis in 2008, 2009, and your business fell off a cliff, that’s not your failure. That’s external circumstances you had zero control over. I think it comes down to, “What can I control?” This is true at a personal and an organizational level. Where do I have the influence and control that allow me to ensure the results? Was I overly optimistic in setting those numbers? Was there any reality check on the expectations I’d set about market growth?

So, I’ve missed the first quarter, I’m going to course correct. And by the way, I’ve done the difficult thing; I’ve asked to have the numbers changed, brought down for the second quarter, because that’s looking just as bleak for all sorts of reasons. If I then miss that one, then there is a problem. Go back to what makes a great leader — you’ve got to deliver your numbers.
But what can I be doing differently? Most companies, you might get a third quarter, but you’re not going to get many more quarters missing the numbers, so there’s something fundamentally wrong. What is it, and how am I going to fix it? But trying to ignore it will not be the answer.

Maybe it’s a good time to bring in the story of Ron Johnson.

Ron Johnson is a fascinating story — not for him, it didn’t end well — but it’s a great way to think about, firstly, making CEO appointments, the risks of that, the halo effect of what happened around his appointment, and then how somebody who has very high belief in their abilities can completely misalign them to a different business.
Ron made his name as the head of marketing at Apple. That may not be his correct title, but let’s call it that; head of marketing. He is the man who created the Apple Stores. Phenomenal, absolutely phenomenal, no question about that. It was very revolutionary when it came out; the whole concept, the way it was presented, great design. Fantastic piece of work.
Unfortunately for him, he believed the rise of Apple was about the stores. The rise of Apple was about a phenomenal product. The stores certainly contributed to that, but it was not because of. He was hired to become CEO of JCPenney, a struggling retailer in New York. He was living in California. He was a first-time CEO, private equity-backed, and he chose not to relocate to New York, which ended up leaving a very big private jet bill for JCPenney — but that’s the end of the story.

So, he went in there and tried to Apple-ize JCPenney. This is not about marketing, but it’s a fascinating sales and marketing story as well. Fundamentally, the business sales went down 25% in the first 18 months. The market cap when from $17 billion to $13 billion in the same period, and he was fired. Not a glowing success, clearly. There are multiple reasons for the failure. Fundamentally, he shouldn’t have been appointed; he wasn’t qualified for the job in most people’s view. But then how he approached it and his belief he could replicate what he did at Apple at JCPenney was completely out of place. So, that’s a pretty dramatic failure.

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