Chapter Fifteen

Various bromides greet us amid losses regarding how we must squeeze the lemons of life into lemonade. For leaders, however, life's adversity can turn hard-earned assets into monumental barriers to recovery. Leaders can enjoy such resources as great popular recognition, vast networks of supporters, and gushing pools of finances. Yet celebrity, popularity, and wealth do not insulate them from fate.

There is no cruise control for leaders to coast on the momentum of recent triumphs. Today's evidence of good fortune could evaporate with tomorrow's events.

This point is dramatized well for us in the headlines. Professors Warren Bennis and James O'Toole properly celebrated the proven leadership strengths of AT&T CEO C. Michael Armstrong for his two and a half years of turnaround efforts to build the biggest cable television operation and a powerful wireless division while demonstrating his passion for his work and his employees. They wrote in the May-June 2000 Harvard Business Review, “His direct reports will tell you of his warmth. How natural it is to follow him. And they will tell you how he transformed AT&T from a moribund giant into a nimble competitor” (p. 172).

Unfortunately, the very day that issue hit the newsstands, the New York Times tore into Armstrong following a day of shockingly bad financial performance, “It was the worst day for AT&T's investors in more than a dozen years and Mr. Armstrong probably had not had such an unpleasant professional experience since he took over the company…. AT&T simply has not been able to escape its deteriorating legacy … and is running out of chances with impatient investors who are hoping that AT&T's future is now” (Schiesel, 2000, p. C-1).

This review does not mean that Bennis and O'Toole were necessarily hasty in their celebration of Armstrong. Quite the contrary, the skills they identified may be just the tools needed for recovery. Clearly the reported loss of faith in Armstrong was a professional and personal disappointment for him. How he embraces such a setback will help determine his genuine heroic qualities.

Former president Jimmy Carter challenged a group of CEOs at one of my conferences to consider how they would recover if the American public had fired them. Despite failing to be reelected, Carter continued tirelessly in his humanitarian, public health, and diplomacy missions, heavily promoting democratic reform around the world, and has become revered by virtually all as the greatest former U.S. president. Leaders should not be measured by how they bask in the gratification of their accomplishments. Rather, they should be measured by how they respond when fate deflates the joys of hard-earned triumphs. How well do they pick themselves up and get back in the race?

Creating Triumph from Tragedy

This quality of resilience is critical in the lives of creative figures such as leaders and artists. The rise, the fall, and the recovery of both leaders and artists face common stages. Otto Rank (1932) was one of the first to link these extraordinary contributors. He suggested that their accomplishment was the consequence of a shared, superhuman urge to create fueled by a heightened quest for immortality.

Artists and leaders were similarly considered in Howard Gardener's (1998) book Extraordinary Minds. He proposed a set of traits shared by “influencers”—those truly great historic figures across professions. After studying such creative figures as Wolfgang Mozart, Virginia Woolf, Sigmund Freud, and Mahatma Ghandi, Gardener concluded that rather than actual base intellect, lucky circumstances, or even indefatigable energies, these figures possessed powerful skills at candid self-assessment of strengths and weaknesses, keen situational analysis, and the capacity to reframe past setbacks into future successes. A defeat merely energizes them to rejoin the fray with greater ardor. It is not the proportion of their losses that differentiates these “influencers” from the rest of us, it is how they construe their losses.

In teaching Harvard MBA students through their early career planning, I came to read over a thousand sixty-plus-page self-assessment papers. What was most stunning in this task—and what kept me wide awake through the late night, early morning pain of grading—was their remarkable self-awareness and their desire to confront horrible life tragedies as learning experiences. Whether the setbacks had been abusive parents, thieving business partners, deceptive romantic entanglements, false accusations, or even witnessing and explaining to mourners the catastrophic loss of innocent life during Peace Corps missions, these aspiring leaders saw some redemptive value in their experience.

It is, in fact, wrong to consider adversity a diversion off one's path toward greatness. The subsequent resilience from calamities has been revealed as vital to the character formation and differentiation of heroic figures. Anthropologist Joseph Campbell (1949) studied, across cultures and eras, religious and folk heroes such as Jesus, Moses, Mohammed, Buddha, Cuchulain, Odysseus, Aneas, and the Aztec Tezcatlipoca, and discerned a universal “monomyth” of the life stages of these heroes. One stage involved a call to greatness, which led to a separation from one's past to realize superhuman talent. This is followed by a series of continual trials and ultimately profound setbacks that are met with eventual triumph and reintegration back into society.

The apparent losses were reconstructed into assets. These visionary leaders were able to inspire others to join them through their own sagas of redemption. They gained the confidence for transformational leadership, in part, through their stunning transcendence over life's adversity.

Second Thoughts About Second Acts

Ironically, the very same assets of their past leadership, their renowned reputations and quest for immortal legacies, can become liabilities. My (1988) study of a generation of prominent CEOs leaving office revealed that reputation or heroic stature and the quest for lasting contribution or heroic mission can become daunting barriers. The loss of heroic stature compounds adversity because private losses are so public for these people. Literary scholar Leo Braudy (1986) suggested in his book, The Frenzy of Renown, that society generates a subset of people eager to live their lives in the public eye. They court fame and recognition in a grand fashion so that their prominence will allow them greater risk taking. These idiosyncratic credits come at a price. When a devastating career setback hits such superachievers, they feel greater shame because their loss of self-esteem, their loss of influence, and their loss of self-reliance are so very public.

In addition, seeing the passing of timely opportunities can be paralyzingly frustrating. The loss of heroic mission compounds adversity because the path to date has been so all-consuming that much else was sacrificed. Private dreams became public possessions, which were then cavalierly tossed away by an unappreciative, fickle society. F. Scott Fitzgerald's admonition that there are no second acts in American lives casts an especially dark shadow over the derailed careers of leaders and creatives.

Nonetheless, some do recover with their careers more ablaze than ever while others flame out into obscurity. Consider the resilience of John Irving, Mike Nichols, Robert Altman, Carlos Santana, and John Travolta against the retreats of Kurt Vonnegut, J. D. Salinger, Alan Jay Lerner, Judy Garland, and Orson Wells. Some were energized by their losses while others were forever haunted by the specter of their own early careers.

An examination of two recently departed prominent and wealthy fifty-eight-year-old California CEOs, profiled coincidentally in side-by-side articles in the New York Times, reveals how differently corporate leaders can also confront adversity. One article, “The Aftermath of a Powerful Chief” (Leonhardt, 2000), was an upbeat piece on former Hewlett-Packard CEO Lewis Platt's new life as a vintner running Kendall-Jackson Wine Estates—a workforce of 1,200 instead of his former 124,000. The adjacent article, “A General Whose Time Ran Out” (Barringer, 2000), conveyed the emotional outcry and frustration of Mark Willes, the CEO of Times Mirror, on his board's loss of faith in his strategy, and undermining him to sell the entire firm to media competitor, the Tribune Company of Chicago.

Platt, a popular engineer famous for his intelligence and honesty, was a thirty-three-year veteran of the “HP–Way,” known also for his reinforcement of the firm's widely admired core values about people, service, product quality, and citizenship (Fisher, 1993). He had succeeded John Young as CEO and the legendary cofounder David Packard as chairman in 1993. After a great start, however, revenue growth and product innovation were seen as slipping by 1999 due to slow responses to falling PC prices, declining Asian sales, and vast Internet opportunities (Burrows and Elstrom, 1999). He announced new e-commerce strategies and broad restructuring while suggesting to his own board that he be replaced. Today he is enthusiastic about getting his hands dirty with direct product responsibility in the winery.

By contrast, Mark Willes seemed to many to be at war with the culture he had inherited at Times Mirror when he arrived from General Mills in 1995 (Alexander, 2000). He declared unattainable circulation goals and flouted journalistic conventions about the independence and objectivity of editorial versus commercial aspects of the papers. While this sparked a revolt by the Los Angeles Times's journalists, ultimately he was undermined by his own chief financial officer, Tom Unterman, who negotiated with the Times Mirror board and the Tribune Company behind Willes's back. He emotionally addressed his employees the day the deal was announced lamenting the personal disappointment that he was not given the time to prove his strategies (Bannon and Deogun, 2000).

Bernstein and Bennis as Models for Leadership Resilience

The parallel lives of famed musician Leonard Bernstein and management scholar Warren Bennis provide complementary examples of career resilience and continuous creative contribution through late career. Their lives, in parallel universes, both crossed between teaching, performance, creation, and management. Bennis has written in his book Organizing Genius that Great Groups require Great Leaders. Bernstein, by all counts, was a visionary leader as music director of the New York Symphony, who always maintained his accessibility to all around him—never letting anyone refer to him imperiously as maestro. Bennis, as a college president, also avoided the trappings of hierarchy of authoritarian traditions, preferring instead to have open office hours for all in his community. These leaders, in turn, often require great acts of resilience.

The Call to Greatness

Having gotten to know both of these remarkable individuals, Bernstein at Harvard in 1973 over lunches before his Charles Eliot Norton Poetry Lectures, and Bennis in collegial circles and as a personal mentor since the early 1980s, I say with certainty that we should consider Warren Bennis the Leonard Bernstein of the management world and Leonard Bernstein the Warren Bennis of the music world. Seven years apart, both grew up as the sons of pragmatic Jewish merchants distant from the intellectual and aesthetic worlds that intrigued their sons. Bernstein was born in Lawrence, Massachusetts, to a beauty supply jobber who wanted his son to enter the business. Bennis was born in Westwood, New Jersey, to a soda stand and candy store operator who wanted his son to learn a skilled trade. Both had families who moved often during their early childhood, and they had few friends.

Early in their childhood, they distanced themselves from their surroundings and began to reinvent who they were. Bernstein changed his name from Louis to Leonard and demanded music lessons at age ten when a divorced aunt stored her upright piano in their home. He never heard a live symphony orchestra until age sixteen. Bennis found, at age fourteen, he could escape his origins by giving a compelling talk to his class about a hobby he had invented out of his imagination.

The Early Trials and Jedi Mentoring

During the 1940s, each of these men acquired both a taste of greatness and a strong bond with mentors who inspired them as leaders and even as Jedi-like surrogate fathers. In 1940, Bernstein met Boston Symphony Orchestra's conductor Serge Koussevitzky while studying at the orchestra's newly created Tanglewood summer institute. He later became Koussevitzky's conducting assistant, protégé, and lifelong friend. On November 14, 1943, Bernstein, as an assistant conductor for the New York Philharmonic, was asked to substitute on a few hours notice for the world-renowned Bruno Walter, who was too ill to conduct a major concert. The concert was broadcast nationally to enthusiastic critical acclaim, and his prominence was launched.

In 1944 Bennis was the youngest infantry officer in the European Theater of Operations of World War II. There he met an Army captain—an inspiring leader who taught him the virtues of listening and patience that modeled many of the leadership qualities that he would appreciate just after the war at Antioch and MIT with his bold creative mentor Douglas McGregor. McGregor's “Theory Y” views on human development and leadership influenced Bennis's work.

Educating and Promoting Others

Both were profoundly influenced by their years in university life in Cambridge, Massachusetts, where they launched professional friendships and pioneering approaches to their fields. Bernstein at Harvard began a lifelong friendship with composer Aaron Copland and two other aspiring composers, Roy Harris and William Schuman. He became a leading advocate of American composers, particularly Copland. While studying under such greats as Walter Piston and New York Philharmonic Music Director Dimitri Mitropoulos, he also discovered the joy in teaching from the young musicians at his renowned master classes at Tanglewood to his fourteen seasons of televised Young People's Concerts with the New York Philharmonic.

At MIT and Harvard, Bennis began collaborations with fellow organizational development pioneers and social scientists like Douglas McGregor, Edgar Schein, Herbert Shepard, Richard Beckhardt, David Berlew, Charles Handy, Kenneth Benne, Philip Slater, and Ted Mills. He shared the group's collective skepticism over authoritarian leadership and rigid bureaucracy. His early work on temporary organizations, group dynamics, the more mobile workforce, and the convergence of knowledge and power was shockingly prescient and his writings remain current. It was also at this time when Bennis discovered his fascination with teaching new managers around the world. Bennis too has been a devoted and selfless mentor, like Bernstein, to many young professionals who have chosen to follow his path.

Crossing Boundaries

Bernstein and Bennis also shared a determination to live in multiple worlds. Far from slowing down as age advanced, they both increased their range and pace of activities. Bernstein was devoted to a hydra-headed definition of his careers. During his high-profile career he was a leader in a dozen fields including symphonic music, Broadway musicals, the ballet, films, and television. He wrote the popular scores for the film On the Waterfront and such musicals as On the Town, Peter Pan, Wonderful Town, Candide, and the smash hit West Side Story. His symphonic works included Kaddish, Mass, and Symphony #1 Jeremiah (coincidentally the prophet Bennis chose to discuss in his bar mitzvah speech). A dedicated teacher of rare communications skill, Bernstein regularly had to fend off critics who insisted he was spread too thin. Defending his restless and fruitful life he explained, “I don't want to spend my life, as Toscannini did, studying and restudying the same 50 pieces of music. It would bore me to death. I want to conduct. I want to play the piano. I want to write for Hollywood. I want to write symphonic music. I want to keep on trying to be, in the full sense of that wonderful world, musician. I also want to teach. I want to write books and poetry. And I think I can still do justice to them all” (Henahan, 1990, p. A-1). At his Norton Lectures at Harvard, he stressed that the best way to know a subject is in the context of other external subjects.

Bennis similarly explained his interest in writing for multiple audiences beyond pure scholars alone as well as to try his own hand as an institutional leader, as a provost and a university president, stating (in the chapter that forms the Postlude to this book), “I was tired of being Montaigne in the bleachers…. I wanted to be bold in the arena, to see if my written words could be embodied in the practitioners' world where deeds more than words counted…. Related to that, I suppose, is what all composers or playwrights must desperately want, getting their work performed, realized. How would a composer know how the music sounds without hearing it; how would a playwright know how the scenes actually play without seeing and hearing them.”

Resilience Through Rededication and Support of Others

Both Bernstein and Bennis, however, had their share of setbacks. In 1950, Bernstein wrote a one-act opera called Trouble in Tahiti that was not popular. He immediately teamed up with Adolph Green to create Wonderful Town, which returned him to success at the same time that he was becoming a music professor at Brandeis and conducting on tour with Koussevitzky. While Candide in 1956 was not very successful, the premier of West Side Story a year later created some of the nation's most moving and lasting popular music, for which he will be most remembered. Bernstein's long-anticipated work with Alan Jay Lerner, 1600 Pennsylvania Avenue, closed after seven performances in 1976 (Hurwitz, 1989). Nonetheless, his friend and collaborator, the playwright Arthur Laurents (2000), claimed that the only time he saw Bernstein defeated was when he was bedridden two months before his death.

Another friend, Ned Rorem, recalled Bernstein saying, “The trouble with you and me Ned is that we want everyone in the world to personally love us and of course that's impossible. You just don't meet everyone in the world” (Bennis, 1993, p. 32).

Ironically, Bennis has cited that same Bernstein exchange in reflecting on lessons from his own setbacks. Bennis left a full-tenure professorship at MIT to become provost at SUNY Buffalo, joining Martin Meyerson as president in launching an educational revolution. They failed. “We were sure that in this academic Great Good Place, creativity would count for more than traditional training and ordinary credentials…. Examining what went wrong at Buffalo altered forever the way I think about change. Martin Meyerson has the first thing every effective leader needs—a powerful vision of the way the organization should be…. But unless a vision is sustained by action, it quickly turned to ashes. The Meyersonian dream never got out of the administration building…. At Buffalo, we as newcomers disregarded history” (Bennis, 1993, p. 34).

Similarly at the University of Cincinnati as president, at age forty-three, he felt he learned some profound lessons, “Similarly my writing had implied a rather simple model of change, based on gentle nudges from the environment coupled with a truth-love strategy; that is, with sufficient trust and collaboration, along with knowledge, organizations would progress monotonically upwards and onwards along a democratic continuum…. You had to adhere simultaneously to the symbols of tradition and stability and to the symbols of revision and change. I was seen by many constituents as emphasizing the latter and tone-deaf to the former” (Bennis, 2000).

At the end of a speech at Harvard, he credited Dean Paul Ylvisaker with asking him if he still loved what he was doing. Realizing that he preferred the personalized power of a professor's voice to the positional power and minutiae of administration, Bennis accepted an invitation from James O'Toole of the University of Southern California and returned to academia to produce an extraordinarily productive portfolio of insights into leadership, making him the true intellectual dean of leadership study.

Both Bernstein and Bennis demonstrated five critical lessons for the recovery of great leaders. First, they believed in fight and not flight; they acknowledged and redirected the stress they faced. Second, they recruited others into battle with them for perspective. Third, they rebuilt their heroic stature by openly discussing the nature of their adversity. Fourth, they proved their mettle to regain trust and credibility; they plunged into their work deeper to produce even greater works. Fifth, they rediscovered their heroic mission; they cleared their past and charted a new future through the continuous reinvention of themselves.

Fight Not Flight: Acknowledging and Redirecting the Stress

We have long known that career distress can be one of the greatest sources of life stress (Cooper and Payne, 1988). Being fired, for example, has been ranked as number eight among the most stressful events in life—just after death of family members, jail, and personal injury or illness (Holmes and Rahe, 1967). Loss of title and social role ambiguity are powerful workplace stressors as well (Cooper, 1983; Golembiewski, Menzenrider, and Stevenson, 1986). Although the psychological and physiological symptoms of chronic stress can have a profoundly corrosive effect, many of the bromides of our therapeutic society are not appropriate stress responses for many creative individuals and leaders. Stress is the perception of helplessness in dealing with serious demands. There is no such thing as objective stress existing on its own. We only stressfully respond to people, places, and events, our response dependent upon our perceptions of the adequacy of resources to deal with the stressors (Matheny and Riordan, 1992).

Thus, since stress is an interpreted phenomenon based on one's feeling of competence and strength, it is unlikely that the vacations and retreats so often prescribed will yield creative individuals the sense of potency and connectedness they require to feel back in control. Research on psychological hardiness in responding to stress suggests that victims must regain control, make commitments to external events, respond to challenges, be willing to take a radical approach, and essentially become blind to their fears (Kobassa, 1979; Maddi, 1968). Coping with stress does not mean accommodating and accepting the stress. Often victims are encouraged to reduce the importance of stress through denial, avoidance, projection, and withdrawal or else to reduce the effects of stress through exercise, diet, meditation, and support groups, but it is also worthwhile to examine ways of reducing the source of the stress, perhaps through direct confrontation (Schuler, 1984).

Henry Silverman, the CEO of Cendant, was once a Wall Street darling, a dazzling deal maker, building a company called Hospitality Franchising. He assembled such brands as real estate brokerage Century 21, Ramada Hotels, Howard Johnson Hotels, Days Inns, and Avis Rent-a-Car to yield 20 percent plus growth rates and soaring stock prices. The stock jumped from 4 in 1992 to over 77 before the scandal hit. Following a presumed masterstroke merger with a direct marketer called CUC that led to the firm's renaming to Cendant in late 1997, his empire and reputation unraveled. A series of investigations revealed massive improprieties in the former CUC that led to inflated earnings of $700 million over three years. The subsequent stock meltdown cost roughly $13 billion in market capitalization.

Silverman, the son of the CEO of a commercial finance company, had been driven to emerge from the shadow of his father's success. “You want to be recognized for what you achieved rather than what your parents achieved” (Barrett, 2000, p. 130). After high-profile work with notorious corporate raiders and gilded investment bankers, Silverman had become a legend through his own empire building as well. In the wake of the CUC scandal, his diligence and management style came under attack. The anger and humiliation ate away at him. For Silverman, the personal toll was heavy. “My own sense of self-worth was diminished,” he recalls.

Following suggestions from a psychiatrist he consulted a few times, Silverman found ways to direct his rage. He became a workout enthusiast, going to the gym daily with rigorous aerobics, tennis, and weightlifting. In a year, his bench press weight rose from 65 to 150 pounds. Such sublimation, however, was not sufficient for him—he was driven to regain his credibility. He clarified who he believed the villains to be as government investigators began their probe. In the meantime, Silverman replaced all of CUC's leadership and sued its accountants, Ernst & Young. To not have to constantly relive the situation, he and his family curtailed their social life, withdrawing to the comfort of friends such as financiers Leon Black and Darla Moore. Silverman sold non–core businesses to repurchase 20 percent of the outstanding shares to boost the stock price. He began eyeing smaller acquisitions, and finally, he began to form alliances with firms like John Malone's Liberty Media, building credibility and driving e-commerce traffic for his service businesses.

Recruit Others into Battle: Concern for the Collateral Victims

In addition to feeling the need to redeem himself before shareholders, Silverman felt responsible for the ways his situation affected his family, his coworkers, and his friends. His efforts to bring others into his campaign are not unusual.

By enlisting the assistance of others, it is possible to attend to the needs of the innocent bystanders who suffer from the victim's career crisis. This helps to show appreciation for and replenish the resources of one's support system, maintaining the system that is critical to coping with the stress. This reinforcement from trusted advisers is also of great value for candid feedback. Gardener's (1998) observation that resilient exceptional people have a talent for self-awareness is true, in part, because these people energetically use personal networks in both their ascent and in their recovery from setback. The trusted advisers the victim consults help through more than consolation alone; they hold up a candid mirror for self-reflection and help brainstorm the range of next steps.

Perhaps no leader's recovery from setback is more inspirational than that of Bernard Marcus, chairman of Home Depot, and his cofounder and current CEO, Arthur Blank. In 1978 Sandy Sigoloff, the CEO of their then-parent company, Daylin, fired them as the leaders of Handy Dan's Home Improvement Stores. Sigoloff, a tough turnaround manager, was often referred to as “Ming the Merciless.” Marcus explained in his book that what motivated Sigoloff was that

While Marcus believed that he was the prime target of Sigoloff's wrath, when he was dismissed, so were his top lieutenants Arthur Blank and Ron Brill, in separate rooms and in rapid succession. “Ron, like Arthur and me, never knew what hit him.” Sigoloff released a statement to the press at Friday afternoon's deadline so that the newspapers would promptly run the story. Marcus explained, “But it was far worse than just the loss of a couple of well-paying, high-profile jobs, or a few embarrassing news paper stories. Sigoloff was primarily after me; for Arthur and Ron, it was more a matter of guilt by association. We all had painful experiences telling our family and friends what happened” (Marcus and Blank, 1999, p. 34).

Marcus charged that subsequent to this termination, Sigoloff tried to vilify the victims further by suggesting to the authorities retrospectively that there had been some infractions in labor-organizing efforts. Marcus and Blank (1999) say these allegations were trumped up and never found to have merit by the authorities but invented to humiliate and wound them sufficiently to keep them from fighting back.

Now, however innocent, Marcus had his loyal coworkers with him. Another close friend, the financier Ken Langone, joined him, saying, “This is the greatest news I have heard…. You have just been kicked in the ass with a golden horseshoe” (Marcus and Blank, 1999, p. 37). Langone encouraged Marcus then to open the novel sort of store he had dreamed of and offered to help Marcus. Similarly, when he confided in his friend Sol Price, cofounder of the Price Club, he found feedback beyond solace. Price asked Marcus if he believed he had talent and if he thought that he had “the ability to build something, to create, do you feel good about yourself?” (Marcus and Blank, 1999, p. 40). He then realized for certain that it was time to get on with his life.

These colleagues and friends believed in Marcus and joined him in battle, encouraging many others to join as well. The stores he envisioned were immense warehouses for do-it-yourself home repair enthusiasts, with greater selection, superior customer service, a highly trained staff, and direct purchasing from the manufacturer. The group relocated from Los Angeles to Atlanta and opened their first store in 1979. By 1990 they had 17,500 employees with sales of $2.7 billion; today, Home Depot has sales of $35 billion and 160,000 employees. It has roughly eight hundred superstores with each store stocking more than forty thousand types of home improvement supplies. The founders have stayed together to become some of the wealthiest people in the world. They still rally around the motto born in crisis, “We Take Care of the Customer and Each Other.”

Rebuild Heroic Stature: Spread the True Nature of the Adversity

Thus we see that Bernie Marcus did not just take up with sycophantic supporters to assuage his hurt. Instead, his friends and colleagues challenged him, inspired him, and joined him. Great leaders acquire a heroic persona that gives them larger-than-life presence. When that is removed, the audience disappears, the coworkers are no longer around, and leaders can lose their identity. They are not comfortable merely being one of the crowd. Great leaders like great artists develop a personal dream that they offer as a public possession. If it is accepted, they become renowned, but should it ultimately be discarded, they suffer the loss of both a private dream and a public identity. As people rallied around Marcus, they allowed him to regain his familiar role. They rallied because they still believed in him and in his heroic identity. They were able to rally because Marcus told them the truth and gave them something to believe in. When a hero stumbles, the constituents are confused as to how that happened given the larger-than-life presence the hero held.

Just as Marcus took his story to friends, investors, employees, and now to countless readers, so have others who have discovered the need to repair their armor. John Eyler, the chief executive of Toys “R” Us and previously of FAO Schwarz, was terminated at a large clothing retailer on Christmas Eve. He feels what was critical to his resilience was that he did not let the situation define him to others, because if it did, “I might have started to doubt myself as well.” Scholars of reputation management have long recognized the value of reputation as a corporate and a personal asset. It is built through experience, performance, and affiliations (Fombrun and Shanley, 1990; Staw, McKechnie, and Puffer, 1983; Elsbach and Sutton, 1992).

New accounts that one circulates must embrace several critical elements for successful image restoration: clear denial of culpability, or a shift in responsibility for the mishap; reduction of the offensiveness of the act; the appearance of reasonableness of behavior (Jones and Nesbitt, 1971); and acceptable motives (Scott and Lyman, 1968). Marcus's explanation of the Handy Dan termination easily satisfies these dimensions.

Yet another great retailer, Leonard Roberts (CEO of Radio Shack Corp.), was fired previously as CEO of Shoney's restaurants. Known throughout his life as a maverick, he married at age seventeen while in high school and became a father at nineteen. He gained several food processing patents and a law degree. In 1985, Roberts left as head of the food service division of Ralston Purina to become CEO of the troubled Arby's roast beef restaurant chain. Roberts engineered a profound turnaround there through a combination of team management, aggressive marketing, and new product development. In 1989, he left behind a difficult controlling owner who faced his own legal challenges to run the $1.5 billion Shoney's chain of 1,600 restaurants. Roberts produced dramatic improvements in customer service and franchise relations. Store design, purchasing, and marketing were overhauled quickly. In three years, Shoney's profits went from $15.5 million to over $50 million.

Yet Roberts was the first CEO to be recruited from the outside and some see his exit as a political revolt of the old guard against Roberts's style (Romeo, 1993). The Wall Street Journal, however, carried a report that some board members felt Roberts had gone too far with his affirmative action efforts just six weeks after Shoney's settled a $105 million racial discrimination lawsuit. The founder, Raymond Danner, is said to have told one manager, “You've got too many niggers here. If you don't fire them, I'll fire you” (Pulley, 1992, p. A-1). Roberts was unable to offer public comment as part of his $2.9 million severance package but word of his skills got around. Some recruiters thought that his battle at Shoney's made him too controversial. However, when in 1994 Tandy CEO John Roach went looking for a successor, he was so impressed with Roberts's courage as well as his general management skills that he made Roberts, a lifelong restaurateur, president of the seven thousand–store electronics retailer. In 1998, Roberts succeeded Roach, and has pioneered creative store-within-a-store partnerships with suppliers like Sprint, RCA, Compaq, and Microsoft (Palmeri, 1998).

Proving Your Mettle: Regaining Trust and Credibility

Artists and performers need audiences for their work, but they often find others controlling access to potential viewers. Regularly, actors hear that they are too old, musicians that they are passé, and artists that galleries will no longer present their work. Similarly, even chief executives face gatekeepers to showcase their skills.

Tarred with the brush of controversy and the ready pool of rising stars, it is easy to be cast aside as last year's model. After setbacks, leaders have had to demonstrate that they still have the skills that made them great. Roberts, Marcus, and Silverman all eagerly jumped back into action to prove they retained the talents that built their careers.

The name Trump could easily have gone the way of other real estate titans of the 1980s, such as the Reichmann brothers and Robert Campeau. Donald Trump joined the family real estate business after graduating from Wharton in 1968. In his twenties he was already considered New York's paramount developer, his name whispered in the same breath at the legendary William Zechendorff. At the age of thirty-six he put up his Trump Tower, the tallest, most expensive reinforced concrete structure in the city. Trump's name appeared garishly on his building projects, but by 1990, he was caught in a real estate crunch with a crushing $975 million debt (Rutenberg, 1996).

A few years later, his net worth was reportedly back to $3.5 billion, his casinos were booming, and he was wheeling and dealing in real estate development just like before. Both he and financial analysts consider the resurgence of his Atlantic City casinos, Trump Plaza, the Taj Mahal, and Trump's Castle, as the source of his comeback (Thomkins, 1994). In addition to the disposal of personal assets, however, he made his much-derided ego and celebrity a bankable asset. His 1997 book, The Art of Comeback, was a proud follow-up to his brazen Art of the Deal from a decade earlier. With $7 billion in sales and twenty-two thousand employees, his empire has continued to grow. He has acquired the GM Building and half of the Empire State Building, and is building the world's tallest residential building (scheduled for completion in 2000), the ninety-story Trump World Tower.

Even more impressive a comeback is that of the 1980s iconic financier, Michael Milken. Many have seen Milken's life as the essence of American myth. He was born on the Fourth of July 1946 to a modest California family, and by the mid-1980s, he was a billionaire and one of the most influential investment bankers in the world. He bypassed Wall Street snobs by building the moderate-sized, stodgy Drexel Burnham Lambert into the capital of high-yield (junk bond) debt. By 1987, the value of junk bond debt rose from almost nothing to about $200 billion. The Justice Department's investigations, led by Rudolph Giuliani as U.S. Attorney, led to Milken's plea of guilty to six breaches of securities law. He was fined over $1 billion and sent to prison for two years, his reputation shattered—a lifetime ban prevents his return to the securities business. Many of the institutions holding the junk bonds went into financial distress. This negative press overwhelmed the image of the enterprises junk bonds helped create, such as CNN, FedEx, and MCI. To make matters worse, soon after leaving prison, Milken was told he had prostate cancer and had eighteen months to live.

Nonetheless, Milken is alive and well. His cancer is in remission and he has written several cookbooks for fighting cancer through diet. He is growing a cradle-to-grave-learning company he founded in 1997 with his brother and Oracle chief executive, Larry Ellison. He has a consulting firm called Nextera and funds an economic institute called the Milken Institute. His CaP CURE charity has raised over $63 million for research into prostate cancer.

Milken was unwilling to wallow in grief, to accept any of the externally imposed constraints on his desire to create and regain prominence. As he returned to demonstrate his business acumen, old and new partners rushed to join him.

Rediscovering the Heroic Mission: Clearing the Past and Charting the Future

The quest for immortality that drives artists and leaders requires that they see a lasting legacy through their work. Even more than the externally imposed barriers that confront exceptional people after setbacks are the self-imposed barriers of shattered confidence or a lack of replenishment of their ideas and their energy. In many of the cases discussed here, this meant lowering the image of where they left off. Marcus and Milken had to start over from scratch. Silverman and Trump had to rebuild their own wrecked empires, while Roberts assumed a challenging environment that required learning new skills.

Michael Bozic, now the vice chairman of Kmart, found that a career crisis can be liberating. In 1990, he was thrown out of the chief executive's throne of the Sears Merchandising Group—all that remains of Sears today—after twenty-eight years at the company. Many believed he had not been given full credit for his innovative triumphs at Sears such as his Brand Central merchandising concept, and in fact he was assumed to have taken a bullet for his boss, the chairman, Edward Brennan.

Following many months of job hunting, Bozic became CEO of Hills Stores, a bankrupt discount retailer in Canton, Massachusetts—quite a comedown from the world's largest retailer. After bringing Hills back from near death, Bozic lost control of the company in a wild proxy battle of competing value-investors (Rouvalis, 1995). Thus after a successful turnaround there, Bozic left for Florida to lead the turnaround at Levitz furniture. Bozic left for Levitz with his world-weary wit intact, announcing, “No good deed goes unpunished.” In November 1998, Bozic became vice chairman and CEO-contender at Kmart (Coleman, 1998).

In the world of communications, Michael Bloomberg has become a legend nearly overnight. He was fired as a Wall Street broker and went on to build one of the fastest-growing media empires in the world. His TV stations broadcast twenty-four hours a day to forty counties in seven languages. His radio networks, publishing empire, online businesses, and wire service approach a $2 billion empire with four thousand workers. He calls himself the David who challenged the Goliath of financial news. In 1981, Bloomberg was fired by Salomon Brothers, the elite investment bank and the only employer he ever had, where he had flourished for fifteen years. The night he was fired he bought his wife a sable jacket, saying, “Job or no job we are still players” (Bloomberg, 1997, p. 17). The next morning he settled down to work at his customary 7 A.M. to launch Bloomberg with his $10 million severance payment.

Finally, no reflections on resilience can be complete without acknowledging the fabled return of Apple founder Steve Jobs. At age thirty-two, two years after being forced out of the firm he created at age twenty-one, he founded Next with five devotees from Apple to build a powerful computer to be used in university instruction. He ultimately sold the company back to Apple for $425 million and persuaded the then–Apple CEO, Gil Amelio, to bring him back as a “consultant” as part of the deal. Jobs showed open disdain for Amelio around the office and derided many of his management team members (Carlton, 1997; Pollack, 1997). After Amelio resigned in July 1997, Jobs agreed to become interim CEO. He cut many of the projects he had inherited and introduced triumphant new products like the iMac, G3 desktops, and Powerbook laptops that helped increase Apple market share by 10 percent.

Not every accomplished, creative person can drop back and start anew. In his late twenties and thirties, Alan Jay Lerner wrote or cowrote great Broadway classics like Brigadoon, Paint Your Wagon, Gigi, My Fair Lady, and Camelot. By his fifties and sixties, he felt his creative genius suffocated by his own creations. “The older a writer gets, the harder it is for him to write. This is not because his brain slows down; it is because his critical faculties grow more acute” (Freedman, 1986, p. 1).

It was not his public that held Lerner to punishing standards, it was himself. In contrast, many we have profiled optimistically believe what Nietzsche said, “what does not destroy me, makes me stronger.” Through heavy life demands, these exceptional people are actually strengthened rather than weakened by triumphing their adversity.

When Bad Things Happen to Good Leaders: Final Thoughts for Future Heroes

It has been observed that if you want to be successful in life, you should first select great parents. Much of life is out of our control. Rising leaders, however, can anticipate that they will experience a wide array of life's adversity. The nature and timing of setbacks will never be convenient. The costs may include derailed career momentum, personal humiliation, the draining of finances, strained personal health, the shattering of personal dreams, and the suffering of innocent family and associates.

At the same time, these occasions of distress are potentially clouds with silver linings. It is through such loss that we often discover what we truly value. It is through such loss that we discover whom we can really trust. It is through such loss that we reveal new dimensions of our own character. The heroic persona is one that emerges only through triumphant battle over sadness and adversity.

As new leaders see that their success spiral has just smacked into a wall, they should step back, catch their breath, and then embrace the obstacle itself as a fresh opportunity to meet unfamiliar challenges. At the same time, they must realize that their mission cannot be accomplished alone. They will need to draw on the full reservoir of their early career experiences and relationships. Once a devastating crisis hits it is too late to make friends, too late to establish professional credibility, and too late to build a reputation for integrity. As the French scientist Louis Pasteur intoned, “Chance favors the mind that's prepared.”