SIX KINDS

CCL's research has distinguished six types of hardship events—mistakes and failures, career setbacks, personal trauma, problem employees, downsizing, and racial injustice. Here is a description of each, along with some examples of the kinds of lessons that can be learned from them.

Mistakes and Failures

According to a legend at IBM, in the early days of the company a promising young executive made a mistake that cost the company millions of dollars. Feeling guilty, embarrassed, and afraid, the executive was called into the office of Tom Watson Sr., IBM's president at the time. The executive offered to resign. Watson is reported to have said that he couldn't afford to have the executive resign because millions of dollars had just been invested in his education. Like that young executive, all managers make mistakes. Contracts are negotiated poorly, business deals go sour, opportunities are not seized, relationships with important clients are mismanaged, and bosses don't get what they want when they want it. The question is not whether mistakes will be made and failures experienced but whether they are seen as opportunities to learn, grow, and change. Agile learners use all their experiences, including hardships such as mistakes and failures, as opportunities to learn important leadership lessons. Blocked learners don't do this; they are often demoralized or even defeated by hardships.

Executives tend to learn from their mistakes when three conditions are present:

• Cause and effect are very clear to the individual involved. If people are unsure of their responsibility for the mistake or feel they couldn't have done anything to prevent it, few lessons will be learned. However, if cause and effect are clear—if people know they are culpable and responsible for the mistake—the chances are greatly enhanced that lessons will be learned.

• The mistake is openly acknowledged. It is easy to downplay mistakes, pretend they didn't happen, and deny their consequences. It is harder to put the mistake on the table, discuss it openly, and learn from it. But discussing a mistake honestly and openly is the best way for leaders to assess their contribution to the mess and learn from it—and it's the only way to encourage broader organizational learning.

• The organization's position on how mistakes will be treated is clearly understood. The best way to view mistakes is as opportunities for learning. Many organizations encourage appropriate risk-taking behavior as a way of becoming more innovative, but few have clearly defined how they will help individuals learn when the inevitable mistakes are made. Likewise, companies often encourage high-potential employees to accept “stretch” assignments—jobs for which they are not fully prepared—and yet the companies' response to mistakes is often punitive—which of course creates a disincentive for other high potentials to take risks. The best way for companies to show they mean what they say about risk taking is to implement a system for dealing with and learning from mistakes.

Career Setbacks

A woman who had been identified as a high-potential manager in her organization rose very quickly, completing one challenging assignment after another. She was on a fast track. Then a promotion she had expected went to someone else. The woman had experienced one of four types of career setbacks: a missed promotion. The other three are an unsatisfying job, a demotion, and being fired.

Many people who experience a career setback feel a loss of control, especially control over their careers. For others it is loss of self-efficacy—a sense that they might not measure up in certain critical skill areas and that they don't have the capacity to be effective leaders. Others, especially those who are fired, feel a loss of professional identity. Whatever the sense of loss, career setbacks are usually wake-up calls. They offer people a chance to learn how others perceive them. Executives who experience a setback may have already known they had weaknesses, but when the setback occurs they learn that others also recognize the weaknesses and that the weaknesses matter. They learn that without significant change in their skills and perspectives as leaders they can derail—if in fact they haven't already done so. For people who are open to learning, career setbacks are what could be called unfreezing experiences, opening them to new insights about their strengths and limitations and enhancing their readiness to learn from other developmental opportunities.

Another lesson leaders can learn from career setbacks is what kind of jobs they like and don't like. The reality check that comes with a setback often leads people to take stock of themselves. As they do, they learn what type of work is satisfying and meaningful to them, and they decide to take more responsibility for managing their careers and choosing work that is meaningful.

Learning positive lessons from career setbacks is aided by receiving support from significant others in the organization. If wounds are to be healed, an appropriate intervention, one that includes lots of listening and sorting of feelings, is crucial. Someone who is willing to take on the role of counselor or coach needs to work with the person.

However, in most organizations it is exactly at such times that an effective intervention is least likely to happen. The managers of those who have experienced a setback are often unable, unwilling, or lack the emotional intelligence to help the wounded person through the sense of loss.

Personal Trauma

An event or situation such as illness, death of a loved one, divorce, or being the parent of a troubled child can be a powerful developmental experience. No one would ever choose to go through a personal trauma, but powerful and enduring leadership lessons can often be gained from such experiences.

One CEO said that her deepest learning experience came when she was diagnosed with and treated for cancer:

I can look back now and say it was one of the defining experiences in terms of my life and career. It taught me several lessons: it taught me that you do have more strength and resilience than you think you have.

Studies of those who have survived extreme trauma show that their ability to endure and bounce back depended on their ability to create meaning from the experience, maintain their self-esteem and dignity, and have a sense of group belonging and of being useful to others. The key point is that their responses to the experience were far more significant than the experience itself.

Problem Employees

Difficult employees come in many guises. Those who are most obvious—people guilty of theft, fraud, or deceit or whose work is clearly below standard—are not the hardest to deal with. Company policies and common sense provide a ready solution for them. The hardest situations to manage are those in which the appropriate response is not clear-cut.

Take for example an employee whose behavior is inconsistent. When he is “on” he is one of the best workers in the company—charming and competent. But when he is “off” he is serious trouble—deceptive and manipulative, doing things he knows are wrong and trying hard to cover his tracks.

What should his manager do? The employee is clearly talented, with important skills and abilities that the company needs. Most managers would want to develop the employee and shore up the downside rather than fire him. So the manager might spend an inordinate amount of time talking with the employee—influencing, coaching, and even cajoling him. The manager might persist in thinking that if he or she just worked hard enough, well enough, and long enough, the situation could be turned around. Some executives have reported working with problem employees for several years before moving them to a more suitable position or, as a last resort, firing them.

What can leaders learn from these situations? They can learn about the importance of standing firm, being forceful, and confronting problem employees. They can also learn from the sense of loss they experience when dealing with problem employees. It's often the loss of an illusion—for instance, that the leader could in fact turn the situation around. From this disillusionment individuals learn humility and their limits. Understood in this way, disillusionment is a good thing.