Firing Back: How Great Leaders Rebound After Career Disasters
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www.hbr.org The leader’s fall from “Who’s Who” to “Who’s that?” is full Firing Back of stigma and shame. But the How Great Leaders Rebound After Career story doesn’t have to end there. Disasters by Jeffrey A. Sonnenfeld and Andrew J. Ward Reprint R0701G The leader’s fall from “Who’s Who” to “Who’s that?” is full of stigma and shame. But the story doesn’t have to end there. Firing Back How Great Leaders Rebound After Career Disasters by Jeffrey A. Sonnenfeld and Andrew J. Ward Among the tests of a leader, few are more These stories are still the exception rather challenging—and more painful—than recov- than the rule. F. Scott Fitzgerald’s famous ob- ering from a career catastrophe, whether it is servation that there are no second acts in caused by natural disaster, illness, misconduct, American lives casts an especially dark shadow slipups, or unjust conspiratorial overthrow. over the derailed careers of business leaders. In But real leaders don’t cave in. Defeat energizes our research—analyzing more than 450 CEO them to rejoin the fray with greater determi- successions between 1988 and 1992 at large, nation and vigor. publicly traded companies—we found that only Take the case of Jamie Dimon, who was fired 35% of ousted CEOs returned to an active exec- as president of Citigroup but now is CEO of JP- utive role within two years of departure; 22% Morgan Chase. Or look at Vanguard founder stepped back and took only advisory roles, gen- Jack Bogle, who was removed from his posi- erally counseling smaller organizations or sit- tion as president of Wellington Management ting on boards. But 43% effectively ended their but then went on to create the index fund and careers and went into retirement. become a leading voice for governance reform. What prevents a deposed leader from com- Similarly, there’s former Coca-Cola president ing back? Leaders who cannot recover have a Steve Heyer, who was surprisingly passed over tendency to blame themselves and are often for the CEO position at Coke but then was tempted to dwell on the past rather than look quickly named head of Starwood Hotels. Most to the future. They secretly hold themselves re- colorful, perhaps, is Donald Trump, who recov- sponsible for their career setback, whether ered from two rounds of financial distress in they were or not, and get caught in a psycho- his casino businesses and is admired today both logical web of their own making, unable to as a hugely successful estate developer and as a move beyond the position they no longer hold. producer and star of popular reality TV shows. This dynamic is usually reinforced by well- OPYRIGHT © 2006 HARVARD BUSINESS SCHOOL PUBLISHING CORPORATION. ALL RIGHTS RESERVED. OPYRIGHT © 2006 HARVARD BUSINESS SCHOOL PUBLISHING CORPORATION. C harvard business review • hbr.org • the tests of a leader • january 2007 page 1 Firing Back meaning colleagues, and even by family and peace between Israel and Egypt through the friends, who may try to lay blame in an at- Camp David Accords—postelection, Carter tempt to make sense of the chaos surrounding needed to move past his sense of frustration the disaster. Sadly, their advice can often be and rejection, particularly his failure to secure more damaging than helpful. the timely release of the American hostages In every culture, the ability to transcend in Iran. life’s adversity is an essential feature of becom- Despite his pain and humiliation, Carter did ing a great leader. In his influential 1949 book, not retreat into anger or self-pity. He realized The Hero with a Thousand Faces, anthropolo- that his global prominence gave him a forum gist Joseph Campbell showed us that the vari- to fight to restore his influential role in world ous stories of great leaders around the world, events. Accordingly, he recruited others into in every culture and every era, are all essen- battle by enlisting the enthusiastic support of tially the same story—the “hero myth.” This his wife, Rosalynn; several members of his ad- myth is embodied in the life stages of such uni- ministration; academic researchers in the sci- versal archetypes as Moses, Jesus, Muhammad, ences and social sciences; world leaders; and fi- Buddha, Aeneas, Odysseus, and the Aztecs’ nancial backers to build the Carter Center. He Tezcatlipoca. Transformational leaders follow proved his mettle by refusing to remove him- a path that entails a call to greatness, early suc- self from the fray. Indeed, he continued to in- cesses (involving tough choices), ongoing trials, volve himself in international conflict media- profound setbacks, and, ultimately, triumph as tion in Ethiopia and Eritrea, Liberia, Haiti, they reintegrate into society. If Campbell were Bosnia, and Venezuela, demonstrating in the writing today, he might want to include busi- process that he was not a has-been. He re- ness leaders in his study, as they must confront gained his heroic stature when he was awarded similar trials on their way to greatness. the Nobel Peace Prize in 2002 “for his decades This article is intended to help leaders—or of untiring effort to find peaceful solutions to anyone suffering from an unexpected setback— international conflicts, to advance democracy examine their often abrupt fall from grace and and human rights, and to promote economic to give them a process through which they can and social development.” And he has rediscov- recover, and even exceed their past accomplish- ered his heroic mission by using the Carter ments. From our 22 years of interviews with Center to continue his drive to advance human 300 fired CEOs and other derailed profession- rights and alleviate needless suffering. als, our scholarly study of leadership, our con- Let us look now at how some great business sulting assignments, and our own searing per- leaders have followed the same path to recover sonal experiences, we are convinced that leaders from their own disastrous career setbacks. can triumph over tragedy, provided they take conscious steps to do so. For a start, they must Decide How to Fight Back carefully decide how to fight back. Once this The first decision you will face in responding crucial decision has been taken, they must re- to a career disaster is the question of whether Jeffrey A. Sonnenfeld (jeffrey cruit others into battle. They must then take to confront the situation that brought you [email protected]) is the senior steps to recover their heroic status, in the process down—with an exhausting, expensive, and associate dean for executive pro- proving to themselves and others that they perhaps embarrassing battle—or to try to put grams, the Lester Crown Professor of have the mettle necessary to rediscover their he- it behind you as quickly as possible, in the hope Management Practice at the Yale roic mission. that no one will notice or remember for long. School of Management, and the pres- Few people exemplify this journey better In some cases, it’s best to avoid direct and im- ident of the Executive Leadership In- than President Jimmy Carter. After his devas- mediate confrontation. Home Depot cofounder stitute at Yale University in New tating 1980 reelection loss to Ronald Reagan, Bernie Marcus, for example, decided to side- Haven, Connecticut. Andrew J. Ward Carter was emotionally fatigued. As he told us step the quicksand of litigation against Sandy ([email protected]) is an assistant sometime later, “I returned to Plains, Georgia, Sigoloff, the conglomerateur who fired Mar- professor of management at the Uni- completely exhausted, slept for almost 24 hours, cus from Handy Dan Home Improvement. versity of Georgia in Athens, Georgia. and then awoke to an altogether new, un- Marcus made his battleground the market- This article is drawn from their book wanted, and potentially empty life.” While proud place rather than the courtroom. Thanks to of the same title, forthcoming from of his achievements—his success in deregulat- this strategy, he was free to set the historic Harvard Business School Press in ing energy, for example, his efforts to promote course for the Home Depot, which now under February 2007. global human rights, and his ability to broker his successor is approaching $100 billion in harvard business review • hbr.org • the tests of a leader • january 2007 page 2 Firing Back sales, with several hundred thousand employees. blame. Whether I was 40 percent or 60 percent Other comeback kids also began with a to blame really didn’t matter. I felt very good graceful retreat. Jamie Dimon was sacked as about my meeting with him.” In this way, president of Citigroup by then chairman Dimon was able to turn his ouster into an Sandy Weill following 16 years of partnership event that yielded both helpful perspective in building the institution. When he spoke to and reassuring resolution. us and to others, he did not dwell on his dis- About six months after that lunch, in March appointment or sense of injustice. Monica 2000, Dimon became CEO of Bank One, a Langley in her 2003 book Tearing Down the huge Chicago bank that survived the merger of Walls describes what happened when Weill First Chicago and the original Banc One. That asked Dimon to resign. Dimon was shocked year, Bank One posted a loss of $511 million. but replied, “You’ve obviously thought this Three years later, under Dimon’s leadership, through, and there’s nothing I can do.” As he Bank One was earning record profits of $3.5 scanned the already-prepared press release, billion, and its stock price had soared 85%. Dimon saw that the board agreed with Weill.