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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. BUSINESS SCHOOLOPYRIGHT © 2006 HARVARD PUBLISHING CORPORATION. C

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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

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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. Adding to the sweetness of vindication, the fol- The firm offered Dimon a generous, nonre- lowing year Bank One merged with JPMorgan strictive severance package, so a battle with Chase, an institution with which Weill had Weill seemed pointless. long wanted Citigroup to merge. Dimon be- While he was unemployed, Dimon read bi- came CEO of the new company and is now ographies of great national leaders who had widely regarded as one of the most influential truly suffered. He also took up boxing— financial executives in the world. another way, perhaps, of dealing with the Of course, it’s not always a good decision to stress and pain. After a year of this, Dimon de- sit on the sidelines and presume that justice cided he needed closure, so he invited Weill to will prevail. The highly respected Nick Nicho- lunch at the Four Seasons to thank him. As las, outmaneuvered as CEO of Time Warner Dimon recounts in Harvey Mackay’s 2004 by his skilled rival Gerald Levin, never chal- book, We Got Fired!: “I had mellowed by then. lenged his old firm. He went off to Vail to ski at Sandy wasn’t going to call me.... I knew I was the time, awaiting a call back to service, soon ready to say thank you for what he did for me. becoming a very successful investor in new I also knew he and I should talk about what businesses, a professor, and a board director. happened. I wanted to get this event behind But he never regained his role as the leader of me so I could move on. Part of me said I had a great public enterprise. Other deposed spent sixteen years with him. Twelve or thir- CEOs, such as Ford’s Jacques Nasser, Hewlett- teen were pretty good. You can’t just look at Packard’s Carly Fiorina, IBM’s John Akers, one side and not the other. I made my own United Air Lines’ Richard Ferris, and Apple’s mistakes; I acknowledged I was partly to John Sculley have similarly failed to return to lead major public firms. They were considered brilliant leaders by many and were never ac- cused of plundering the shareholders’ wealth, like some rogue CEOs of recent years. But they Getting Beyond Rage and Denial never fought back, and they disappeared from One of the most important steps on the reflecting on what to do next. the corner office. route to recovery is to confront and ac- •Help people to deal with your The key determinant in the fight-or-flight knowledge failure. This can be as simple failure. Even close friends may question is the damage (or potential damage) as understanding the Machiavellian pol- avoid you because they don’t know incurred to the leader’s reputation—the most itics of others. So as you set about re- what to say or do. Let them know important resource of all leaders. While de- building your career, make sure you: that you are ready for assistance parted CEOs and other leaders may have •Remember that failure is a begin- and what kind of aid would be enough other resources and experience to re- ning, not an end. Comeback is al- most useful. bound, it is their reputation that will make the ways possible. •Know your narrative. Reputation difference between successful career recovery •Look to the future. Preemptive ac- building involves telling and retell- and failure. tions are often more effective than ing your story to get your account of Fights that will result only in a Pyrrhic vic- reactive ones—even if they only events out there and to explain your tory are best avoided. Battles of pure revenge take the form of standing back and downfall. Be consistent. can resemble Shakespearean tragedies, where

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all parties lose. Hewlett-Packard board mem- the process of recovery. Those who really care ber Tom Perkins, for example, in trying to de- for you can help you gain perspective on the fend his friend and fellow director George good and bad choices you have made. You are Keyworth from allegations of leaking confiden- also more likely to make yourself vulnerable tial board discussions, not only brought down with those you trust. Without such vulnerabil- HP chairman Patricia Dunn but also caused ity, you cannot hope to achieve the candid, self- his friend far greater humiliation, forcing him critical perspective you will need to learn from off the board as well. A leader must consider your experience. Still, although family and whether fighting the allegations will exacer- friends can provide invaluable personal sup- bate the damage by making the accusations port, they may be less effective when it comes more public. to practical career assistance. Research has When, however, the allegations are not only shown that slight acquaintances are actually sufficient to cause a catastrophic career setback more helpful than close friends in steering you but would also block a career comeback, then toward opportunities for new positions in leaders need to fight back. Consider former Is- other organizations. raeli prime minister Ariel Sharon. He was a tri- In an acclaimed study, Stanford University’s umphant commander on the Egyptian front in Mark Granovetter discovered that of those in- the Six Day War of 1967. Fifteen years later, as dividuals who landed jobs through personal minister of defense, Sharon initiated an attack contacts, only 16.7% found them through peo- on the Palestine Liberation Organization in ple they saw at least twice a week; 55.6% found Lebanon. Christian militias seized the opportu- positions through acquaintances seen at least nity to massacre hundreds of Palestinians in once a year. But 27.8% of job candidates found acts of revenge against the PLO in the Israeli- work through distant acquaintances, whom In our research, 35% of controlled Sabra and Shatila refugee camps. they saw less than once a year—old college In a February 21, 1983, cover story, Time friends, former workmates, or people known ousted CEOs returned to magazine reported that these massacres were through professional associations. In other an active executive role the result of a plot between Sharon and the words, more job contacts will come to you militias to avenge the killing of Lebanon’s through people you see less than once a year within two years of Christian president Bashir Gemayel. Sharon than from people you see twice or more a sued Time in Israel and in New York in lengthy week. That’s because close friends share the departure, but 43% litigation. In both places, juries found Time’s same networks as you do, whereas acquaintan- effectively ended their accusations to be false and defamatory. The ces are more likely to introduce you to new magazine settled and apologized. “It was a people and contacts. Indeed, through the careers. very long and hard struggle and was worth it,” power of acquaintance networks, you can Sharon said publically at the time. “I came reach almost anyone within a few steps. Thus, here to prove that Time magazine lied: We distant acquaintances that don’t appear to were able to prove that Time did lie.” have any connection to you may prove key to A ferocious warrior, Sharon took on this your recovery when you are trying to get back carefully calculated battle for his reputation on your feet. and executed it with focus and determination. But it’s not enough to have a wide network He knew that if he did not vigorously defend of acquaintances. The quality of the connec- himself, no one else would be able to help him. tions, even the more distant ones, matters as Sharon could not have regained his honor and well. That was the case for Home Depot’s returned to public office if he had not chal- Bernie Marcus. Marcus was devastated when lenged these false charges and then moved on he was fired as CEO of Handy Dan on what he with his life. felt were trumped-up charges made by Sandy Sigoloff, the threatened boss of the parent Recruit Others into Battle company, Daylin. “There was a lot of self-pity Whether you fight or tactically retreat for a on my part,” Marcus told us. “I was drowning while, it is essential to engage others right in my sorrow, going several nights at a time from the start to join your battle to put your without sleeping. For the first time in my adult career back on track. life, instead of building, I was more concerned Friends and acquaintances play an instru- with surviving.” mental role in providing support and advice in Marcus, however, had an unexpected re-

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source. Whether they were close friends and your dream is accepted, you achieve renown. If colleagues with whom he worked or acquain- for whatever reason your public vision is ulti- tances he dealt with on a casual basis, Marcus mately discarded, you suffer the loss of both treated others with uncommon honesty, re- your private dream and your public identity. spect, and trust. This consideration was recip- After a career disaster, you can rebound only if rocated by people in his network when he you are able to rebuild your heroic stature— needed help; it was one of his less frequent ac- that is, the public reputation with which you quaintances, Rip Fleming at Security Pacific were previously perceived. An intrinsic part of National Bank, who made it possible for Mar- recovering this heroic status involves getting cus to launch Home Depot. your story out. This calls for a public campaign Marcus had raised $2 million in seed money to educate and inform. for the Home Depot venture, but this was not When a CEO is fired, the true causes for the enough to get his new company off the dismissal are often deliberately hidden, as the ground. He applied to several banks for a line board seeks to protect the reputation of the of credit but was turned down every time. firm and itself. The organization often engages Eventually, he knocked at Fleming’s door at in elaborate face-saving activities to disguise Security Pacific National. Both Marcus and the real nature of the exit. Euphemistically, Fleming believed that the relationship be- the press reports that the CEO resigned “for tween banker and client should amount to personal reasons” or “to spend more time with more than just the business transactions they family.” In our interviews with dismissed conducted. Consequently, Fleming had be- CEOs, we found that their greatest frustration come an adviser to Marcus at Handy Dan. De- stemmed from not being able to rebuild their spite these strong professional ties, though, heroic stature by telling their side of the story. “I was drowning in my Fleming was initially reluctant to issue a line of We have interviewed several people who had credit until Marcus flew out to Los Angeles and seven-figure separation agreements that were sorrow,” Bernie Marcus sold Fleming on the idea. In the end, Security contingent on their toeing the party line when told us, “going several Pacific National provided a $3.5 million line of they left. That’s a problem when CEOs are pub- credit, which enabled Home Depot to get up licly sacrificed even though they are not guilty nights at a time without and running. Unbeknownst to Marcus, the of the accusations that led to their ouster. In proposal was repeatedly turned down by the such cases, CEOs’ inability to challenge and set sleeping.” But Marcus bank’s loan committee and was approved only the record straight can lead to destructive spec- had an unexpected when Fleming marched into the president’s of- ulation in the press, which can damage their fice with his resignation letter in hand. reputations so much that it becomes all but im- resource. How you build relationships has a huge im- possible to recover. pact on your prospects for career recovery. Popular wisdom holds that a deposed leader Marcus had a way of building relatively strong should sign the nondisparagement agreement, relationships even in circumstances when most accept the noncompete clause, take the people would settle for weak acquaintance- money, and run. Our strong belief is that such ships. This capacity for affiliation is a litmus agreements are a mistake. In the end, your test of a leader’s ability to bounce back. People cash will disappear, and you won’t be able to who can create connections are much more get your story out. If you agree not to speak likely to engender the kind of help they need out, be prepared to be unemployed for a num- when fate turns against them. ber of years. A lesser-known player in the Enron saga, Recover Your Heroic Status Daniel Scotto, comes to mind. Scotto was the It’s not enough for you to recruit others to ad- financial analyst who headed up the research vance your career. To launch your comeback, department for the large global investment you must actually do things to win back the sup- bank Paribas. Early on, Scotto said that Enron port of a wider audience. To manage this, you was losing money in all its mainstream busi- must regain what we call your heroic status. nesses and that it was only through offshore fi- The great leader has a heroic persona that nagling that the company was creating the confers a larger-than-life presence. You can image of profitability. Paribas, which was un- achieve this status by developing a personal derwriting a large part of the debt, asked dream that you offer as a public possession. If Scotto to recant. When he wouldn’t, Paribas

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put him on an imposed medical leave for three her release from prison, the share price neared weeks and then fired him. He was forced to an all-time high, ad revenue at her magazines sign a non-disparagement agreement that hurt picked up, and she launched two national net- his ability to get his story out. Scotto has been work TV shows. The more Stewart got her unemployed for five years. story out, the more loyal her public became. Martha Stewart is the best reminder that it Stewart managed to provide a reassuring doesn’t have to be that way. As the most public account of what really happened in her case. example in recent times of a CEO who got her But what if you can’t? What if you have truly story out, Stewart is a model for how to regain stumbled? If you cannot refute the facts of your heroic status. She did it by carefully or- your dismissal because they are so condemn- chestrating a multitiered campaign to restore ing, show authentic remorse. The public is her reputation. often enormously forgiving of genuine contri- The day after she was indicted for obstruc- tion and atonement. tion of justice in the federal government’s insider-trading investigation of ImClone stock, Prove Your Mettle Stewart took out a full-page advertisement in Protecting your reputation by knowing how USA Today and the New York Times, and to fight unjust accusations and bringing oth- launched a new Web site, marthatalks.com. ers on board are both essential precursors to In an open letter to her public, Stewart clearly relaunching a career in the aftermath of catas- proclaimed her innocence and her intention trophe. Ultimately, however, you will recover to clear her name. She understood intuitively fully only when you take on that next role or that when a hero stumbles, constituents have start a new organization. When you show to reconcile two conflicting images of the that you can still perform at a credible or su- If you cannot refute the person—the larger-than-life presence the hero perior level, others will begin to think of you once commanded and the hero’s new fallen as having the mettle to triumph over your ca- facts of your dismissal, state. In her letter, Stewart managed to elimi- reer calamity. show authentic remorse. nate the confusion by making sure that people Showing mettle is not easy. Fallen leaders knew her side of the story. She openly denied face many barriers on the path to recovery, not The public is enormously any charges of insider trading and hammered least of which are doubts in their own ability to home the unreliability of the three witnesses get back to the top. As one fired CEO told us, forgiving of genuine upon which the government based its case. “I’d never sit here and say, ‘Geez, all I have to contrition. Stewart very proactively helped others con- do is just replicate and do it again.’ The chances tinue to believe in her heroic status. of doing it again are pretty small.” Yet leaders Stewart’s open letter was supported by a who rebound are unfailingly those who get statement on her Web site by her attorneys, over this doubt about their ability to do it Robert G. Morvillo and John J. Tigue, Jr., who again. Even when forced from familiar arenas challenged the media to investigate why the into totally new fields, some leaders remain un- government waited nearly a year and a half to afraid of trying new ventures. This capacity to file the charges. “Is it because she is a woman bounce back from adversity—to prove your who has successfully competed in a man’s busi- inner strength once more by overcoming your ness world by virtue of her talent, hard work, shattered confidence—is critical to earning and demanding standards?” they asked. lasting greatness. With the aid of her attorneys, Stewart Take Mickey Drexler. When Gap founder ingeniously—and successfully—portrayed her- Donald Fisher poached Drexler away from self as a David struggling in a just and valiant Ann Taylor in 1983, the Gap was struggling quest against the Goliath of government. Her to compete, since it sold the same brands of fans, far from abandoning a fallen star, rallied clothing as everyone else and was caught in around her. The astounding strength of this a pricing game. Drexler expanded the retailer sentiment is measured in the stock price of beyond the core Gap stores to brand exten- Martha Stewart Living Omnimedia. Even at sion such as GapKids, babyGap, and Gap- the midpoint of Stewart’s prison sentence, the Body, as well as introducing other comple- stock had not merely rebound—it was 50% mentary brands, including Banana Republic higher than before anybody had heard of Im- and Old Navy. Between the time he arrived Clone and the ill-fated stock transaction. Upon in 1983 and 2000, Gap’s sales increased from

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$480 million to $13.7 billion, and its stock rose his expertise. He turned down a multimillion- 169-fold. dollar severance package from Gap because it Then things began to go awry. Drexler was contained a noncompete clause. After he ex- accused of having lost his touch as a prescient plored a few other avenues, opportunity came merchant; suspicion arose in the minds of ana- knocking in the guise of struggling fashion re- lysts and in the media that the goods had be- tailer J.Crew. come too trendy. Although some people have With only about 200 stores, J.Crew was a suggested that the real problem was that small fraction of the Gap’s size and conse- Fisher’s brother had built too many stores too quently much more amenable to Drexler’s close to one another, Drexler was blamed for hands-on style, giving him a greater opportu- the slump, as same-store sales dropped every nity to make an impact. Drexler invested $10 quarter for two years, and the stock plum- million of his own money to buy a 22% stake in meted 75%. On May 21, 2002, Drexler pre- the company from the retailer’s private owner, sented the upcoming season’s merchandise to the investment firm Texas Pacific. He took a the board, confident that he had a great selling salary that was less than a tenth of what he line for the fall. It wasn’t enough for the direc- had earned at his former employer. “You’ve no tors, and the next morning Fisher fired him, idea how much it’s costing me to run this com- believing that the company was now too large pany,” he joked in a New York magazine article for Drexler’s hands-on management style. shortly after taking over. Drexler was by this time independently The results more than proved that Drexler wealthy, but he was nonetheless determined to still had the right stuff. J.Crew rebounded from prove that the failures of the previous two a $30 million operating loss in 2003 to an oper- years were not primarily his fault and did not ating profit of over $37 million in 2004. Same- reflect his abilities. He knew that the only way store sales per square foot, one of the key met- to restore his belief in himself, as well as other rics in retailing, rose 18% from $338 to $400, people’s confidence in him, was to return to a while at his old employer, sales per square foot role in which he could once again demonstrate dropped 3%. By the summer of 2006, Drexler had increased both sales and profits 20% and launched a wildly embraced IPO to take J.Crew public. The media celebrated his recovery and acknowledged his obvious talent. How to Come Back For Drexler, as for others, the comeback re- Our interviews with some 300 derailed •Recover your heroic status. De- quired him to prove his worth in a situation CEOs and other professionals, as well as posed leaders are often advised to that was perceived to be enormously difficult. our scholarly leadership research, con- sign nondisparagement agree- Start-ups or turnarounds are common con- sulting assignments, and personal experi- ments. Don’t do it. Engage instead texts in which fallen leaders can recover grace. ences, have brought to light five key steps in a multitiered campaign to clear It is in these demanding situations that leaders for rebounding from career disaster. Any- your reputation and restore your find the mettle to prove to themselves and to one trying to recover from a catastrophic stature. others that they have not lost their magic setback can use these steps to match, or •Prove your mettle. After suffering touch and that no obstacle is too great to over- even exceed, their past accomplishments: career disaster, you will probably come in their quest for return. •Decide how to fight back. Pyrrhic have doubts about your ability to victories will hurt you by calling at- get back to the top. You must over- Rediscover Your Heroic Mission tention to the accusations leveled come that insecurity and in the pro- Most great leaders want to build a legacy that against you. But when your reputa- cess find the courage to prove to will last beyond their lifetime. This does not tion is unfairly damaged, you must others—and yourself—that you mean having their names etched on an ivy- take quick action. have not lost your magic touch. clad university ediface but rather advancing •Recruit others into battle. Friends •Rediscover your heroic mission. It society by building and leading an organiza- and family can provide comfort and, is the single-minded pursuit of a tion. This is what we call the leader’s heroic perhaps, some perspective in your lasting legacy that sets great leaders mission. hour of need. But acquaintances apart. To recover from a disastrous Most of the leaders we have profiled in this may be more important in landing setback, find a new heroic mission article were deeply engaged in building a last- that next job. that renews your passion and cre- ing legacy even before they suffered their ca- ates new meaning in your life. reer setbacks. It is the loss of this mission that harvard business review • hbr.org • the tests of a leader • january 2007 page 7

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really raises a derailment to catastrophic pro- a further $42 million over a probation viola- portions in the leader’s own mind, since it puts tion. After serving 22 months, Milken was at risk a lifetime of achievement. On the day released early for cooperating with other in- Steve Jobs was fired from Apple in 1985, for ex- quiries. But he was barred from the securities ample, his friend Mike Murray was so con- industry for life. cerned about Jobs’ reaction that he went over A week later, Milken was diagnosed with to Jobs’ house and sat with him for hours until prostate cancer and was told he had 12 to 18 Murray was convinced that Jobs would not months to live. He immediately turned his commit suicide. maniacal zeal into a new heroic mission to Jobs did not wallow in despair for long. A conquer this disease. Through aggressive treat- week after his ouster from Apple, he flew to ment and his own dietary research, he sur- Europe and, after a few days in Paris, headed vived to build a huge foundation supporting for the Tuscan hills of northern Italy, where research to battle prostate cancer. He also cre- he bought a bicycle and a sleeping bag and ated an economic research institute that at- camped out under the stars, contemplating tracts the world’s top scientific, political, reli- what he would do next. From Italy, he went to gious, and business leaders. Milken still argues Sweden and then to Russia before returning that he was wrongly accused. Others may dis- home. Once back in California, with his pas- agree, but few would doubt that he has sion and ambition renewed, Jobs set about re- earned restitution. The public has come to ac- creating himself as a force in the IT world. He cept that he has paid for his crimes, and there went on to found another computer com- has even been some reconsideration of their pany, NeXT, which Apple purchased in 1996 actual severity. for $400 million, at which point Jobs returned It is the single-minded, passionate pursuit of We all have choices in to Apple and at the same time became the a heroic mission that sets leaders like Steve driving force behind the hugely successful Jobs and Michael Milken and Jimmy Carter life, even in defeat. We computer-graphics studio Pixar. Once back at apart from the general population, and it is can lose our health, our Apple, Jobs revived and reenergized the com- what attracts and motivates followers to join pany with breakthrough, high-design prod- them. In the worst of cases, to have that life loved ones, our jobs, but ucts, such as the iMac, iBook, and iPod and purpose ripped from you and to be prohibited took the company into emerging businesses, from its further pursuit can leave an unbear- much can be saved. such as iTunes. able void and doubts as to your reason for be- Like Martha Stewart, Steve Jobs was able to ing. Finding a new mission to replace your life- recapture his original heroic mission. Other de- long purpose can be a great struggle, but one posed leaders, however, must truly start again that is necessary if you are to recover. because the door to their familiar field is firmly • • • closed, and they must seek new opportunities The tragedies and triumphant comebacks of and create a totally new heroic mission. the leaders we have profiled in this article can That’s what Drexel Burnham Lambert finan- seem remote, bordering on the mythological, cier Michael Milken, the imaginative “king of perhaps. But their stories point to important the junk bonds,” had to do. Milken’s life was lessons about recovering from career catas- almost the incarnation of the American dream. trophe. Stunning comeback is possible in all Born on the Fourth of July, Milken had be- industries, though the challenges vary ac- come a billionaire by his mid-forties and one of cording to the leadership norms of each the most influential financiers in the world. field’s culture. For example, clergy ensnarled Then it all came tumbling down. He was in publicized sex scandals will probably see charged with a 98-count criminal indictment, their careers dissolve, whereas entertainment and a massive civil case was brought against figures may not only recover but actually him by the SEC for insider trading, stock park- benefit from notoriety. Where one profession ing, price manipulation, racketeering, and de- values trust, another values celebrity. Thus, frauding customers, among other crimes. He recovery plans must be adapted to the cul- ended up pleading guilty to six relatively tures of different industries. minor counts. In November 1990, he was sen- Whatever the arena in which your recovery tenced to ten years in prison, agreed to pay takes shape, the important thing to remem- $600 million at the time, and ended up paying ber is that we all have choices in life, even in

harvard business review • hbr.org • the tests of a leader • january 2007 page 8

Firing Back

defeat. We can lose our health, our loved less we stop thinking. No one can stop us ones, our jobs, but much can be saved. No from rebounding unless we give up. one can truly define success and failure for us—only we can define that for ourselves. No Reprint R0701G one can take away our dignity unless we sur- To order, see the next page render it. No one can take away our hope and or call 800-988-0886 or 617-783-7500 pride unless we relinquish them. No one can or go to www.hbr.org steal our creativity, imagination, and skills un-

harvard business review • hbr.org • the tests of a leader • january 2007 page 9

Further Reading The Harvard Business Review Paperback Series

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