I F EVER THERE WAS A FAILURE designed to kill a career, Sergio Zyman’s was it! In 1984 Coca-Cola gave him the sole responsibility for reversing Coke’s decline versus Pepsi-Cola. Mr. Zyman’s brilliant idea [strategy] was to replace Coke’s formula, label it “New Coke” and blare the news to the world. HIS ERROR, which some attribute to his ego, was failing to keep old coke on the market!



Within just 79 days, old formula Coke was back on the supermarket shelves, as Classic Coke. A year later, wounded (fatally) Zyman left Coke-Cola. FAILURE! —Personal, humiliating, image-wrecking failure. But it’s not as bad as you think. Just seven (7) years later, Zyman bounced back to Coca-Cola, his ego intact and his job expanded. Zyman is just one person who has screwed up, been fired or demoted, or somehow failed—and bounced back. Walt Disney was fired from one of his first jobs, and both Disney and Henry Ford saw ventures end up in bankruptcy before they made it big time.


The rapid change that drives business today calls for action in the face of uncertainty —which means occasional stumbles. Says Harvard Business School professor John Kotter: “I can imagine a group of executives 20 years ago discussing a candidate for a top job and saying, ‘This guy had a big failure when he was 32. Everyone else would say, ‘Yep, that’s a bad sign.’ I can imagine that same group considering a candidate today and saying, ‘What worries me about this guy is that he’s never failed.’”

Bill Gates, who regularly tempts failure at Microsoft, likes to hire people who have made mistakes. “It shows that they take risks,” he says. “The way people deal with things that go wrong is an indicator of how they deal with change.” But what makes some people fall and flail and others rebound? Executives who have experienced failure and leadership experts who have studied it have answers we can use:


Jimmy Johnson, the legendary former coach of the Dallas Cowboys, knows defeat. In 1989, his first season in Dallas, Johnson’s record was, 1 Win, 15 losses—only a shade less humiliating than his career-launching: 0 - 10 performance as a high school defensive coach. “We had the worst team in the NFL,” Johnson admits. “But I wouldn’t accept anything but being in the Super Bowl.” Johnson, who has a degree in industrial psychology, never wavered in his positive attitude. Instead of telling a running back, “Don’t fumble,” he would say, “Protect the ball.” Instead of “Don’t miss,” he’d say, “Make this.” His post-game meetings concentrated on plotting the next win, “so we could put a loss behind us quickly.” The Cowboys won the Super Bowl—in 1993 and 1994.

The masters of resiliency believe in themselves, often when others don’t. Martin Seligman, professor of psychology at the University of Pennsylvania, has studied employees in 30 industries. “The people who bounce back are optimists who believe ‘My problem is temporary,’ he says. “Pessimists, who generally don’t come back, see their failure as permanent.


When Sergio Zyman left Coke, he didn’t talk to anyone from the company for 14 months. “It was lonely,” he remembers. But he didn’t close any doors. With a partner, he started a consulting company, Core Strategy Group. Operating out of his Atlanta basement (“one Zyman Plaza;”- he jokes) with a computer, a phone and a fax machine, he built a business advising clients such as Microsoft and Miller Brewing. His mantra: think unconventionally, take risks. Eventually, even Coca-Cola sought his advice. But, says Zyman, “In my wildest dreams, I never thought the company would ask me back.” Then management told him they needed help shaking things up. “We became uncompetitive by not being tolerant of mistakes,” admits Coca-Cola CEO Roberto Goizueta. “You can stumble only if you’re moving.”


In the 1960s Jan Lcschly was among the world’s top ten tennis players. “My goal was not to be world champion. It was to play at Wimbledon Centre Court,” the tall, stalwart Dane recalls. “Every time I practiced, I would imagine it, smell the grass, hear the crowds.” In 1969 Leschly reached Centre Court, where he was defeated by Rod Layer. Twenty years later, Leschly was president of Squibb Company. Then he was squeezed out after his company merged with Bristol-Myers. For a year, he took religion and philosophy courses at Princeton. But he never stopped focusing on his goal of being a CEO, and by 1994, Leschly had taken the chief executive’s title

at SmithKline Beecham.


Rick Miller learned early that you can’t always get what you want. He grew up in an unhappy family with an alcoholic father. By 1989 Miller had acquired a reputation as a hotshot who could turn corporations around. Wing Laboratories recruited him to save the company from bankruptcy. But the computer maker turned out to be a nastier challenge than Miller had envisioned. After the recession hit, Miller had to swallow his pride. To save the business, he filed for “Chapter 11" and sold off its manufacturing operations. Then he left the company. Wang became a shell of its former self. But it is profitable and Miller has no regrets.

Adversity in childhood actually helps people adapt and rebound. Resilient people know they cannot control their world. The most successful view failure like puberty: awkward, uncomfortable, but a transforming experience that precedes maturity. Today, Miller is AT&T’s top financial officer. When AT&T chief executive Robert Allen met him the first time, he said, “I view your Wang experience as a total plus.” At AT&T Miller asks young employees who worry about failure if they can “look in the mirror and say, ‘I did my best If they can, no matter what the out-come, that’s success.”


Bernie Marcus was a poor Russian cabinetmaker’s son from Newark, N.J. Arthur Blank was raised in a lower-middle-class neighborhood in Queens, NY, where he ran with a juvenile gang. His father died when Arthur was 15. “I grew up with the notion that life is going to be filled with some storms, Blank says. In 1978, he and Marcus were working at a hardware retailer in Los Angeles when a new owner canned them. The next day an investor friend suggested they go into business for themselves. “Once I stopped stewing in my misery,” says Marcus I saw that the idea wasn’t crazy.’ Marcus and Blank began opening the kind of stores they had dreaded competing against: hangar-size, no-frills outlets with high-grade service and a huge selection. Today their Home Depot tops the fast-growing home- improvement industry. When-ever Marcus meets another entrepreneur, he asks, “Was there a point in your life when you despaired?” Says Marcus: “I you discussed this with 50 successful entrepreneurs. Forty had that character-builder.


Psychologist Robert Staub, who counsels executives, believes the No 1 cause of failure is a lack of self-awareness. You must step outside your skin to adopt the viewpoint of others. “I never understood the impact I had on people,” says Anne Busquet of American Express. Four years ago, Busquet was the general manager of its Optima Card Unit. When five of her 2000 employees were found to have deliberately hidden $24 million in losses, she was held accountable An intense perfectionist whom others saw as intimidating and confrontational, Busquet may have made her subordinates so fearful of reporting bad news that they lied about it.

She lost her Optima job but was offered a chance to try to salvage one of American Express’s smaller businesses. Her self-esteem shaken, she almost turned down the offer. But the Optima failure was a call to action. “I realized I needed to be much more understanding,” she says. She became more patient and a better listener. She learned to solicit bad news: “I question why profit numbers are good as well as why they’re not. If I had done this before, I might have uncovered the Optima problem sooner. Busquet is now an executive vice president. “Anne is an example of someone whose career stalled but who had the courage to take on a difficult challenge,” says former boss Thomas Ryder. “Too many people look for the safe place and as a result stay stuck.”


...as Shakespeare said. Failure saved Anne Busquet, prodded Bernie Marcus and Arthur Blank, carried Rick Miller to the mountaintop, and made Sergio Zyman a strange-but-true model for the new world. If you haven’t failed yet, for the benefit of your career you probably should.


FORTUNE Magazine , May - 1995

Copyright @ 1995 by: TIME, INC.

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