0:00 Today on Business Lessons from the Military, a bonus episode to the 24 episode campaign that ended just last week. We're going to talk about leadership after failure. [music]
0:14 >> Who are you and where are you going? [music] What do you want? Hello and welcome to Business Lessons from the Military. I'm your host, Kevin Bemel, and I'm here every Tuesday at 10:00 a.m. Pacific time to talk about military history, doctrine, and leadership practices and then distill from those lessons we can apply to our businesses and professional practices.
0:50 So last week I concluded the 24 episode campaign and in going through my plan for that I realized I had inadvertently left one lesson out. It should have been the 25 episode campaign and in many ways it's a very very important one because it talks about leading after failure. What do we do when we've blown it and and now we have to recover? And so the reality of today's uh world is there
1:25 there is you know essentially instantaneous communication. And so there is there is no opportunity uh in many cases to sort of figure out what's going on and recover from it and and you know present some kind of cogent overall picture to something that has happened. And so we need to be prepared for the times when inevitably plans go ary and we're not able to deliver whatever it is we have said we're going
2:02 to. Uh it can be on a small matter, it can be on a large matter. And I think there's there's there's a a a natural um proclivity for leadership to focus on success. that's that's why we're uh you know in charge of an enterprise. Uh but the reality is it's it's much easier to lead when things are going well uh than when it is when things are going wrong. and public failure where other people especially people outside our
2:38 organizations [snorts] uh can see you know the debacle in in all its glory so to speak that is probably the most difficult test that a leader can face. So when a strategy breaks down, when execution fails, when when when stakeholders, stockholders react and employees get upset, when confidence erodess and when and and and then all instantly stories, narratives are formed around what happened. So this this creates a
3:16 situation where leaders have to respond very very quickly and I use that word respond very very advisedly. We should not react. We need to respond to maintain or recover credibility from permanent a as opposed to you know dealing with a sort of a permanent loss. And the difference is not really intelligence or experience. It really comes from ownership under pressure. [snorts] So this morning I was listening
3:54 to one of the you know various business podcasts to which I listen to. I think it was uh the Wall Street Journal, although I I it may have been Bloomberg or something, but they were talking about uh how the how Allstate Insurance Company uh changed their contract between the company and their brokers and agents.
4:18 >> [snorts]
4:18 >> And a lot of it focused on uh the use of technology especially AI but it also included changes in compensation benefits all those kinds of things and evidently there's been a pretty sizable backlash to not so much the changes evidently but to the way it was presented. They brought all a whole bunch of their people to Las Vegas for kind of this big party and then in the sort of 11th hour and 59th minute, they sort of dropped this, you
4:54 know, new contract on them and it it it seemed like it came out of the blue. There was there was no sort of setting it up right now. It'll be interesting to, you know, watch what happens with this. But this is the kind of situation that can, you know, lead to failure if if agents and brokers start um abandoning All State in favor of another company, State Farm or or going independent, something like that. and how the leadership of All State in
5:31 particular the CEO responds will really show what you know the quality or lack thereof of his leadership. So in the military uh command responsibility is absolute. So responsibility is not optional. It's not shared in some sort of vague sense. So the commander is responsible for planning decisions, for operational outcomes, for unit performance and for
6:08 mission success or failure. There is no escaping that at least in theory. Uh now I will tell you there have been uh times in my career where the the commander clearly was failing and he was able through sort of connections and such to hide that failure from the larger navy much to the consternation of the people that he was purporting to to
6:44 lead. I I have one particularly egregious
6:47 >> [snorts]
6:47 >> uh actually two particularly egregious uh uh situations in mind. Um and I can tell you that in one of them it really it had a a a palpable negative impact on the morale of the crew on the ship. So, we had roughly 4,300 sailors on this deployment and it it it [laughter] I was at least that it got out into the public. I was the only one who said
7:23 something to this commander and uh you know I found that the morale on the ship was was improved [laughter] you know because people were coming up to me and basically saying you know thank you for what you did high five he he really that really needed to be said to him that kind of thing right you do not want that happening when you are the senior leader on board a ship you don't want your crew telling, you know, some junior officer, chaplain, you know, [laughter] good job, uh, you know, sticking it to
8:00 the man, so to speak, right? Uh and and uh so you know and and the bottom line was uh part of what they disliked so much about this incident was it he was clearly trying to weasle out of having to take responsibility for what was going on and and people people were repulsed by that on the one hand and as well because the previous uh admiral we had in that role was exactly
8:36 the opposite. He was he would absolutely take responsibility even if and sometimes as a chaplain I knew things about what went on that didn't get out to the you know to the crew as a whole even in situations where it really didn't have anything to do with the decision he had made still his attitude was look I'm the strike group commander the buck stops with me and so you know I'm going to take responsibilities for these and If a subordinate has done something wrong, I will talk to him
9:11 quietly and make sure he understands that this performance was not acceptable. But as far as the crew of the ship is concerned, I'm the guy, you know, with with with the stars, you know, on my sleeve, um, and the big fat stripe with it. Um, and so I have to take responsible for for for success or for failure, whichever one it is. And this is true even when conditions are unfavorable, when intelligence is incomplete, when execution I is
9:46 disrupted and when external factors over which you know one has no control. Maybe that's what led to the failure. But it doesn't matter. The commander still has to take responsibility. So accountability remains fixed and this principle exists to eliminate confusion when the stakes are highest. Okay, we just when when you know the battle is going on especially
10:21 we cannot take the time for uh you know boards of inquiry and and that sort of thing. the the the commander has to step up, take the responsibility, and then see to it that the situation is fixed. So probably in in military history, one of the most well-known examples of this is a situation where in the end the commander uh he didn't have to publicly make his
10:58 mayulpa, if you will. Uh but but he was prepared to do so. And while candidly I am not um a Dwight a general Dwight Eisenhower syncopant um there were qualities about him I think that were uh absolutely admirable and in the case of uh the Normandy invasion um on June 6, 1944 it was a tremendous risk. Uh, sorry. Uh,
11:33 did I say June 4th? June 6th, 1944. Um, it was a tremendous risk. So, the weather had been unfavorable and and General Eisenhower had to make a decision. Are we going to go now or are we not going to go now and wait probably another month to mount this invasion under increasing pressure from uh among others the Soviet Union to start a second front in World War II and relieve pressure on the Eastern Front. And so it
12:10 fell as as the supreme uh uh commander allied expeditionary force otherwise known as sha uh general eisenhower had the responsibility for making that decision. He could not shift it to Winston Churchill or President Roosevelt or uh you know the the the secretary of the army or I should or the secretary of the navy or you know George Marshall who was chief of staff of the army. he had to make the decision and he decided to go. As he was sitting, once he had made the
12:46 decision to go, there was really nothing for him to do. And if you've ever seen the version uh of of D-Day in which uh Tom Celich plays uh General Eisenhower, I I think this moment is is is done very well. um because um Celich playing Eisenhower sits down and he writes out this sort of very brief note. I'm going to read it in total because it'll just take a couple of moments. Um but Eisenhower wrote as follows. Uh and this was before knowing what the outcome of
13:21 the Normandy invasion was going to be. [snorts] Uh he wrote our st our landings in the Sheerborg Havra area have failed to gain a satisfactory foothold and I have withdrawn the troops. My decision to attack at this time and place was based upon the best information available. The troops, the air, and the navy did all that bravery and devotion to duty could do. If any blame or fault attaches to the attempt, it is mine alone.
13:57 That is what a leader does. And if one could imagine uh there was no certainty that the Normandy invasion was going to be successful and given the thousands and thousands tens of thousands really of troops involved, hundreds and hundreds of aircraft and ships, the the results of disaster would have been enormous. And that's not an exaggeration. Uh and fortunately for Eisenhower, General Eisenhower, uh the
14:34 Normandy invasion was successful. Uh but I do think it shows the quality of his character that he was willing to accept uh that that not that he was willing that he intended to accept sole responsibility for its failure if that is what happened. and and and note that uh it implies that success is shared. So the fact that failure is his sole responsibility
15:11 is not somehow mirrored by success being solely due to him. Success is due to the team. Okay? Failure is the responsibility of the leader, the public face of failure. And so this this attitude really strengthened trust across the entire command structure because it removed any ambiguity about accountability, about responsibility. you know, subordinate commanders knew
15:48 they had to take the responsibility for their part of the operation, knowing that that they didn't have to be worried about blame sort of rolling downhill onto them for parts of the Normandy invasion over which they had no control. So I think the important question is why do leaders lose after failure? Right? So organizations often fail not because failure occurs but because of how leaders respond afterward. Right? So
16:27 [snorts] common breakdown patterns include um deflection of responsibility, delayed acknowledgement, narrative control attempts, um internal internal blaming shift, internal blame shifting and just sort of strategic silence, right? And by the way, we see this um above we see this on the part of both um military and civilian leadership in the military. So, if one thinks back to um the withdrawal from Afghanistan,
17:02 which was um heartbreaking for those of us who were were in the military because most of us knew someone at least someone who was uh killed uh you know in in in Afghanistan. So part of the problem was that that clearly the withdrawal had was not done properly. Um and there was um unnecessary deaths. there was unnecessary um claiming of of material um by the
17:39 Taliban and yet there was no acceptance of responsibility by anybody um neither uniformed nor civilian leadership. It was treated as uh a victory when in fact everybody could see that that it was a failure. I mean, when you have Afghanis holding on to planes that are taking off and falling to their, you know, wounding or death, I'm sorry that that that is that does not look like a success. It looks like what happened in the
18:15 evacuation of South Vietnam. Um, you know, when the when the United States withdrew from from Vietnam, right? So and and and and and likewise in in that case there was no acceptance of responsibility, right? So I I I think this and and this uh it it seemed to have um inflicted in essence a permanent wound uh on on President Biden's administration um you know afterwards. Um and and I can
18:50 tell you among people in the military, it basically uh denuted their confidence in the commanderin-chief uh a as a result, right? And so um you know, silence is just not an acceptable posture to take when failure strikes. And it it it it it it [clears throat] show it it it really exacerbates the situation I think is the best way to put
19:26 it. Right? So uh when any of these behaviors are exhibited in the face of failure. So they cause second order failures including a loss of legitimacy. Um and then once legitimacy erodess, recovery becomes even more difficult, right? It it it look most people setting the politics aside, right? People who will harp on failure for political gains that that's a
20:01 separate issue. Uh I think most people understand that at times leaders make mistakes, at times plans do not work out as intended. And and so to a certain extent failure is inevitable in any kind of large human endeavor, right? People know that. What they're looking for is what's going to happen now. Okay. And so the when you have a
20:36 especially a large company where the CEO is has clearly failed, right? So that failure especially for a publicly traded company, it's it's immediate and visible. Uh the commentary spreads instantly. I mean it's amazing. You'll see I I know I see them in the business podcasts, you know, immediate reaction to, you know, and to be honest with you, I never listen to that stuff because it's people talking about a situation before they can possibly have enough information to
21:12 say anything sensible about it. So I do listen for uh uh information coming directly from the company and or from the leadership of the company but I couldn't care less what talking heads think about uh you know some kind of business failure because it's at best they maybe contacted maybe one or two people inside the organization who it's it's very unlikely have a have a broad enough picture to really know what the situation was right. But nonetheless, the commentary spreads essentially
21:48 instantly and shareholders, employees, they react in real time, right? Um and and very quickly narratives form uh almost always before facts are understood, before the situation can stabilize, right? And in this environment, the perception of accountability becomes as important as operational recovery. So leadership is not judged only on results
22:23 but on responsive behavior. And this is something that I think if if you talk with my team members, they would tell you I probably preach this. I go, you know, chaplain on them and and but I I I do my best to instill in them the idea that while we don't want to fail ever, it is going to happen. And the most important thing is to as quickly as possible identify that it's happened, take responsibility,
23:00 and then start the process of figuring out, okay, what do we do? Said, if that's how we treat failure, you're going to have no problem with me, right? Because because I I I don't want to work with people who feel they have to be on tent hooks all the time and can never make a mistake. That is counterproductive to being um efficient in running an organization and to solving the problems that inevitably come up including the unexpected ones. Okay. What what I what I will not um
23:37 accept is someone trying to shift the blame or deflect it or in some other way not exhibit a mature response. Okay. And and because that is not leadership that is lack of leadership. Um so you know nonetheless I think we we as as leaders we need to recognize the psychological pressure of failure. So after public setbacks especially when they're public first of all there's there's a sense of
24:12 reputational anxiety. What are people going to think about me and and my performance? Uh how is this going to affect my standing in the company? What am I going to do? Right? all of that. There's also a tendency toward internal doubt. Maybe I'm not as good a leader as I think I am or as people tell me I am. Right? [snorts] As well pressure from investors, [clears throat] stockholders, employees, unions, uh you know, news outlets. It can be
24:47 unrelenting uh when something goes wrong. And so it becomes very difficult to function and make decisions under that kind of intensive scrutiny and pressure as well. There can be a fear of escalation. Oh no, I've made one mistake. Okay, what what's going to happen politically in the sense of internal company politics as a result of this? Um, is there, you know, is there is there going to be, you know, pressure to oust me, but also is there going to
25:24 be even more intense scrutiny on my activities going forward? And in the face of that more intense scrutiny, am am I going to flub again, right? And that makes it even worse. And then the whole thing kind of mushrooms into something much bigger than it otherwise would have been. And another result is sometimes personal isolation. the person feels like they cannot reach out to other people in the organization. They're ashamed. Um they feel like they've left the team down and and they
25:59 they they find it hard to look at other people in the face, especially if you know as a result of the failure, maybe some people are going to have to leave the company. there's going to have to be a retrenchment and and now you know the person who you know who's at the top feels extremely uh bad because you know of of of the dislocation that's going to be caused among colleagues or or rank and file uh people in the company. So there is an instinct toward self-p protection, self-preservation.
26:34 Um but sometimes that instinct manifests itself as avoidance. And so um um you know leaders will they'll avoid asking questions trying to get to um the heart of the matter. Now maybe by the way although the the CEO or the you know the person running the company is taking the responsibility maybe in fact the cause of the failure was a subordinate [snorts] and the leader really likes the subordinate um
27:10 really respects the person um and is very reluctant to um to confront the person with with their mistakes. takes with their failures for fear that they'll there'll be damage to the relationship. And so they avoid asking the hard questions rather than doing what is what is the correct process which is sitting down with a person, figuring out what happened, asking the tough questions, right? And letting that person have an
27:45 opportunity to take to take responsibility for their their share of what happened, right? uh they're they again the the the sort of uh imp impetus for self-preservation can also delay acknowledging the problem which I've talked about before and in its worst case it will cause a leader to attempt to shift responsibility and and that is you know frankly the most extraable response to a crisis when the leader basically says no it's not me it's it's him or it's this these people
28:21 or whatever ever. No leader worth his salt does that. And you can tell you're dealing with a bad leader when that happens. So some there's a core leadership principle here, if you will. And that is failure does not end leadership. Avoidance of responsibility does. So while shareholders, employees etc. They may ask did something [snorts] go wrong and and if so what is it? What what they are really wanting to know is
28:59 who is responsible? Who owns this failure? Who owns this debacle? And going forward more importantly, can we trust this person again? Right? And so that's why the response to failure is so important. Let's take a quick break and we'll we'll look at some business lessons that come from this. When life brings unexpected changes, managing inherited property shouldn't add to your stress. Magnum Properties
29:36 specializes in probate and trust real estate management. We handle the complexities while you focus on what matters most. From property maintenance to tenant relations, from legal compliance to maximizing value, we're your trusted partner through every step. Magnum Properties, Inc., turning property challenges into peace of mind. Call us today at 213-264-4396 or visit magnumprops.com.
30:11 Okay. So let's look at five lessons uh that we can apply in a situation where uh leadership uh has to recover from failure. So uh this should come as no surprise. Number one, the leader needs to own the outcome immediately. Speed determines credibility. So acknowledge the failure without delay. Okay? Don't you don't need to take the time to understand all the
30:47 facts uh to do a deep investigation. If if if failure has happened, accept the responsibility and then take it from there. So avoid the narrative re the the the the the temptation to um reconstruct the narrative first. Okay. Accept responsibility first and then look at what needs to be done to fix it next. So remove the ambiguity
31:22 as early as you can. Right? So fast ownership of a debacle will be the best thing you can do to preserving trust in you as a leader. Okay. Next, focus on stabilizing the situation before explaining. Okay. So control damage control if you will comes first. investigations and explanations can follow, okay? But you
31:59 want to get your hands around the situation as quickly as possible. So, don't worry about explaining what happened or why it happened or what went wrong. Don't worry about that. As quickly as possible, get a hold of what's going on and get your operations stabilized. So secure operational continuity, prevent organizational panic, and restore baseline confidence. So you're going to need to reach out to the senior
32:34 members of your team. Assure them, you know, you've take you you know, you show them that you've taken responsibility and assure them that the most important thing at this moment is to get things stabilized so that the situation doesn't erode anymore. We'll look at what happened later, but for now, number one priority is get get control of the situation, right? So stability res restores confidence uh faster than
33:09 explanations. Explanations can always follow but explanations are complicated. Okay. And the problem with prioritizing explanations over stability is often times an explanation that has been developed on the fly turns out to be incomplete or even completely wrong. So, we saw this just recently with this um this sort of uh outbreak of I I I I don't know how to I can't remember the name of it that that causes the
33:44 intestinal distress, right? And um very quickly the the federal government came out and said it was due to uh prepackaged iceberg lettuce from a particular supplier, right? And then a couple days later, a few days later, they had to issue a retraction. That wasn't the explanation. Okay? And now, now they're having to look for what the explanation is. Wrong way to handle it. The first thing they should have done is stabilized the situation, okay? And then done a full investigation
34:21 um before they started, you know, pointing fingers. Okay? So uh stabilize before explaining. Next, separate accountability from personal identity as a leader. Just acknowledge you're going to fail sometimes. That's not a failure failure of you as a human being or or even for that matter a failure of your leadership. It's failure is inevitable. Okay. And so taking accountability for
34:59 it does not diminish you as a person or a leader. Okay. In fact, accepting responsibility and doing so quickly can enhance you as a leader. So leaders have to avoid defensive self-p protection. So they need to focus on systems and decisions. They need to avoid emotional shielding and they need to treat failure as failure not as their identity. Right?
35:35 And this if if we can separate our identities from taking accountability for a debacle, we can diminish a lot of the negative emotional impact that can come from making a mistake or making a from fa from from having a failure. Okay? Uh it it's hard to do. Admittedly, it's hard to do. It's something we have to work on. But if if we we need to if we start out with having clarity that I I am no more my failures than I am my
36:14 successes. Okay. Those do not define me as a human being. They they are the outgrowth of the actions and decisions I make. And of course I would rather have successes than failures. But they but successes do not enhance my quality as a human being per se any more than failures detract from my quality as a human being.
36:50 What enhances our quality as human beings is how we deal with these two. as I have a poem behind me on on my uh board over here called if and uh let me find the line here real quickly. It's it's very apt. Um okay, if you can meet with triumph and disaster and treat those two impostors just the same. I think it's a beautiful
37:25 line, right? We rarely are we solely responsible for success. We need to share it with other people like the example I gave of General Eisenhower. But we do need to accept responsibility for failures even when it's clear that we were not the ones who caused it. This is what helps us preserve our identity. Okay? And we can separate the emotion from it otherwise. So clarity on this will improve our recovery.
38:00 Next, we need to maintain leadership visibility. So if we are absent, if we are hiding in our office or staying home, that is only going to intensify uncertainty. number one. And number two, it's going to increase speculation that indeed we must have done something heinous to cause the failure, further eroding our credibility. Right? So we need to communicate consistently. We need to remain present during the instability
38:38 and we need to project calm under pressure. And that can be difficult. If you if you look at how our society is today, there seems to be a premium put on using inflammatory language on on harsh fingerpointing on tearing things down. None of that is useful. Okay? What we need to do is be calm, rational, be available to our people as they work
39:15 to solve the problem, and consistently communicate to them our our support, our confidence in their ability to help work this situation through. Right? So visibility reinforces legitimacy. Okay. It's going to bring back to you the impremature of leadership. Finally, and this is kind of the final step. If we've if we've been if we have
39:50 immediately accepted responsibility. If we've focused on stabilizing before explaining, if we've been been successful in separating accountability from our personal identity, and if we've maintained our visibility and communication during the crisis. So then the final step if you will is to turn failure into institutional learning because if we can do that we can potentially avoid fa failure down the road. So unprocessed failure repeats
40:28 itself. But if we conduct a structured review, if we identify where decisions broke down, if we update systems and assumptions, so then we can convert failure into strength by this learning process. And and again once we've done the initial damage control the the correction and learning are the the are the prec not the precedents they are
41:04 the uh issues on which we should be most focused. Okay. So again once you've got things stabilized then we c you can start uh you can start the uh examination the exploration the investigation and but but make sure it's done in a structured way and that it's focused on developing lessons learned that can be built into the organization not assessing blame. Okay. So, here's
41:43 the strategic reality, right? Organizations are not judged solely on outcomes. So, they're judged on speed of response. They're judged on accountability behavior. They're judged on how well they preserve trust. And and and this is kind of the ultimate part. They're judged on their capacity to learn and grow and not make the same mistakes over and over again. Okay? So failure is survivable. Many many
42:20 companies and people survive failure, right? What is not recoverable is loss of trust. So we saw this uh with the Disney company uh going back now about I think it was three four years with Bob Chapeek. He had taken over as CEO of the Walt Disney Company and the company had a a number of problems. had a dispute with Governor Dantis in Florida over how um the property that is um Walt Disney World uh is governed. Um some other
42:58 issues and and and uh he was I think slow to take responsibility. Uh he did not communicate well. uh he when when he did communicate I think he was ineffective. Um and despite all those things I think he could have survived but he let them drag on so long that he lost the trust and confidence u not only of a number of rank and file employees which to a certain extent that's that's inevitable whenever there
43:34 is uh a potential political dimension to to a problem. But he lost the confidence of the board of directors which is the organization really that is responsible for deciding whether he stays or goes. Right? And so basically they decided he had to go. Right? So failure is survivable. Okay? But loss of trust is not. And if you look at situations with Starbucks uh in the past where you've had some very notable uh failures of
44:10 CEOs as opposed to say what happened with Liiaakoka at uh Chrysler uh you know what now about what three decades ago. uh Liiaakoka was able to maintain the trust of uh his board and of of the employees and and of all the other people involved in the situation whereas the prior CEOs of uh of Starbucks were not and they had to go right so as is the case with all of the
44:47 uh factors that I've discussed on the 24 now I guess I should be calling it 24 plus one episode campaign leadership discipline is required so leaders must accept responsibility before outcomes are known once it's obvious that something has failed take the responsibility and then move on to stabilizing the situation they've got to remain steady under scrutiny even when that scrutiny is intense they need to resist defensive storytelling and they need to prioritize
45:25 restoration of institutional trust over their personal image. The funny thing is if a leader is able to uh retain institutional trust during a debacle that tends to enhance that person's personal image. That certainly is what happened in the situation with Liia Aakoka. Right? So leadership is not proven in success, it's revealed in failure. So closing reflection,
46:01 Eisenhower's example, it was not about heroism, it was about discipline, right? And leadership is largely about self-disipline. So he understood a fundamental truth and that is leaders are not defined by whether they fail but by whether they remain trusted after they fail. So in war and in business the measure of leadership is not avoiding failure, it is owning it and leading through it. So I thank you
46:39 very much for joining me today. I'd love to hear about a situation in which either you failed as a leader and how you dealt with it or maybe you were part of an organization or team that failed. How did your leader handle the situation? Was it did the leader handle it well? And if so, what did the leader do? Avoid names, by the way. Let's let's I'm not looking to embarrass people. I'm looking for us to learn from the experiences that we've had. Okay? And if they if they did a great job, what did
47:14 they do that made them outstanding at that moment of crisis? Okay. Uh if you're if you uh have a colleague or a friend or family member, maybe they're they've had a leadership failure and they're fumbling around what to do, maybe share this episode with them. It will uh maybe it will give them some food for thought and help them find a way through. and for sharing your comments and stuff. Look right down below you into the show notes. There's links to social media. If you post there, I would love to be able to respond. So, I thank you again very much
47:51 for joining me today. Real quickly, schedule of shows. Mondays at 10 a.m. Pacific time, trust and estates weekly, Tuesdays at 1000 p.m. Pacific time. Uh Pacific time, like today, business lessons from the military. Wednesdays at 10:00 a.m. Pacific time, people making money. And every other Thursday at 5:00 p p.m. Pacific time, join me at Jigger's place, Jiggers's place for uh a cocktail and a schmoo and we'll talk about non- finance related topics. So, wishing you a wonderful rest of the day and signing
48:26 off as I always do. Marie Darling, you are my bell.