Everybody tells us to celebrate failure, but nobody ever comes to the party. Failure is an essential ingredient for success, but it is absolutely no fun. I think the main reason I am an effective advisor and coach is that I have failed so many times! Let me tell you about a couple of my colossal failures.
The Worst Hire:
The worst hire I ever made was Mike Potter. He was trained at GE. Older than me. I recruited him for a year. I hired his wife. I started offering him $10,000 more in annual salary every month until he finally said yes. Of course, I circumvented our agreed upon hiring process and didn’t require that he go through our industrial psychologist for assessment. Eventually I did have him see our corporate shrink and the psychologist told me it would never work. That was about a $2 million dollar mistake.
What’s a S.L.U.G.
I was in trouble at our bank and was put into special loan group—on my 30th birthday. Banks have really humorous names for the bad customer department. Our bank called it the special loan underwriting group or SLUG for short. I got slugged on my birthday. The ironic thing was that the bank was also my biggest customer, so I came in all full of swagger, piss and vinegar, figuring they’d never fire a major vendor since they represented about ½ of our total AR. It wasn’t much of a birthday……..
I got involved in a joint venture with a Chinese company in 2005. We had a wonderful relationship until we didn’t. I didn’t think I needed to spend a lot of money on lawyers, or complicated contracts. After all, I had stayed at Jack’s home, he at mine. I even offered to allow his son to come to the US for the summer and live with us. Then one day, Jack’s emissary called to tell me they were going around us and direct to our customers, that I had spent two years cultivating. It was a disaster. I had a warehouse full of Chinese made massage chairs and no customers. It forced us to close this division of our business. Some people wanted to blame the cultural differences between the Chinese and Americans. I blame myself. Funny thing, is that a year later, the Chinese realized the value of our partnership and wanted to get re-married. I told Jack to go to hell. Now that was a good decision.
My best employee ever was Christine Olson. She’s still an awesome manager. On the Monday before thanksgiving in 1996, she told me she wanted to terminate one of her employees. The gentleman had lost his infant son a month earlier and was not ready to be at work. I suggested to Christine that we carry him through the end of the year. Her response, which I will never forget, was that it was unfair to the gentleman. He shouldn’t go into Christmas thinking he’d have a job, when he wouldn’t. I allowed Christine to let him go the next day. A few weeks later he called to thank me. I couldn’t believe it. But he understood her logic and appreciated her humanity. I’d give Christine a kidney if she asked me for it. She’s one in a million.
To read more about learning from failure, check out this article by local entrepreneurs in the Milwaukee Biz Times.