What do you do when you see a résumé from a person who ran a business that failed? Not an easy question for most—the failed business owner re-entering the market too often finds that companies just don’t know what to do with her. Without a traditional ladder-like career path, some business owners just don’t “fit” traditional roles.
I have worked with some clowns in my career who automatically throw these résumés in the discard pile. People who quickly pass on former business owners as employees have various weak excuses:
- She’s too removed from doing the work day to day; can’t get her hands dirty
- Her title was President…how can I talk to her about a job as a Director or Senior Manager?
- She needs more than we can offer
- Her experience is too wide…we need a deep technical pro for this role
- And finally, the coup de grace: She couldn’t cut it as a business owner; I don’t hire failures
This is nuts. Most (but certainly not all) people who have run a business have solid credentials. We have all heard stories about failed leaders going on to be better leaders later (think Gates, Disney and even Colonel Sanders), but I also think hiring a failed business owner as an employee can add tons of value. Jeffrey Stibel, Chairman and CEO of Dun & Bradstreet Credibility Corp, covered it recently on HBR, “Why I Hire People Who Fail.”
Similar to Stibel’s article, an older article (2002) Why You Learn More From Failure Than From Success went into even more detail about the benefits:
…when a business is failing, each mistake in assumptions, planning, and implementation stands out. When a business fails, the business owners and managers who operate the business often question what went wrong in agonizing detail. …every wrong move and unwise decision is examined. They question “Why did we do that?” and “Who should have seen what was happening? Why did that happen? What could we have done differently?”
The level of detail in this examination is typically far beyond the detail that is available in looking at success….The benefit of mistakes is that they often highlight issues and possibilities that simply are not obvious and not foreseeable without the benefit of the particular experience…The manager who has been stunned by failure knows not only the importance of preparing and planning, but also that the unexpected can happen. He or she plans with an eye on a much broader range of possible situations. (emphasis mine)
People who have operated at a senior level with their necks on the line, even in a business that failed, can provide great perspective. In addition, they also see the business differently than a candidate who has progressed in a straight line through a big company’s infrastructure. The business owner:
- Understands the daily and nightly pressure of meeting payroll and paying bills
- Knows how to assess and leverage functional services (legal, accounting, etc.)
- Has a pronounced sense of risk management
- Lives the balance between attention to the here and now and long-term strategy development
And finally, I give credit to people who take the risk. Putting it all on the line, including having your name on the paychecks, is a huge developmental experience—it’s like a “lessons learned via fire hose” type of development. I am not saying every failed business owner is a good hire, but dismissing them outright is a huge miss.
My father-in-law was a successful business owner of a construction management firm. His company made it through a long haul even after the construction market changed here on the west coast. Unfortunately, two years before he would have been able to retire a little early, his company failed and much of his retirement account went into easing the pain for his younger employees. Now, he can’t even get a job at Home Depot. It’s sad and scary for our family, wondering what will be next. Thanks for an encouraging article, hopefully businesses will listen.
If you knew my story, you’d know just how refreshing this was to hear. Oh.. to be recognized for what you can do as opposed to what you “can’t” do. Thanks again.
There are no failures in business. Every situation has an outcome and every outcome provides lessons for the future. NO two scenarios are the same and you must remain very flexible and dynamic to manage. That is how “seasoned” business men and women are developed. I hope as a result of this post, someone out there gets a chance to share what you can only learn by being in the trenches, win or lose. Cheers!
Failures present tremendous opportunities for learning, and that’s an argument in favor of hiring a failed business owner.
It really depends on the position, however, and the culture of the company doing the hiring. If the culture is one of rigid structure, hiring a former business owner presents lits of risk.
While completing my business degree, majoring in accounting, my part time business was photography. As an entrepreneur and photographer, I had a LOT of first hand experience with: marketing, capital budgeting, strategic alliances, cash flow, profitability, quality control, operations (a wedding actually required at least 40 hours of work), to name a few. All without the secure paycheck; can you infer hard work and dedication?
Leadership too: leading large groups of people with public speaking and entertainment through a very stressful day. What percent of the staff in corporations, including HR, can do that?
So, I knew a Lot about business and business issues from first hand Experience. Exactly what you want accountants to know about.
But the reaction I got after applying for accounting positions was that they didn’t need a photographer. Duh.
How do you think I would rate HR on imagination, and recognizing talent?
Thank you so much for writing the article!