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.