Why Boards Screen Out the Wrong Kind of Risk
Does a leader's public failure actually tell you less than their quiet success?
Here's a scenario I run into constantly in executive search: two final candidates for a CEO role, one with a spotless record, one with a very public failure in their past. The easy move is to screen out the second person. I think that instinct deserves a lot more scrutiny than it usually gets, and this episode is my attempt to work through why.
Drawing on research across sectors, including studies on founder performance, star analysts who change employers, and the real effectiveness of after action debriefs, I unpack why some people genuinely learn from failure and others just become defensive, or recover and repeat the same mistake. I walk through the case of Ron Johnson's move from Apple to JC Penney as a fit question rather than a simple failure story, and I lay out a three part framework for separating an examined failure from an unexamined one: an accurate account of what happened, deliberate work to understand it, and a change in behavior that other people can actually confirm.
This matters directly to CEO recruitment and to how boards approach hiring a CEO. It also matters to anyone evaluating their own career after something didn't go to plan. I talk about the asymmetry in incentives that pushes search professionals and boards toward the safer, more conventional record, and why that asymmetry can cause us to overlook real executive fit. I also touch on fairness, including research showing CEO dismissals differ by gender, and where the line sits between a good faith error and genuine misconduct.
Key takeaways:
- Failure is not one thing. A recession, a bad acquisition, a boardroom disagreement and concealment of results all get labeled failure, but they reveal completely different things about a leader's judgment.
- Success deserves the same scrutiny as failure. Ask what a leader actually contributed versus what they inherited from the team, market, or momentum.
- Properly conducted debriefs improve effectiveness by roughly 20 to 25 percent, which is strong evidence that structured review, not failure itself, drives learning.
- Previously failed founders perform more like first time founders than like founders with a prior success, a reminder that failure alone is not an advantage.
- Examined failure requires three things: an accurate account of events, deliberate work to understand your part in it, and a confirmed change in behavior.
- Ron Johnson's move from Apple to JC Penney illustrates how leadership fit depends on whether a leader's prior conditions can actually be recreated in a new setting.
- Self reported growth after a setback correlates poorly with measured change, so look for evidence from others, not just a good story.
- CEO dismissals and broader leadership dismissals differ by gender, which means the same event can get interpreted differently depending on who it happened to.
Connect with Jason: https://www.linkedin.com/in/jasonbaumgarten/
Email the show here: jason@fithappens.fm
Email the show here: jason@fithappens.fm
FitHappens is hosted by Jason Baumgarten, Former Head of the Global CEO and Board Practice at Spencer Stuart. The show covers CEO succession, hiring a CEO, board of directors dynamics and governance and leadership fit and performance. New episodes every week at fithappens.fm.
00:00 Two final candidates for CEO
02:16 Does hardship really make you better
02:56 Why the word failure does too much work
04:22 Industry performance and CEO departure
05:46 The incentive to pick the safer record
06:33 What we owe the successful candidate too
07:19 Founders who failed before and what changed
08:13 Why debriefs improve effectiveness 20 to 25 percent
11:05 Ron Johnson, Apple and JC Penney
12:32 Star analysts who changed firms
14:33 Examined failure versus examined success
15:42 Building a credible account from a hypothetical candidate
19:05 Why some polished stories shouldn't win trust
19:31 Growth after trauma and the evidence gap
20:01 Gender differences in leadership dismissal
21:14 What the Army's after action report teaches us
22:22 An exercise for your own career
