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PART ONE
SUCCEEDING
Chapter 2
BATTLE-HARDENED CONFIDENCE

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Consider those one hundred employees again – all vice presidents at the same company. As their bosses size up this group, some qualities are easier to spot than others. Passionate curiosity? It’s there for all to see. There’s an energy, a buzz, from people who have it, and you can pick them out of a crowd.

Other qualities are tougher to discern, especially the ability to handle adversity. Everybody faces challenges of some kind or another in their life, but some people deal with adversity better than others. And then there are those who embrace it, who relish it, who want the tough assignment when the pressure is on. These people have plowed through tough circumstances, and they know what they’re capable of handling. They have a track record of overcoming adversity, of failing and getting up off the mat to get the job done, no matter what. They have battle-hardened confidence.

The same is true for companies. Many CEOs say their corporate culture has been strengthened in painful periods when nothing seemed to be working, and the leadership had to pull everyone together to establish their core values and beliefs.

If there were some test to find out whether a person had this quality, it would be a huge moneymaker. But people, and companies, reveal how they deal with adversity only in the context of new challenges – when they are faced with potential or real failure and the status quo is not an option. The best predictor of behavior is past performance, and that’s why so many CEOs interview job candidates about how they dealt with failure in the past. They want to know if somebody is the kind of person who takes ownership of challenges, or starts looking for excuses because there are too many factors beyond their control.

People can talk a good game in job interviews, but that talk can seem meaningless when someone is confronted with a difficult task and the moment of truth arrives. In such circumstances, some people fold.

“I think hiring great people remains extremely, extremely hard,” said Jen-Hsun Huang of Nvidia. “The reason for that is this: It all comes down to how somebody deals with adversity. You can never really tell how somebody deals with adversity, whether it’s adversity that’s created by the environment or adversity that you’re creating for them. As the CEO, as a leader, sometimes you have to put people in the hot seat – not because you want them to be in a hot seat, but because the hot seat needs to have somebody sitting on it. And so you need a great player on it. When you have a difficult situation and you need somebody to take it and run with it, some people just take it and make it happen. They feed on adversity. There are some people who, in the face of adversity, become more calm. When the world is falling apart, I actually think my heart rate goes down. I find that I think best when I’m under adversity. Some people see adversity and they just cower, as talented as they are. You could ask them about the adversity they had in the past, but you never really know the intensity of that adversity.”

Many CEOs seem driven by a strong work ethic forged in adversity. Perhaps they started working at a young age and always had jobs as they grew up. Others worked because they had little choice, because they grew up in homes where money was tight. As they moved up in organizations, the responsibilities grew in scale, but the attitude remained the same – this is my job, and I’m going to take care of it, and own it. Because of that attitude, they are rewarded with more responsibilities, challenges, and promotions.

“I grew up dirt poor,” said Carol Bartz, the CEO of Yahoo. “My mom died when I was eight, so my grandmother raised my brother and me. She had a great sense of humor, and she never really let things get to her. My favorite story is when we were on a farm in Wisconsin; I would have probably been thirteen. There was a snake up in the rafter of the machine shed. And we ran and said, ‘Grandma, there’s a snake.’ And she came out and she knocked it down with a shovel, chopped its head off, and said, ‘You could have done that.’ And, you know, that’s the tone she set. Just get it done. Just do it. Pick yourself up. Move on.”

Nancy McKinstry, the CEO of Wolters Kluwer, the Dutch publishing and information company, also grew up in modest circumstances and learned to deal with the challenges of juggling schoolwork and jobs.

“I grew up without a lot of money,” McKinstry said. “My mother was a schoolteacher and my parents were divorced when I was fairly young. So I watched my mother support a family on a schoolteacher’s salary, which wasn’t very much back in those days, and I watched her persevere. What I learned from her is the value of education and that hard work can make a difference. Because we didn’t have a lot of money, I worked all the time. So when I was in college I worked two or three different jobs to fund my way through. So that ability to keep a lot of balls in the air and keep adapting to situations to try and make things happen every day was something that stuck with me.”

When she’s hiring, she looks for this quality in others. They don’t necessarily need to have grown up in a house hold where money was tight. She’s just looking for evidence that they handled difficult challenges.

“I like hiring people who have overcome adversity, because I believe I’ve seen in my own career that perseverance is really important,” McKinstry said. “And if you can overcome some obstacle and keep moving up the field, it’s tremendous. In any business you’re going to be confronted with challenges, and so how you overcome them becomes important to your ability to drive the results forward. So when I interview folks, I will ask them directly: ‘Give me an example of some adverse situation you faced, and what did you do about it, and what did you learn from it?’ The people I’ve hired who have had that ability to describe the situation have always worked out, because they’re able to sort of fall down, dust themselves off, and keep fighting the next day.”

The CEOs’ stories help bring to life a concept in psychology known as “locus of control.” In general, it refers to a person’s outlook and belief about what leads to success and failure in their life. Do they tend to blame failures on factors they cannot control, or do they believe they have the ability to shape events and circumstances by making the most of what they can control? In other words, do they make the most of what ever hand they are dealt? It’s not just a sunny attitude. It’s a positive attitude mixed with a sense of purpose and determination.

Ursula Burns of Xerox grew up poor on the Lower East Side of Manhattan, watching her mother struggle to raise her and her brother and sister, controlling what she could about their circumstances. Burns embodies this quality herself – making the most of those things she can control – and she wants her employees to embody them, too.

Burns’s mother made ends meet by looking after other children. She also ironed shirts for a doctor who lived down the street and cleaned his office, bartering for things like medicine and even cleaning supplies. Burns’s mother had many sayings – and she repeated them, often in blunt terms, over and over. “Where you are is not who you are,” she would tell her children. “Don’t act like you’re from the gutter because you live in a place that’s really close to the gutter.”

She set firm expectations, Burns recalled. “She was very, very black-and-white and very clear about what responsibilities we had. One was that we had to be good people. And the second thing was that we had to be successful. And so her words for success were, ‘You have to give’—and she would say this all the time—‘more than you take away from the world.’ ”

Her mother, who died before she could see her daughter rise to the top at Xerox, also insisted that her children get a college education. “You have to worry about the things you can control,” she would say. “Don’t become a victim.”

It was a theme that Burns herself touched on in a big meeting with Xerox employees not long after she took over as CEO. The lousy economy, the past boardroom dramas at Xerox – it was time to move on. She repeated one of her mother’s sayings to a gathering of hundreds of sales reps: “Stuff happens to you, and then there’s stuff that you happen to.” Grammarians might take issue with the phrasing, but the message is clear. Don’t let circumstances or potential excuses get the better of you. Stare them down, and make things happen.

Andrew Cosslett of InterContinental Hotels Group offered another example of how this quality is shared by people at the top. Cosslett had a rough childhood, and grew up living largely on his own from the time he was about sixteen. His schoolwork suffered as he focused more on rugby and other sports, and being “the boy about town,” he said. He managed to scrape by in school through his teenage years, and grew more focused in his twenties.

Not long after he was named CEO, Cosslett was sitting with his top executives at an off-site meeting, and they went around the room, sharing stories about their backgrounds.

“It was a facilitated conversation as part of our time together, to try to understand what drove us, and our kind of purpose and meaning, what led us to be the people we are,” Cosslett said. “What was extraordinary was that of the ten people in the room, nine of them had had very challenging teenage years, either with broken homes, family divorces, alcoholic parents, mothers getting beaten up, brothers or sisters dying. So 90 percent of the people in that room had something like that in their background. And I don’t think that would be typical if you looked at the normal flow of society as a cross section. So there’s something about what happened to them as kids that sort of pushed them on. And I think it’s this thing about learning about your own strength that makes you mature more quickly and allows you to progress faster.”

He elaborated on this quality, and discussed how he tries to learn in interviews whether a job candidate has it.

“You learn a lot very quickly about managing in difficult situations,” he said. “One of the things that makes you see the world differently and forms you as an individual is if you’ve had to rely on your own wit and resources. If you’ve had a challenging upbringing, I think that’s part of it. I think rugby is another one because there’s no hiding place. It’s a physical confrontation, and there’s a moment of truth where you’re going to be tested in a game. Everybody sees you, even though it’s being done at high speed, and everybody knows whether you’re the type to back down or stand up. It’s never talked about, but everybody knows. And more than anything you know whether you’re that type or the other type.

“If I’m recruiting people for very senior positions, I will delve quite extensively into their personal lives. I will look into how many times in their life they’ve been seriously tested emotionally, physically – where they’ve had to stand on their own feet and deal with something that they couldn’t be prepared for. That could be in the business context. It could be in the family context, social context. And the ones who are the best, I’ve found, are the people who have had to confront something very difficult, and they’re the people you can rely on when the going gets really tough because they’ve been there, and they know what they can do.”

For some companies and organizations, this quality is so important that they build their hiring pro cess around it.

Every year, Teach for America sends its new recruits into often difficult school and classroom situations. The organization, founded in 1990 by Wendy Kopp, has learned how to screen for people who are likely to succeed in settings where the odds are stacked against them.

“We’ve done a lot of research to look at the personal characteristics that differentiate the people among our teachers who are the most successful,” said Kopp. “And the most predictive trait is still demonstrated achievement. But then there are a set of personal characteristics, and the number one most predictive trait is perseverance, or what we would call internal locus of control. People who, in the context of a challenge – and you can’t see it unless you’re in the context of a challenge – have the instinct to figure out what they can control, and to own it, rather than to blame everyone else in the system. And you can see why in this case. Kids, kids’ families, the system – there are so many people to blame. And yet you’ll go into the schools and you’ll see people teaching in the same hallway, some of whom have that mentality of ‘it’s not possible to succeed here,’ and others who are just prevailing against it all. And it’s so much about that mindset – the internal locus of control, and the instinct to stay optimistic in the face of a challenge.”

Accenture, the giant consulting firm, has made a science of trying to assess whether candidates have this quality. William D. Green, the CEO of Accenture, said the company considers screening job candidates a core competency, and has developed a system called “critical behavior interviewing” to find the right people. Accenture gets roughly two million résumés a year, and hires between 40,000 and 60,000 people. If it hires well, that gives it a huge competitive advantage. Here’s Green explaining Accenture’s critical behavior interviewing pro cess:

“It’s based on the premise that past behavior is the best indicator of future behavior. Essentially what we’re looking for is, have you faced any adversity and what did you do about it? We also know the profile of successful Accenture people, and how do we learn from the people we have who have stayed, learned, grown, and become great leaders, and how do we push that back into the recruiting pro cess to find the best matches for Accenture?

“If you get down to it, it’s what have you learned, what have you demonstrated, what behaviors do you have? Have you shown intuition? Have you shown the ability to synthesize and act? Have you shown the ability to step up and make a choice? How have you dealt with the hand in front of you, played it out?”

Green told a story of how one job candidate stood out from the crowd for him.

“I was recruiting at Babson College,” he said. “This was in 1991. The last recruit of the day – I get this résumé. I get the blue sheet attached to it, which is the form I’m supposed to fill out with all this stuff. His résumé is very light – no clubs, no sports, no nothing. Babson, 3.2. Studied finance. Work experience: Sam’s Diner, references on request. It’s the last one of the day, and I’ve seen all these people come through strutting their stuff and they’ve got their portfolios and semester studying abroad. Here comes this guy. He sits. His name is Sam, and I say: ‘Sam, let me just ask you. What else were you doing while you were here?’ He says: ‘Well, Sam’s Diner. That’s our family business, and I leave on Friday after classes, and I go and work till closing. I work all day Saturday till closing, and then I work Sunday until I close, and then I drive back to Babson.’ I wrote, ‘Hire him,’ on the blue sheet. He’s still with us, because he had character. He faced a set of challenges. He figured out how to do both. It’s work ethic. You could see the guy had charted a path for himself to make it work with the situation he had. He didn’t ask for any help. He wasn’t victimized by the thing. He just said, ‘That’s my dad’s business, and I work there.’ Confident. Proud.

“What critical behavior interviewing does,” said Green, “is get at people’s character, and you get to see where work fits in their value system, where pride fits in their value system, where making hard decisions or sacrificing fits in their value system. I mean, you sacrifice and you’re a victim, or you sacrifice because it’s the right thing to do and you have pride in it. Huge difference. Simple thing. Huge difference.”

People don’t have to climb Mount Everest or run the 135-mile Badwater Ultramarathon through Death Valley to develop battle-hardened confidence. Nor do they need to wish that they had faced more challenges growing up. Battle-hardened confidence starts with the right attitude. And attitude is the one thing that anyone can control, even if it seems like everything else is outside of their control. If you tackle challenges, building a track record of success, then battle-hardened confidence will follow.

A first step, though, requires developing a healthy relationship with failure. Many CEOs recognize that failure is part of success – particularly for people pursuing an ambitious goal – and they embrace failure and value it and learn from it. It can be a hard lesson to learn, particularly for teenagers shifting from high school, where they perhaps grew accustomed to acing exams, to college, and then into their careers.

John Donahoe, the CEO of eBay, said he learned from a mentor how to be more accepting of failure.

“A really valuable piece of advice early in my career was from a guy named Kent Thiry, who was another of my early bosses and is now CEO at DaVita,” Donahoe said. “I didn’t know it at the time, but I was suffering from a real fear of failure. Kent said, ‘You know, John, your challenge is you’re trying to bat.900.’ And he said, ‘When you were in college, you got a lot of A’s. You could get 90, 95 percent right. When you took your first job as an analyst, you were really successful and felt like you were batting.900.’

“But he said, and this is probably five years into my career, ‘Now you’ve moved from the minor leagues. You’re playing in the major leagues, and if you expect to bat.900, either you come up at bat and freeze because you’re so afraid of swinging and missing, or you’re a little afraid to step into the batter’s box. The best hitters in Major League Baseball, world class, they can strike out six times out of ten and still be the greatest hitters of all time.’ That’s my philosophy – the key is to get up in that batter’s box and take a swing. And all you have to do is hit one single, a couple of doubles, and an occasional home run out of every ten at-bats, and you’re going to be the best hitter or the best business leader around. You can’t play in the major leagues without having a lot of failures.”

Video games have been criticized in some quarters for creating slothful kids. But Jen-Hsun Huang of Nvidia said they taught him a valuable lesson about failure.

“I’ve never beaten myself up about mistakes,” he said. “When I try something and it doesn’t turn out, I go back and try it again, and maybe it’s because I grew up in the video-game era. Most of the time when you’re playing a game you’re losing. You lose and lose and lose until you beat it. That’s kind of how the game works, right? It’s feedback. And then eventually you beat it. As it turns out, the most fun parts of that game are when you’re losing. When you finally beat it there’s a moment of euphoria, but then it’s over. Maybe it’s because I grew up in that generation and I have the ability to take chances, which leads to the ability to innovate and try new things. Those are important life lessons that came along.”

Learning from failure, and recognizing failure quickly, is part of the culture at Nvidia, Huang said.

“This ability to celebrate failure needs to be an important part of any company that’s in a rapidly changing world,” he said. “And the second part of our core value is what we characterize as intellectual honesty – the ability to call a spade a spade, to recognize as quickly as possible that we’ve made a mistake, that we’ve gone the wrong way, and that we learn from it and quickly adjust. Now it came about because when Nvidia was first founded, we were the first company of our kind, but we rapidly almost went out of business. We built the technology and then it just didn’t work. And so we did everything differently.

“It was during that time that I learned that it was okay for a CEO to say that the strategy didn’t work, that the technology didn’t work, that the product didn’t work, but we’re still going to be great and let me tell you why. I think that’s what’s thrilling about leadership. When you’re holding on to literally the worst possible hand on the planet and you know you’re still going to win. How are you still going to win? Because that’s when the character of the company really comes out. And it was during that time that we really cultivated and developed what I consider to be our core values today. I don’t think you can create culture and develop core values during great times. I think it’s when the company faces adversity of extraordinary proportions, when there’s no reason for the company to survive, when you’re looking at incredible odds – that’s when culture is developed; character is developed.

“And I think ‘culture’ is a big word for corporate character. It’s the personality of the company, and now the personality of our company simply says this: If we think something is really worthwhile to be done and we have a great idea, and it’s never been done before but we believe in it, it’s okay to take a chance. If it doesn’t work, learn from it, adjust, and keep failing forward. But every single time you’re making it better and better and better. Before you know it, you’re a great company.”

John T. Chambers, the CEO of Cisco, said that the adversity he faced both as a child and as a CEO were among the most important leadership lessons he had learned.

“People think of us as a product of our successes,” Chambers said. “I’d actually argue that we’re a product of the challenges we faced in life. And how we handled those challenges probably has more to do with what we accomplish in life. I had an issue with dyslexia before they understood what dyslexia was. One of my teachers, Mrs. Anderson, taught me to look at it like a curveball. The ball breaks the same way every time. Once you get used to it, you can handle it pretty well. So I went from almost being embarrassed reading in front of a class – you lose your place, and I read right to left – to the point where I knew I could overcome challenges. I think it also taught me sensitivity toward others.

“I learned another lesson from Jack Welch,” he continued. “It was in 1998, and at that time we were one of the most valuable companies in the world. I said, ‘Jack, what does it take to have a great company?’ And he said, ‘It takes major setbacks and overcoming those.’ I hesitated for a minute, and I said, ‘Well, we did that in ’93 and then we did it again in ’97 with the Asian financial crisis.’ And he said, ‘No, John. I mean a near-death experience.’ I didn’t understand exactly what he meant. Then, in 2001, we had a near-death experience. We went from the most valuable company in the world to a company where they questioned the leadership. And in 2003 he called me up and said, ‘John, you now have a great company.’ I said, ‘Jack, it doesn’t feel like it.’ But he was right. While it was something I would have given anything to have avoided, it did make us a much better company, a much stronger company, a company that at times doesn’t take itself too seriously but also a company that doesn’t have fear. We have a lot of healthy paranoia about what can go wrong. So that’s a nice way of saying that it’s how you lead through tough scenarios that often determines where you go.”

Quintin E. Primo III, the co-founder and CEO of Capri Capital, said his experience of surviving a near-death experience also taught him a lot about leadership.

“Leadership, in my opinion, is best learned, or honed, through adversity,” he said. “And it’s in times of adversity that one must step up to the plate, and do something. You have to do this, or do that, but you just can’t stand still. You have to take action in adversity. And for me, probably the most poignant moment in my career as a leader was when my first business failed miserably. We were crushed by the real estate markets of the early ’90s. Back then we were a very young, emerging organization with no real business. We entered into a death spiral, roughly two years after I started the firm in ’88. And managing down, as the Titanic is sinking, you’re not even worried about the deck chairs.

“It taught me a lot about who I was. It taught me a great deal about the folks I had selected to work with me on this sinking ship. It was a very frightening period for me, but what I’ve learned is that one must have faith, faith in something larger than yourself, or you truly will be sunk. Whether that faith is faith in the common good of man, whether it’s in universal rhythm or karma, or whether it is simply in God, there has to be something larger than you.

“In that period of adversity for me, I discovered that my employees, as such, were really part of my family. And you will sacrifice, you will do extraordinary things to protect your family, and feed them, and clothe them. You will sacrifice greatly. And so, in this period of adversity, I had to move outside of me. It no longer was all about me, but about making sure that the hardship on those who worked with me was as modest, as low, as possible. It just shifted priorities. After graduating from Harvard Business School, and having success for eight golden years in real estate, I thought I was the next great thing since sliced bread. In abundance, it’s very easy to lose focus. But in adversity, one must have extreme focus.”

Anyone with a blemish on his résumé or academic record may be tempted to paper over it, or wish it away. That may not be necessary. Many CEOs, and others who have achieved a measure of success in their lives and are in hiring roles, have probably had some rough patches themselves. If candidates can explain what they’ve learned from those experiences, and how they dealt with them, they may find their résumé goes to the top of the pile.

Meridee A. Moore, the founder of Watershed Asset Management, a hedge fund, said that when she’s hiring she considers it a plus when she sees that candidates have suffered a dip in their academic performance at some point, then persevered to improve.

“If you’ve ever had a setback and come back from it, I think it helps you make better decisions,” she said. “There’s nothing better for sharpening your ability to predict outcomes than living through some period when things went wrong. You learn that events aren’t in your control and no matter how smart you are, and how hard you work, you have to anticipate things that can go against you.”

Understand what you can control. Don’t be a victim. Figure out a way to get things done. It’s a way of perceiving the world that will help you avoid the disappointment of failure, and stay in the right frame of mind for plowing through adversity. Challenges become learning experiences rather than disappointments. It’s often just a matter of attitude that makes people stand out. They earn the confidence of their managers that they will take on, and own, any assignment thrown their way.

For bosses, a dream employee will eagerly accept a challenge, and say those words that are music to a manager’s ears: “Got it. I’m on it.” People who want more responsibility, with a confidence born of a track record of facing down challenges, will move up.

The Corner Office: How Top CEOs Made It and How You Can Too

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