In 1991 I, along with my business partner, suffered a financial meltdown. We had built a successful publishing company, but our growth outstripped our working capital. We simply ran out of cash.

For a while our distributor funded us in the form of cash advances on our sales. But eventually, their parent company wanted those advances back. Although we didn’t officially go bankrupt, the distributor essentially foreclosed on us and took over all our assets.

This was a difficult time personally. I was confused, frustrated, and very angry. Initially, I blamed the distributor. If they had only sold more, as they had promised us, none of this would have happened, I thought. It’s their fault.

But eventually I looked in the mirror and had to acknowledge that I could not move on until I learned from this experience. Though incredibly difficult and humbling, I am now thankful for this period in my life. I learned some critical, life-changing lessons. I am convinced that I would not be where I am today if I had not had this failure.

But not every failure ends so well. Sometimes, people suffer a setback and never recover. I don’t think it has to be this way. It is all in how you process it. I am convinced, that if you are going to succeed, you must learn to deal powerfully with failure.

I think there are at least five components to turning failure to your advantage:

1. Acknowledge the failure. This is where it begins. To my knowledge, I have never fired anyone for failing per se. Failure is natural if you are striving to deliver big results. The problem comes when you fail and then refuse to acknowledge it.

   Several years ago, I had an employee who was floundering. He wasn’t delivering the results we expected. That was certainly a problem, but it wasn’t the primary problem. The problem was that he refused to acknowledge that he had a problem. He kept defending himself. In doing so, he only convinced us that he didn’t “get it.” As a result, we had no choice but to let him go.

   Once you acknowledge failure, you take away it’s power. You can then begin to turn it into something positive.

2. Take full responsibility. You won’t get anywhere as long as you blame others for your failure. As long as the responsibility is external—outside of you—you are a victim. Why? Because you can’t control others. You can only control yourself.

   But when you take responsibility for the failure and become fully accountable for it, you take back control. Suddenly you realize that you could have done things differently. You open the door to possibility—and to creating a different outcome in the future. But this can only happen when you acknowledge the failure and own it.

3. Mourn the failure. I am not simply exhorting you to have a positive attitude. Failure stings. It hurts—sometimes deeply. Many times there are very real and serious losses. Often times there is collateral damage. Other people are hurt. Sometimes innocent people.

   It’s okay to feel sad about these things. Sometimes it takes a while to recover. When I had my financial setback in the early 90s, I mourned for weeks. It couldn’t be rushed. In fact, I think the reason I was able to bounce back relatively quickly was because I mourned the loss so deeply. I dealt with it throughly and got it behind me.

4. Learn from the experience. Even failure can be redemptive if you learn something from it. It doesn’t have to be career-ending. In fact, it can be career-building—if you take the time to wring all the juice out of the lemon.

   Honestly, there are just some things you can’t learn—or won’t learn—without failing. I wish it were different. But pain is a powerful teacher. Like Friedrich Nietzsche, the 19th century German philosopher, once said, “That which does not kill us makes us stronger.” So true.

   But it only makes us stronger if we thoroughly process the experience and determine what we could have done differently and will do differently next time around.

   As Ilene Muething of Gap International has taught me, it is helpful to ask “What was missing?” rather than “What went wrong?” The former shuts down possibility and often results in blaming. The latter opens up possibility and results in learning.

5. Change your behavior. George Santayana, another philosopher, said, “Those who cannot learn from history are destined to repeat it.” And we really haven’t learned anything until it affects our behavior.

   If we keep doing the same things that led to the failure, we are destined to get more failure. We have to be willing to change. And it really does start with us. This is the one thing we have control over.

6. Enter whole-heartedly into the next project. You can’t allow failure to hold you back from the next venture. If you fall off the horse or a bicycle, you have to get back on—immediately.

   If you don’t do this, the failure gets magnified in your mind. Wait long enough and you might never get on at all! Instead, you have to put the past behind you and move forward.

Again, failure is inevitable if you are going to tackle significant goals. You have to learn to make it work for you. In doing so, you are planting the seeds of your eventual success.

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