The Power Of Failure

We continue to shower them with riches, prestige and glory. We make movies about them. We write books about them. We seriously overpay and then envy them. This year alone, while millions of others suffer from the Great Recession, bankers and traders are expected to be paid — incredibly — another estimated $144 billion in compensation and benefits. Accordingly, Wall Street remains the No. 1 destination for our best and brightest.

The question is why? Why do we tolerate the questionable morality and behavior that too many on Wall Street get rewarded to exhibit? Why do we put up with repeated Wall Street-generated financial calamities? Why do we seem to excuse one insider-trading and pay-for-play scandal after another? Why haven’t we woken up from our generational slumber and realized that we would be better off rewarding real engineers, not financial engineers?

Part of what we must overcome here is human nature. Not for nothing did the Renaissance poet Samuel Daniel write in “Lady Margaret”: “Unless above himself he can erect himself, how poor a thing is man.”

We are a species that is always striving. “When we observe other species, they live the way they live,” explained Richard Brodhead, the president of Duke University, at a recent meeting at the school’s Kenan Institute for Ethics (of which I am a board member). “But you don’t see them trying to live beyond themselves or wanting to become the best chimpanzee they can be.”

Unfortunately, this focus on achievement has now been pushed back earlier and earlier in life. Where, once upon a time, little was expected of children in childhood, Brodhead continued, “that’s not true anymore. Achievement is aspired to from the moment of birth, if not before.” Nowadays parents hire tutors to correct the pitching motions of little leaguers. “There has been a kind of ‘totalization of aspiration’ in our culture,” he said. Brodhead wondered about the consequences “when you imbibe a culture of aspiration from someone else, do you really care about the values that are driving you so hard? Because at some point you want people to actually care about the value of the thing that is regulating their life.” For too many, success on Wall Street is the ultimate elixir.

Part of what we must come to grips with is the fact that in the past two decades Wall Street has failed us time and time again. Worse, its top executives refuse to admit their mistakes — while still making sure to get paid millions of dollars — and, therefore, cannot possibly learn from them. They prefer to speak about “once-in-a-lifetime tsunamis” or complain about taxpayers bailing out other firms but not Lehman Brothers. “Until the day they put me in the ground, I will wonder” why Lehman failed, bemoaned Richard Fuld, Lehman’s former chief executive, in October 2008. Not once has Fuld admitted that perhaps he shared in the responsibility for what happened at his firm. He is not alone, of course. Declared Jamie Dimon of JPMorganChase at the beginning of the year: “I am a little tired of the constant vilification” of Wall Street.

But true leaders understand the importance of making mistakes and learning from them. In a legendary graduation speech at Stanford University, in 2005, Steve Jobs emphasized the importance of failure to success, particularly after he was fired, at age 30, from Apple, the company he co-founded. “It turned out that getting fired from Apple was the best thing that could have ever happened to me,” he said. “The heaviness of being successful was replaced by the lightness of being a beginner again, less sure about everything. It freed me to enter one of the most creative periods in my life.”

In his May 2009 baccalaureate address to Duke’s graduating class, Sam Wells, the dean of Duke University Chapel, hoped the students would “never be dazzled by your own success … and not pretend success is everything or success makes you immortal. And, most of all, that you’ll let your life begin the day you really, seriously fail, and let that day be the day you discover who you truly are and whether that failure is really in a cause that will finally succeed. … The most powerful person in the world is the one who isn’t paralyzed by the fear of their own failure.”

There is enormous power in failure, especially when one learns from it. Wall Street has been making a lot of mistakes lately. But will it bother to ever learn from them? And will we have the courage to return Wall Street to a less exalted place? The answer to these questions will increasingly come to define what America is all about in the future.