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Critical Thinking

Want to be a Great Leader? You Need to Fail First

Critical ThinkingFOXBusiness

My dad spent his entire adult life working for the U.S. Postal Service. Not much of a risk-taker, that one. So when I got out of grad school, I took a secure job with about the biggest tech firm that would have me, Texas Instruments (NYSE:TXN), and slowly climbed the corporate ladder for many years.

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Then something happened. I was courted by a Silicon Valley startup. This was no minor league startup. It was funded by a couple of top-tier venture capital firms and boasted a rock star CEO. And let me tell you, this guy was quite a salesman. He hooked me bigtime.

This famous executive looked me right in the eyes and said, "Steve, this company is going to make it big and you are going to make a fortune off your stock options." He gave that a few seconds to sink in, then added, "Besides, once you go startup, you never go back."

He was right about that last bit of advice. The first part, not so much. The guy was actually wrong about nearly everything he ever said to me.

Funny thing is, when he and his top lieutenants were putting the full-court press on me to join their little venture, I remember feeling sort of creeped-out, as if I should check my wallet just to make sure it was still there. And young as I was by comparison to these Silicon Valley bigwigs, I had my doubts about the company's strategy. But I figured all that executive and VC firepower couldn't be wrong so I went for it.

Six months and dozens of depressing and demoralizing customer meetings later, I went back to my company's esteemed leaders and shared what I'd learned. I told them there were indeed several gaping holes in our strategy. I told them that there was no way the dogs were going to eat our brand of dog food. Did they listen? Nope. Not even a little.

I guess they were punch -drunk on their own flavor of Kool-Aid and thought they were smarter than everyone else. They tried all sorts of lame arguments to convince me that I was wrong, but it sounded suspiciously like, "tell the customers they can have any flavor they want … as long as it's cherry." Unfortunately our competitors had dozens of flavors and nobody wanted cherry.

But that wasn't the end of the saga. A few weeks later, as I was trying to explain to my brand new wife why I was right and all these high-powered execs were wrong, I started feeling as if I was trapped in a cage. It was the strangest thing. And then something even stranger happened. I got short of breath and started hyperventilating. I was having a panic attack.

My young wife -- who had instincts I never knew existed and faith in her nobody husband for no apparent reason -- advised me to quit. So I did. I had no idea how I was going to tell my dad and his bullet-proof work ethic that I had bailed out on a job after just seven months but that's what I did.

Want to know how my bosses reacted? With anger and vengeance. Not quite the proverbial "you're a quitter" and "you'll never work in this town again" but close. And they withheld my pay and expenses until the California State labor board made them cough it up. How petty can you get?

Years later after the VCs had thrown all sorts of good capital after bad, the startup finally went belly up and all those executives faded into obscurity. My decision-making track record got considerably better after that experience but only because I learned some important lessons that have served me well over the years.

Trust your gut. No matter how many people tell you that you're wrong, no matter how smart or accomplished they are supposed to be, don't let it sway what your gut is telling you. Trust your own instincts. Who knows? You just might be the next Larry Page or Elon Musk. Also, when your emotions are trying to tell you something, don't wait for a panic attack to listen. Twenty five years later and I've never had another one. Go figure.

Listen to customers. Everyone in your company has a vested interest in seeing it succeed. And that increases the odds of groupthink -- everyone breathing each other's fumes -- a thousand-fold. Customers, on the other hand, only care about their own companies. They have no skin in your game and generally have no reason to be less than straightforward about your products and services.

Question know-it-alls and listen to nobodies. "Past performance is not indicative of future results" applies just as much to business and management as it does to investing. If you flip a coin 20 times and get 20 "heads," the odds of getting a "heads" on the twenty-first toss is still fifty-fifty. Question know-it-alls and listen to nobodies. You never know which way their career trajectories are pointing, up or down. 

Learn the hard way -- by failing. I never made those same mistakes again but only because the results were so painful. That's why I never forgot those critical lessons. Confidence may come from success but wisdom comes from failure. When you flop just get up, dust yourself off, face what happened, learn from the experience and try again. If you trust your gut, listen to customers, and don't let other's past success (or lack thereof) influence your decisions, you will get it right before long.

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