When Lotika Pai, ’08, arrived for her first day on the job, she was told to leave. Her role had been eliminated. It wasn’t personal; Pai’s start date was September 15, 2008—the same day that Lehman Brothers, her would-be employer, filed for bankruptcy.
After enduring a competitive recruiting process and graduating from business school, Pai looked forward to switching into the fast-paced world of investment banking. The setback was understandably terrifying. “It was the sense of being overwhelmed by something that I had no control over,” she recalled. “I just happened to be in the wrong place at the wrong time.” In the next few years, Pai got valuable experience as an investment banker at Barclays (which acquired Lehman Brothers days later), but she never forgot the anxiety she felt during the turmoil.
“That situation was pivotal for me, in terms of wanting to change the trajectory of my career,” said Pai. That first setback with Lehman inspired Pai to consider entrepreneurship once she had finance experience under her belt. Last year, she cofounded Powwful, a Chicago-based women’s activewear brand that aims to change the conversation around fitness and empowerment. “Ultimately,” Pai said, “I wanted to be more in control of what happened to my career.”
Pai isn’t the only one whose career changed course as a result of overcoming professional snags, stumbles, or failures. Alumni often deal with setbacks—both big and small—after graduating from Booth. Though obstacles are inevitable, knowing how to turn adversity into a learning experience is the key to building a career. For many alumni, that’s meant persevering past that initial roadblock to create long-lasting learning opportunities and “aha” moments that eventually pave the way for well-deserved success. Whether your company falters during a recession or announces a round of layoffs, or you have to deal with a more personal failure, learning how to make lemonade out of lemons is crucial.
Turning a Setback into an “Aha” Moment
“When you encounter a rough patch, you evolve as an individual,” said Chris Collins, associate dean for leadership development for the Full-Time MBA Program. In Leadership Effectiveness and Development, the only mandatory MBA course at Booth, Collins works with students to understand failure. Rather than focusing them on being high performers in the workplace, Collins prepares students to develop a habit of learning from challenges on the job. He encourages them to set goals around learning, in addition to traditional performance goals.
Rather than simply aiming to complete a project in record time, for instance, it’s important to also set goals around the learning experience and skills you gain as a result of the effort, he says. Overprioritizing performance-related goals can create unrealistic expectations for ideal results that don’t leave room for inevitable mistakes.
“The more tightly you are orientated around [performance], the less you may be valuing learning goals, and the harder it is to bounce back from taking a hit,” he said. Instead of just counting a setback as a mistake and moving on, the approach Collins teaches shows how failures contribute to a “renewed growth cycle,” helping students make the necessary changes in the wake of future missteps. “Successfully navigating a failure allows you to grow,” Collins said. “It also helps make people more open to future development.”
Bouncing Back from a Burst Bubble
When Subhash Makhija, ’96, cofounded procurement software firm GEP with his wife, Roopa Ghandi, ’96, and fellow Booth graduate Jagadish Turimella, ’97, he thought a well-received seed round of funding would result in investor interest down the line. That didn’t happen. It was the year 2000, and as the dot-com bubble burst, investors were hesitant to back a one-year-old technology company. “We ran out of money and our investors told us to shut down and take the tax write-off,” he recalled.
When you are going through a setback, most people don’t view this as an opportunity. But you need to have the right mind-set and the right emotional balance to see things from a different perspective.
But they never shuttered. Instead, Makhija and his cofounders took salary cuts, pivoted to set up operations in India, and changed the business model. “When you are going through a setback, most people don’t view this as an opportunity,” he said. “But you need to have the right mind-set and the right emotional balance to see things from a different perspective.”
The move to shift some operations abroad to India ended up being a strategy for success. The company—now headquartered in Clark, New Jersey, but with offices around the globe—is nearing 3,000 employees and growing at a 30 percent clip each year. Last year, Makhija was named EY Entrepreneur of the Year in the technology solutions and staffing category for New Jersey. He’s learned it takes effort and willpower to get past a setback: “It’s not about intelligence; it’s about focus and positive attitude.”
Bouncing back from a mistake often requires some outside-the-box thinking, as Eric Belcher, ’95, CEO at the Chicago-based global marketing firm InnerWorkings, once learned. When expanding to France, InnerWorkings acquired a local company to get into the market. The result was disastrous. The entrepreneurs who were acquired committed fraud. Belcher was forced to make a public restatement of the firm’s financials based on the purchase of the new company.
But rather than abandoning InnerWorkings’ plans abroad, Belcher doubled down on resources that the firm would spend in France and combed through the wreckage of the acquired business to see what was most salvageable. For him, it was a way to overcome failure rather than simply accept it. “We had a disastrous situation and our immediate response was to invest further,” he said. “Once you looked past the tragedy, there were some good elements inside the business.”
Belcher has learned to rebound from adversity more quickly now than from the failures he faced when he was starting out as an entrepreneur. “I found myself much more emotionally drained with setbacks earlier in my career,” said Belcher. “I’ve developed a much more balanced attitude toward reacting and managing through it.”
Learning from the Patterns of Failure
Getting crushed early on in her career proved especially difficult for Full-Time MBA student Alexandra Breuer. When creating the concept for Ezza, a manicure space with a focus on a consistent experience, Breuer was not accepted into the New Venture Challenge in her first year at Booth. “Having these doubts in March and May of your first year, when most people have their internships, was pretty devastating,” she recalled.
That failure was a gift. It gave me the purpose of showing that this problem is worth solving.
But the setback was temporary. She went back to the drawing board and asked for feedback from Steve Kaplan, Neubauer Family Distinguished Service Professor of Entrepreneurship and Finance, and Ellen A. Rudnick, adjunct professor of entrepreneurship. Breuer zeroed in on what really mattered to her in the space: focusing on busy women on a time budget who were looking to replicate an experience with each visit to the nail salon. “I could have accepted the rejection as a defeat and moved on with my life, or accepted it as a learning opportunity,” she said. “I made that conscious decision to take this as a learning opportunity.”
Later that spring, Breuer was accepted into the Polsky Accelerator, a 10-week intensive summer program that allowed her to refine her concept to focus on the unique customer problems in conventional beauty salons. She has since decelerated her studies to attend nail school and launched a pop-up salon to prove her concept. This year, she won third place in the New Venture Challenge, closed a round of preseed funding to open her first Ezza salon in Chicago, and was part of the Project Entrepreneur accelerator program. She’s now running the company out of the 1871 coworking space in Chicago’s Merchandise Mart. The failure early on, she said, “forced me to really look at the weakness of my initial business plan.”
Professor Harry L. Davis, Roger L. and Rachel M. Goetz Distinguished Service Professor of Creative Management, advises students to view mistakes not as setbacks but rather as surprising or unexpected outcomes. “It’s not, ‘I made a mistake,’” he said. “It’s that you received disconfirming evidence that led you to reevaluate the assumptions or rules by which you have been operating.”
Admitting you’ve had a setback can be a powerful tool, and it’s not enough to learn about the failures of others. “It’s important to encourage people to see learning from mistakes as a powerful way of engaging,” Davis added.
A New Perspective on Failure
When the dot-com funding dried up on GEP’s Makhija and Ghandi, it presented a professional stumbling block. But personally, they were thankful for the chance to build the company without the pressure of answering to outside investors. The couple took advantage by spending time with their two young children and finding work-life balance. “We had small kids and we were able to spend more time with them and travel less,” Makhija recalled. “We learned that you have to look at life from multiple perspectives.”
At GEP, Makhija has implemented informal reflection meetings as a way to recover when client work turns out less than ideal. The process is “built into the culture,” said Makhija. “People fail all the time and we have to accept it.”
Breuer said the opportunity to reimagine her nail-salon concept after the initial setback encouraged her to keep going, even as classmates were off competing for internships. “That failure was a gift,” she said. “It gave me the purpose of showing that this [concept] is actually a good idea and this problem is actually worth solving.”
There’s no timeline for turning a failure into a win, said Pai. Her transition from investment banking to entrepreneurship did not happen overnight. The first company she launched—an educational IT startup aimed at young children—closed after a much larger firm offered the same technology. She leveraged the experience for her next venture, Powwful, which she cofounded in December 2016. The company’s activewear is now available at retailers such as Fleet Feet, and they are gearing up for a launch in China and Taiwan later this year. “There are lessons that are applicable for any situation, and that kind of adversity makes you well prepared for it,” she said.
In the LEAD course, Collins advocates analyzing one’s default behavioral patterns and style in search of those behaviors that contribute to setbacks and failures. “When [students] see their own default behavioral patterns in class simulations, that’s the point at which self-awareness empowers them to decide if change is needed,” he said. For some people, even small actions can be experienced as failures. For example, he said, some students want to raise their hand in class, but don’t, because they anticipate failure, worried that their answer won’t be intelligent enough.
As a developmental psychologist, Collins advocates that people build resilience to manage their own emotional response in a given situation, especially when it’s a setback. Throughout the course, students learn about appraising, or reflecting on, experiential class activities, to understand both the impact of their behaviors and the emotional consequences for themselves. “Practicing this helps it become a life skill,” he said. “If you are not investing a couple of hours every week for your own development and devoting some intentional time to your own growth, you are really missing out.”
Belcher sees his own failures—be it public financial restatements or poor hiring decisions—as a way for his company to become more competitive. On an individual level, he’s increasingly eager to build his skills as a result of adversity. “The failures, more than the successes, drive me to focus better, to be more determined going forward,” he said. “They give me that extra effort necessary to win.”
—By Alina Dizik