Managing negative emotions is "vital to entrepreneurs and business leaders"

Historian Nancy Koehn wrote a fascinating article about the parallels between Lincoln's presidential experience and the pressures on modern business leaders. While very few will experience anything like Lincoln's ups and downs - election to the presidency, Southern secession, military setbacks, public anger and derogation, the loss of a child, victory - all within a few short years - how he handled these can serve as a lesson to anyone.

What lesson? Koehn writes this:

The ability to experience negative emotions without falling through the floorboards is vital to entrepreneurs and business leaders. Ari Bloom, a strategic adviser to consumer-related companies and a former student of mine, put it this way: "Nothing prepares you for the emotional ups and downs that come with starting a business. There will be obstacles, big and small, that come at you every day, from personnel issues to supplier delays, to late payments or even hurricanes." Throughout, entrepreneurs must maintain their professional composure while staying true to their vision and their integrity, he said.

"Lincoln is striking because he did all this under extremely difficult circumstances," Mr. Bloom said. "Some of his ability to navigate such difficult terrain was about emotional intelligence and the deep faith he nurtured about his vision. But some of it was also about how he gathered advice and information from a wide range of people, including those who did not agree with him. This is important in building a business because you have to listen to customers, employees, suppliers and investors, including those who are critical of what you are doing."

It's true. Running a business successfully means navigating a maelstrom of emotions and experiences. Grounding, faith, resilience, vision and confidence - but not arrogance - are critical. Mistakes will happen. As will defeats. How will you respond?

Sometimes there's no time to process a failure before you have to act

We mentioned last week that learning from your mistakes takes time - time to process the complex emotional reactions people have to the failure of a project or initiative.

But what if you don't have time?

Imagine that you are Jamie Dimon, CEO of JP Morgan Chase, lauded as the most hands-on manager and best risk management CEO in the financial services industry. You've just learned that a series of trades from your "London Whale" have gone bad, very bad, and you will need to write down more than $2 billion. What do you do?

This is no ordinary mistake. This is a crisis. A leader such as Dimon has no choice but to do what University of Indiana professor Dean Shepherd, in his book "From Lemons to Lemonade: Squeeze Every Last Drop of Success Out of Your Mistakes" calls "working through the loss." He must very quickly get the facts, make decisions, provide information to the public, and maintain morale among the company's employees.

This Wall Street Journal article highlights Dimon's activities over a 45-day period, starting in early April 2012 when the first signs of a problem began to emerge into public view until the first week after the full-blown crisis began. The article paints a picture of a conflicted but ultimately resolute leader determined to guide the company through the crisis, and mindful of his own culpability.

Dimon certainly deserves much criticism for the predicament JP Morgan finds itself in. But his behavior in quickly assessing and acting on the problem has allowed him to weather the storm. Repairing the damage to the company will take years, but the crisis has been averted.

He will need to find some time on his own, this year or sometime down the line, to process his own role in the crisis and fully learn from it.

Learning from mistakes requires getting past your emotions

In his book "From Lemons to Lemonade: Squeeze Every Last Drop of Success Out of Your Mistakes," Indiana University professor Dean Shepherd discusses the need to separate actions from emotions to get the most learning from mistakes and failure. In this excerpt, Shepherd writes:

By recognizing that failure can trigger a negative emotional reaction, we realize that learning from failure requires time. It also requires a process of dealing with the emotions generated by failure to learn from the experience. That process, once learned, can become one of your strengths instead of a weakness. It can be a very positive force in your life.

I agree completely. And depending on the magnitude of the failure, that time will be shorter or longer. As I journal mistakes, I can usually come to grips with the trivial ones within a week (the journal is very important for keeping record of these). Deeper ones, such as an unexpected reversal with a sales prospect, take longer - a quarter to a year. And lessons from major setbacks, such as the failure of Shepherd's father-in-law's business (related in the excerpt), take years to absorb.

In the moment, when we realize something has gone wrong, we automatically self-protect - by blaming others, or circumstances, or denying the mistake. But after some time has passed and the hurt has dissipated, we can see what really happened, and what role our actions played in the failure. Our actions and reactions are the only thing we can change going forward, and must be the center of our learning.

[Hat tip to Failure Consulting.]

Not a news flash, but important: negative experiences are more potent than positive ones

In today's New York Times, business writer Alina Tugend (quoted elsewhere on this site) takes up a topic we know well on this site - the potency of negative experiences, and their ability to outweigh seemingly equal positive ones ("Praise Is Fleeting, but Brickbats We Recall"). A key excerpt:

Roy F. Baumeister, a professor of social psychology at Florida State University, captured the idea in the title of a journal article he co-authored in 2001, “Bad Is Stronger Than Good,” which appeared in The Review of General Psychology. “Research over and over again shows this is a basic and wide-ranging principle of psychology,” he said. “It’s in human nature, and there are even signs of it in animals,” in experiments with rats.

As the article, which is a summary of much of the research on the subject, succinctly puts it: “Bad emotions, bad parents and bad feedback have more impact than good ones. Bad impressions and bad stereotypes are quicker to form and more resistant to disconfirmation than good ones.”

Tugend also quotes one of our favorite authors, Teresa Amabile, describing the research that formed the basis for her book The Progress Principle:

“We found that of all the events that could make for a great day at work, the most important was making progress on meaningful work — even a small step forward,” said Professor Amabile.... “A setback, on the other hand, meant the employee felt blocked in some way from making such progress. Setbacks stood out on the worst days at work.”

After analyzing some 12,000 diary entries, Professor Amabile said she found that the negative effect of a setback at work on happiness was more than twice as strong as the positive effect of an event that signaled progress. And the power of a setback to increase frustration is over three times as strong as the power of progress to decrease frustration.

“This applies even to small events,” she said.

Learning from mistakes, missteps, bad experiences, etc., is so powerful because mistakes "make a deep imprint," in the words of Paul Schoemaker. The warm glow of success can cause us, by contrast, to soften and shrug off what we could have learned. Don't we want to use bad experiences to our greatest benefit?

It's not directly mentioned in the article, but I'll add that a sense of humor, especially with respect to oneself, is a significant help when it comes to accepting and learning from negative experiences.