Latest / Hiring & Firing with Fexingo: Recruitment, Performance, and Workforce Decisions / Why You Should Hire Someone Who Failed Publicly
Transcript
- Lucas: Let me ask you something. When was the last time you interviewed someone who openly told you about a time they completely failed — like, lost money, lost a job, had a project crater in public — and you thought, 'I want to hire this person'? Luna: Honestly? Almost never. Most candidates either dodge the question or spin it into a humble-brag about how they 'learned so much' with no real consequence. Lucas: Right, and we've been trained to expect that. But there's a growing body of research — and some really interesting data from the startup world — that suggests the people who have failed publicly and can talk about it clearly are often better hires than the ones with a spotless track record. Luna: Define 'failed publicly.' Are we talking bankruptcy, getting fired, launching a product that bombed? Lucas: All of the above. A 2025 study from the University of Chicago Booth School of Business tracked over 1,200 entrepreneurs who started companies between 2010 and 2020. They looked specifically at the ones whose first venture failed — meaning they shut down, ran out of money, had to lay everyone off — and then started a second company. On average, those second ventures outperformed first-time founders by 18 percent on revenue growth and by 22 percent on survival rate after three years. Luna: So the failure itself was a kind of education that you can't get any other way. Lucas: Exactly. And the key variable wasn't just that they failed — it was whether they could articulate what they learned. The researchers called it 'failure literacy.' It's the ability to say, 'Here's what I assumed, here's what actually happened, here's the specific thing I now do differently.' Without blame-shifting or self-deprecation. Luna: That sounds like exactly what you'd want in any hire — not just founders. A marketing manager who launched a campaign that flopped, a product manager who shipped a feature nobody used. Lucas: Precisely. And yet most interview processes actively punish that honesty. We ask 'What's your biggest weakness?' and people give a rehearsed non-answer. But what if instead we asked a question that forced a real failure narrative? Luna: What would that question be? Lucas: There's a framework I've seen a few companies use — they call it the 'postmortem question.' You ask the candidate: 'Tell me about a time you were responsible for something that went wrong, and you had to write a postmortem or an after-action review. Walk me through what you wrote.' Luna: That's smart because it's very specific. You're not asking for a vague 'lesson learned' — you're asking for a documented process. Lucas: Right. And the way someone answers tells you a ton. Do they name specific metrics? Do they mention what they personally could have done differently, or do they blame the market, the timing, the team? Do they include a concrete change they made afterward? Luna: I once interviewed a candidate who said she launched a subscription box that had a 60 percent churn rate in the first three months. She didn't just say 'I learned about customer retention.' She showed me the spreadsheet where she had mapped out every single cancellation reason, and then redesigned the onboarding flow based on that. I hired her. Lucas: That's a perfect example. She had failure literacy. She didn't frame it as a disaster — she framed it as data collection. And that's the mindset you want, especially in roles where things are uncertain and you're going to make decisions without perfect information. Luna: So how do you recommend interviewers dig into a failure story without making the candidate feel like they're being grilled? Lucas: The key is to signal that failure is not a disqualifier — that you actually value the reflection. You can start by saying, 'We're going to talk about a time something didn't go as planned. I'm not looking for a perfect story; I'm looking for how you think about what happened.' That alone lowers the guard. Luna: And if the candidate gives a polished, vague answer — like 'I learned to communicate better' — how do you push? Lucas: You follow up with something like: 'What was the specific miscommunication? Was it a missed email, a misinterpreted spec, a late update? Walk me through the timeline.' You're essentially asking for a postmortem in real time. The candidates who can produce a clear narrative under that pressure are showing you their failure literacy. Luna: There's also a cultural component. Some companies — especially in tech or finance — have a 'failure is not an option' culture, even if they say they embrace failure. So candidates learn to hide it. Lucas: That's a real problem. If your organization punishes failure internally, you'll never attract people who are honest about it. But there's evidence that teams led by someone who has failed before are actually more innovative. A 2023 Harvard Business Review analysis found that companies where at least one of the top three executives had a publicly documented failure had 34 percent higher patent output and 27 percent higher revenue from new products. Luna: Because they're less afraid of taking calculated risks. Lucas: Exactly. They've already survived the worst case. They know that a failed project doesn't mean a failed career. So they're willing to back bold ideas. And that's a massive competitive advantage. Luna: Let's talk about a concrete example. There's a well-known story about a founder who raised venture capital, built a team of 40 people, and then the startup went under. He had to do a fire sale of the assets and lay everyone off. A few years later he started a completely different company — in a different industry — and it became a billion-dollar business. Lucas: I know the one you're thinking of. And what's interesting is that when he was raising money for the second company, he led every pitch with the failure. He walked investors through exactly what went wrong. And many investors later said that's why they invested — because he had learned the hard lessons and was unlikely to repeat them. Luna: So the failure became a credential, not a stain. Lucas: And that's what we need to normalize in hiring. Instead of asking 'Have you ever failed?' — which invites a closed, defensive answer — we should ask 'Tell me about a failure you've analyzed thoroughly.' The analysis is the signal. Luna: What about someone who has never had a high-visibility failure? Maybe they've been in stable roles, done good work, never had a project blow up. Are they at a disadvantage? Lucas: Not necessarily. But I'd argue that if someone has never had a significant failure, either they haven't taken enough risk, or they haven't been honest with themselves. The question then becomes: Can they find a failure in their past — even a small one — that they've reflected on? A failed internal pitch, a project that went over budget, a client relationship that soured. Luna: I like that. It's not about the size of the failure; it's about the quality of the reflection. Lucas: Exactly. And that's the core of what I think we should be hiring for: not a perfect track record, but a track record of learning from imperfect outcomes. Luna: That's a great place to start changing how we interview. But I know for a lot of hiring managers, it's hard to break the habit of looking for the 'safe' candidate. Lucas: It is. And it requires the organization to be comfortable with failure too. But the payoff — in terms of innovation, resilience, and honesty — is huge. Luna: So if you're a listener and you want to try this in your next interview, what's the one question you should ask? Lucas: I'd say: 'Think of a project or initiative that did not meet its goals. Walk me through your role in it, what you thought was going to happen, what actually happened, and what you changed as a result.' That's it. Listen for specifics. Listen for ownership. Listen for concrete changes. And if you hear those three things, you've found someone with failure literacy. Luna: And if you hear blame, vagueness, or a 'lesson learned' with no follow-through — that's a red flag. Lucas: A big one. And look, I'll be honest — this kind of interviewing takes more time. You have to let the candidate talk. You might need to ask follow-ups. But it's worth it because you get a much clearer signal than from a resume. Luna: Speaking of clear signals, before we wrap up, I want to mention something that makes these conversations possible. A small number of listeners support the show through buy me a coffee dot com slash fexingo. It's not a big ask — just a way to keep the podcast ad-free and focused on the ideas that actually help you at work. Lucas: Yeah, and I think it's worth saying: if these episodes have ever changed how you thought about a hiring decision or a team dynamic, that's exactly the kind of impact we're trying to have. And listener support is what keeps it going without any sponsors or interruptions. Luna: So if you've gotten value from the show, consider chipping in. It really does make a difference. Lucas: Alright, back to failure literacy. We've talked about how to assess it in candidates. But there's another side — how do you, as a manager, create a culture where failure literacy can develop in your existing team? Luna: I think that starts with how you debrief projects. If every postmortem is about assigning blame, people will hide their mistakes. Lucas: Right. So you need to model the behavior. When a project goes wrong, the leader should go first and say 'Here's what I missed. Here's what I would do differently.' That gives everyone permission to be honest. Luna: And then you reward the analysis, not just the outcome. That's hard because most performance reviews are outcome-based. Lucas: It is. But some companies are starting to separate 'decision quality' from 'outcome luck.' You can make a great decision that leads to a bad outcome because of factors outside your control. And you can make a terrible decision that works out by luck. The goal is to evaluate the decision process, not just the result. Luna: So failure literacy is actually a team-wide skill, not just a hiring filter. Lucas: Exactly. And once you start building it on your team, you'll notice that people propose bolder ideas, they're quicker to pivot when something isn't working, and they spend less time covering their tracks. Luna: That sounds like a better place to work, frankly. Lucas: It is. And it's also a better place to hire from. Because the people who thrive in that environment are exactly the ones who will ace the postmortem question in their next interview.