“There’s an old saying that victory has 100 fathers and defeat is an orphan.”
[1961 J. F. Kennedy News Conference 21 Apr. in Public Papers of Presidents of U.S. (1962) 312]

Failure is not a word that we use very often.  Granted, it is becoming more accepted and in some instances actually lauded in recent times.  Sometimes it is even acknowledged openly and perhaps, in very rare instances, we actually learn from those failures.  Ted Williams (of baseball fame) I believe said it best:

“Baseball is the only field of endeavor where a man can succeed three times out of ten and be considered a good performer.”

As much as I love baseball (and JFK for that matter), this post is not about picking yourself off the mat, learning from your mistakes or even overcoming failure.  This post is about identifying the different types of people typically in the room when it happens.

About 80% of all business fail in the first 18 months according to Forbes.  Let that sink in a bit.  Even modest hitters in baseball have a better average than starting a new business and making it last more than 18 months.  So, if the most likely outcome of a business is that it will fail, we would like to think that most founders and business people are stand-up people that see the orderly transition of the business from “open for business” to “closed”?  Unfortunately, that is not typically the case in my experience.  The following characters tend to show up when things go bad:

1. The Blamer.  This one is pretty obvious.  The failure has to be someone’s fault because the failure must be laid at someone’s feet, the Scapegoat (discussed later).  The main reason the Blamer must name the Scapegoat is so that the Blamer does not share the same fate.  I have typically found that the Blamer is the person that wants to deflect attention (mostly from himself) and draw attention to the Scapegoat.
2. The Scapegoat.  Remove the idea that the Scapegoat is a meek person getting stepped on or over.  The Scapegoat is many times simply a very good person that happens to be the only person in the room willing to admit to mistakes.  Unfortunately, just like in the Army, if everyone steps back at the same time a person steps forward…that leaves only one person “out there”.
3. The Invisible Man.  The person tries to distance himself from the failure by not being around the failure.  We have all seen the boat start to sink in ventures and partnerships.  The “flight or fight” principal applies to sinking business ships.  Some seek flight and disappear, seeking to put time and distance between themselves.  I have always found it rather ironic how quickly “founder of XYZ company” is removed from the Twitter handle when things start to go bad.
4. The Rudy.  Rudy is the never give up guy, “we can make it work” or “it is not that bad” person.  In many ways, Rudy is more dangerous than anyone in the room.  Rudy simply refuses to see the end or is not smart enough to understand the end is upon the venture.  Rudy can cost you (and your partners) a ton of money, so be careful.
5. The Leader.  The Leader is the mythical being that owns the moment, instills courage in the team to admit the defeat and either leads the team to “pivot” (wow are we using that term too much nowadays) or properly wind-down the company.

Obviously, we all want to be the Leader, but seldom do we have the conviction to be that person.  Many times failure means legal consequences, lost relationships, lost trust and most probably financial consequences.  It is hard to bite that bullet and go to your investors to inform them you have no means to pay them back or that repayment is going to be much harder.  What many people fail to understand is most investors have been in the same boat and appreciate the honest, direct approach to failure.  A man (or woman) who has enough integrity to properly wind-down a company typically earns the respect of his lenders, investors and partners.

Be the Leader.