Bloomberg columnist and economics blogger Megan McArdle makes the case that success — in business and in life — is largely contingent on how quickly and nimbly we learn from our mistakes. She speaks with Diane about how to identify mistakes early and channel setbacks into future success.

Guests

  • Megan McArdle columnist, Bloomberg View and economics blogger.

Read An Excerpt

Excerpted from “The Up Side of Down: Why Failing Well Is the Key to Success” by Megan McArdle. Copyright © 2014 by Megan McArdle. Excerpted by permission of Viking Adult. All rights reserved. No part of this excerpt may be reproduced or reprinted without permission in writing from the publisher.

Transcript

  • 11:06:54

    MS. DIANE REHMThanks for joining us. I'm Diane Rehm. Not everyone sees failure as something to fear. Blogger and journalist Megan McArdle makes the case in a new book that we should value failure and not just in business but in law enforcement, job hunting, even love. Her book is titled, "The Ups Side of Down." Megan McArdle joins me to explain why failing well may be the key to success.

  • 11:07:26

    MS. MEGAN MCARDLEYou can join us, share your own stories, 800-433-8850. Send us an email to drshow@wamu.org. Follow us on Facebook or send us a tweet. Welcome, Megan. It's good to have you here.

  • 11:07:45

    MS. MEGAN MCARDLEThanks for having me.

  • 11:07:46

    REHMGood to see you. I gather you live here in Washington.

  • 11:07:52

    MCARDLEI do, right up mile and a quarter due north of Capitol.

  • 11:07:55

    REHMWonderful. You know, I looked at this book and I thought, today, young kids -- parents are told to concentrate on building self-esteem in young kids and that means saying, at times, you know, if you fail, if you make a mistake, It doesn't matter. You're saying, it really does matter.

  • 11:08:29

    MCARDLEIt does matter, but not in the way that kids necessarily take it. You know, we all know this. We fall down and we feel terrible. And, you know, failure should feel bad because that's nature's way of saying don't do that. If it didn't feel bad, we wouldn't stop. But when a kid fails, you know, there's this instinct to say, oh, it didn't matter or to protect them from that. And, in fact, the most valuable lesson that kids are going to learn going out into the world is to fall down, have it hurt a little bit, figure out what they did wrong, and then pick themselves up and try again.

  • 11:09:00

    MCARDLEI mean, that is -- you watch how kids learn to walk, right? They fall, they get up, they fall, they get up. And over time, you know, the lesson that they should be learning is that this is, in fact, the process of learning. And in some sense, it's great because it means that you learned something that didn't work.

  • 11:09:18

    REHMBut that's physical failure, that's the process of, as you say, learning to walk. But what about, say, failing at tests as a young kid? That really hurts psychologically.

  • 11:09:37

    MCARDLEIt does. But what we're learning is that it's a lot like learning to walk in a lot of ways. A psychologist named Carol Dweck did a series of tests where she put groups of people through a series of challenging tests and saw who improved over time and who didn't. And what was interesting is that she looked at two groups of people, one who's improving and one who's not, one who's not even trying the harder tasks.

  • 11:10:00

    MCARDLEAnd she's trying to figure out what is wrong with these people. And what she realized is -- she said she had a eureka moment one day, sitting and talking to her grad student is that the group of people who were getting better, what she called people with a growth mindset. They thought of failure as that's -- oh, that means I'm learning. You know, failure is what happens when you're doing something you don't know how to do that well.

  • 11:10:22

    MCARDLEAnd, of course, if we want to do anything great, it's going to be something that we don't know how to do because often it's something no one's ever done. But then there is the other group of people. They're what you call the fixed mindset people. Instead of thinking as a test an opportunity to see where they needed improvement and to grow, they thought of it as like a dip stick that measured an existing level of talent.

  • 11:10:43

    MCARDLEAnd so, what do those people do? They shielded themselves. They started to get afraid of the test, because what if you find out that you don't have what it takes? And so they would shield themselves by not taking on that challenge. Or, you know, in some psychological studies, you even see people deliberately handicapping themselves. And I think a lot of us probably saw this in school where the kid who gets drunk the night before the SAT or doesn't do his work and then doesn't do well in school.

  • 11:11:07

    MCARDLEYou know, if you are -- and in one test they gave people a choice of a performance-enhancing or performance-inhibiting drug, people actually, when they didn't think they were going to do well on the test, chose that performance-inhibiting drug because then you have an excuse. It wasn't me, I didn't try and so forth.

  • 11:11:24

    REHMInteresting.

  • 11:11:26

    MCARDLEAnd so, as we get older, we shield ourselves from failure. And schools reinforce that. You think about the way that they teach writing or even science, right? What you see is all this unbroken stream of beautiful palms and what did the author mean. And, of course, the assumption is that the author meant exactly what, you know, there's a meaning that they had rather than he was maybe having a bad day.

  • 11:11:48

    REHMMegan McArdle. Her new book is titled "The Up Side of Down: Why Failing Well Is The Key to Success." What about your own personal story of failure and success?

  • 11:12:07

    MCARDLEThere's a couple of them in the book. But, you know, the biggest one that I tell is the fact that I was actually -- I was unemployed for two years after graduate school. I went to business school in the fall of 1999. My co-workers in the Economist named me Miss (word?) because I seem to have participated in every major trend. I was in startups and tech in the '90s and I went to business school.

  • 11:12:29

    MCARDLEAnd I got a job with a tech startup. And, you know, business school is a great place for people who want to punch all the buttons in exactly the right order and then you're supposed to get this guaranteed outcome. And so, I was supposed to be guaranteed a good job. And despite the fact that I'd actually watched the NASDAQ from the lobby of the Merrill Lynch training, I was a summer associate at Merrill Lynch before I realized I have no inner investment banker.

  • 11:12:52

    MCARDLEAnd I'd actually watched the NASDAQ crash from the lobby of the orientation facility, and somehow I decided to go to a technology management consulting firm. And they pushed back their offer, pushed back their offer and eventually they just said, you're never going to start. And I did almost everything wrong. I waited too long to start looking for another job because I had a temporary job working actually down at the World Trade Center's Disaster Recovery Site.

  • 11:13:19

    MCARDLEAnd then I looked and looked, and it was so discouraging. And right as I was just about at the end of my rope, just two years of unemployment, I remember I went out to a happy hour for business school classmates and I couldn't afford a drink. So I drank water and I circulated. And everyone was -- they're happy, they're getting married, they have jobs. And I was feeling worse and worse.

  • 11:13:39

    MCARDLEAnd finally a guy I didn't know very well came up to me and said, how are you? And I just looked at him and said, I'm perilously close to despair. And he sort of sidled away. I think he was afraid to turn his back on me. But two weeks after that, I'd interviewed for a job at the Economist. I was doing so many things. I applied at the Foreign Service and passed it and then flunk the physical. I had gone, you know, I had a job with the city of New York.

  • 11:14:03

    MCARDLEThen they had a hiring freeze, and on and on. And I'd interviewed for the Economist as a journalist. So I actually told my parents I'm thinking about becoming a freelance journalist and they're a little worried. But I applied for this job with the Economist and finally three months after, a couple of weeks after that happy hour, they called and offered me the job. I was so taken aback that I think I was like, I'll take it even before he'd said, you know, what it paid or, you know...

  • 11:14:29

    REHMSure, sure.

  • 11:14:30

    MCARDLEAnd then I called the guy I was dating. I told him about it and I burst into tears. And I'm not really a teary person. And I've only cried in happiness twice in my life and the other was on my wedding day. And what I realized in retrospect, though, you know, the Economist -- the job at the Economist is my dream job. I've always loved the Economist. I love...

  • 11:14:51

    REHMGreat magazine.

  • 11:14:52

    MCARDLEYes.

  • 11:14:52

    REHMGreat magazine.

  • 11:14:54

    MCARDLEAnd I love economics journalism and I love what I do. And I've really had this amazing 12-year stretch where I've gotten to spend my entire basically reading and talking to smart people about what they do and then I write it down.

  • 11:15:07

    REHMMegan McArdle and her new book now about not only her experience but the experience of many businesses and individuals. It's titled "The Up Side of Down: Why Failing Well Is The Key to Success." You argue that really trying to guard against failure is absolutely the wrong way to go.

  • 11:15:42

    MCARDLEAbsolutely, because it puts you in this -- there's -- I always say there's nowhere more dangerous than safe. When you think you have a guarantee and you think about this with the financial crisis. When I started out in economics journalism in 2003, I spent a lot of time learning about something that economists call the great moderation, which was that recessions were not nearly as sharp as they had been in the past.

  • 11:16:06

    MCARDLEThey were fairly -- I mean, they still felt bad, but they were fairly moderate compared to something like the '70s or the Great Depression. And inflation was controlled, the economy was just rolling along. And so, there is a theory that was very current, a lot of people wrote their PhD thesis on it, PhD dissertations on this that regulators had gotten so good at managing the economy that it was basically impossible to have another financial crisis.

  • 11:16:31

    MCARDLEAnd, of course, what that meant was that we were building up to a financial crisis. And you look at all the guarantees in the system from the mortgage guarantees that people thought meant, oh, well, then buying a house is a sure thing. That was the most dangerous thing they could do, think that they had stumbled on to a sure way to make money without risk because that's when you're not protecting yourself.

  • 11:16:51

    MCARDLEAnd people are getting over and over extended. You know, when I bought my house in 2010, my husband and I actually sat down and said, what would happen if we both lost our jobs and had to take jobs that paid half as much, that's how much house we can afford. Because the economy is risky. And, you know, it doesn't mean that we can't have a nice life, but your fixed expenses, you should be minimizing, not maximizing.

  • 11:17:11

    MCARDLEBut when people thought that it was guaranteed safe, we went in exactly the opposite direction.

  • 11:17:14

    REHMSo money is clearly one of the issues you're talking about in here. And managing money is something that not everybody does as well as perhaps you and your husband did.

  • 11:17:33

    MCARDLEWell, you know, we -- over time, we had built up this sense that the smartest thing that you could do was burrow as much money as possible, get into a house that was as big as possible because that was how you were going to basically save for retirement.

  • 11:17:44

    REHMRight. But wasn't that taking risks that the economy was urging us to take?

  • 11:17:54

    MCARDLEAbsolutely. And I think when you look at the history of the financial crisis, you see that everyone from bankers, to regulators, to homeowners, they're getting a bad signal from the market, right? Everyone had decades of data showing them that house prices never go down nationwide. And then it was another thing I used to hear when I was reporting was, well, yeah, this could go wrong if we had a sustained national decrease in housing prices.

  • 11:18:17

    MCARDLEThe only time that has ever happened is in the Great Depression, so of course no one was preparing for another Great Depression and that's what we got.

  • 11:18:25

    REHMMegan McArdle. And when we come back, we'll talk more, take your calls. I'd like to hear how you failed, succeeded, whatever has happened. Give us a call, 800-433-8850.

  • 11:20:01

    REHMAnd welcome back. If you've just joined us, Megan McArdle is with me. Her new book is titled, "Why Failing Well is the Key to Success." Megan writes about business and economics in her blog at Bloomberg View. Here's an email from Leslie, in St. Louis, MO. She says -- and maybe she is not alone, "In my family," she says, "every mistake was treated as a failure. And every failure felt like a nail in the coffin of one's future." She goes on to say, "I grew up with the sense of dread about making mistakes because nobody ever taught me that every mistake had a lesson in future success attached to it. Only years of therapy as an adult taught me this. Better late than never," she says.

  • 11:21:12

    MCARDLEI absolutely agree. You know, when I was interviewing Carol Dweck, who was talking about the fixed versus the growth mindset, I said, "I have to tell you, I'm a fixed mindset person. I really struggle with this." And she said, "Me, too." I was so surprised. And she said, "You know, I knew I was changing when I heard myself saying, 'Wow, I suck at this. This is really fun.'" But she said it took her a long time. And, you know, I've been asked if this book is a self-help book, and I feel like it is for me, anyway. Because I have changed in the process.

  • 11:21:42

    REHMGood for you.

  • 11:21:43

    MCARDLEIt really is. But it was a struggle for me. I really had to teach myself to say, "Well, when I'm doing something new I might not be that good at it, but I can…

  • 11:21:54

    REHMLearn.

  • 11:21:55

    MCARDLE"…learn from it and make it better."

  • 11:21:57

    REHMWhat about Americans? Do you think they differ from Europeans in this?

  • 11:22:03

    MCARDLEWe do. We differ. In some ways we're much better and in some ways we're much worse in how we handle failures. The way that we're better is that in business and economic risk taking we are much better at putting someone back to work and saying, "Oh, well, great, you learned something." You know I was talking to a guy who was a CFO for a startup in the late '90s. And he said when he finally left he was really afraid -- because it failed. He was really afraid that he was going to have to really hustle to look for a job.

  • 11:22:35

    MCARDLEAnd instead he found that people were, like, this is great. You've learned an immense amount, you did it on someone else's dime and I'm excited to have you on board. And this is really a very American thing that you don't see as much. And European and Asian executives are -- they talk about trying to change it because it is our strength, as then when people have failed economically we really put them back to work. And the key example of this, our bankruptcy system, which is -- people don't realize -- more generous and encourages a lot of entrepreneurship because it's more generous than anywhere else. On the other hand, our prison system's terrible.

  • 11:23:07

    REHMBut what about all the people who are out of work now because their businesses have just shut down or laid off thousands of people? They find themselves in their 50s or every 60s. What can you say to them?

  • 11:23:27

    MCARDLEWell, the first thing is that we know that it is harder for people in their 50s and 60s. At the same time, one of my favorite stories in the book is Colonel Sanders. Because he was a serial failure. I mean his wife actually left him at one point because she was so sick of the get-rich-quick schemes and the endless job losses. Finally gets together in his 40s, opens a roadside cafe, and then when he's 65 the State of Kentucky builds a highway that bypasses his cafe. And he's once again back on his heels.

  • 11:23:56

    MCARDLEAnd he picks up, takes a pressure cooker, goes door to door, restaurants and conventions saying, "You give me five cents a chicken and I will show you how to make the best fried chicken ever." A thousand people turned him down, but he only needed one and he found that restaurateur and the rest is history. So it's over when you are in the grave. Before that there's actually -- and we do see -- it's tough out there, but the single biggest predictor of whether you get another job or not is just how much job search activity you're doing.

  • 11:24:23

    MCARDLEOver and over and over again is going out there and it doesn't feel good. I won't say it does. But understanding that the -- focus on the process, not the result because if you make enough phone calls, if you pound enough doors, there are still opportunities out there.

  • 11:24:38

    REHMYou also talk about a company like Coca-Cola.

  • 11:24:42

    MCARDLEThey did one of my favorite, spectacular failures. Pepsi was hot on their heels and so they decided they needed a new soft drink. And so they did the largest market research survey in history. Over and over again they tested and they got fantastic results on this new soda. So they decided, okay, new Coke is going to replace old Coke. It was a disaster. People are screaming at them. It's like…

  • 11:25:08

    REHMI know. I remember.

  • 11:25:10

    MCARDLEIt was the butt of every comedy joke.

  • 11:25:12

    REHMYeah, yeah.

  • 11:25:13

    MCARDLEBut here's the great thing. So they did a bad thing. They failed at -- they didn't prepare well for failure because they bet the company on it, right. They took their iconic brand and then they completely replaced it rather than, say, launching alongside.

  • 11:25:24

    REHMBut didn't they do the necessary preparation?

  • 11:25:29

    MCARDLEYou know, here's the thing, is that a market research, you know, a market research study is never asking the question that we want, which is what's going to happen when I roll this out nationwide? It's only asking a question, like, do shoppers want to drink three ounces of this on a Sunday in a supermarket in Ohio? And so they did what they could, but ultimately there was no way to tell in advance for sure.

  • 11:25:53

    MCARDLEWhat they did though that was really smart was they listened to the feedback they were getting. And a lot of people just double-down, you know. The plan's not working. There must be something wrong with the universe. I've got to do more of my plan. Instead, they pulled it back. And in the end, they reminded people what they loved about Coke. And it moved them back to a very secure number one slot.

  • 11:26:13

    REHMOne has to wonder how much testing on the ordinary individuals they did before they rolled it out.

  • 11:26:22

    MCARDLEThey were doing a lot of testing. The problem was, you know, how do you do this testing? Here's a three-ounce sample of -- do like a three-ounce sample of Coke or a three-ounce sample of Pepsi when it's free? Well, Pepsi's sweeter and so in a three-ounce sample people generally pick Pepsi. But that doesn't mean that that's what they're going to do when they bring it into their house. And what Coke found after they had moved new Coke out, was that it turned out that people don't like loss.

  • 11:26:48

    MCARDLEAnd so maybe they liked new Coke when you gave it to them as a free sample, but when it came at the expense of old Coke they were livid. And they were inundated with people saying this is terrible. I hate you. How could you do this to me? But, you know, the funny thing is, in the end, because it was only on shelves for months -- they pulled back really quickly.

  • 11:27:09

    REHMRight.

  • 11:27:09

    MCARDLEBecause they moved so quickly, they ended up actually helping their brand in the long run.

  • 11:27:16

    REHMMegan, you talk about something you call the American bourgeois synthesis. What in the world is that?

  • 11:27:28

    MCARDLEWell, so I talk about this in the context of there's kind of two ways you can think about risk. It's like a farmer or a hunter/gatherer. And a hunter/gatherer -- if you're hunting, you know, you can be a really good hunter and you can be doing everything you should, but then sometimes there's no seal at your little ice hole or whatever. And so there's a lot of luck to it. Farming, you know, put it in the ground and if you do what you're supposed to, in general, barring pests or drought, you're going to get a result.

  • 11:27:54

    MCARDLEAnd so if you think about failure like a farmer, you tend to think of people who have failed as having not lived up. Right? They were shirking. If you think of it like a forager, well, you know, this is just part of risk taking and we all have to share because -- so sometimes one is true, sometimes the other is true. And you have to figure out which. And the American bourgeois synthesis is this idea that what we say is if you attempt to get something by what we recognize as legitimate means -- so why do bail out homeowners who built houses on a flood plain, which is, you know, risky?

  • 11:28:30

    MCARDLEBut we're very hard on prisoners because we recognize that the homeowners were basically trying to do what we all do. We all want a nice house somewhere with a good view. And so we feel like they were doing their part. They saved the down payment, they made their payments and so forth and then they had bad luck. On the other hand, if someone seems like they were gambling, if they were…

  • 11:28:51

    REHMAs in insurance companies are now saying they were gambling.

  • 11:28:56

    MCARDLEYeah, and in some sense it's true, they were. But they're like us, right? They're obeying our cultural norms. On the other hand, someone like Bernie Madoff, well, he was violating those norms. And he needs to be punished. And in general, it's a good synthesis, but it really falls apart with people who are trapped at the bottom. And so one of the last chapters of my book, I talk about the prison system and how do we reform the probation system to make it so that kids at the bottom have the same kind of shot that middleclass kids do at participating in that culture.

  • 11:29:35

    REHMYou know, I find myself wondering whether there's a generational difference in how we think about failure. I mean, we heard earlier from Leslie, in St. Louis, Mo. I don't know how old she is, but I think in the last couple of generations there has been this thinking that failure's okay, you're not going to be hurt permanently if you fall down. You're going to get up again. Whereas older generations were probably told you must not fail. You have to keep on going. And you must not fail at what you try to do. Do you think there is a generational difference in thinking?

  • 11:30:36

    MCARDLEI think there is a generational difference in how the millennials were raised around failure. I think it's complicated, though. You know, in some ways, they're not allowed to fail, they've got parents helicoptering over them. I mean, more and more, especially in affluent school districts. What do you hear about tutors who do the work for the kids, parents who do the work for the kids, right? That was unthinkable when I was in high school. No one, you know, my parents did not come and interfere with teachers who were made at me. They were on the side of the teachers.

  • 11:31:04

    REHMExactly.

  • 11:31:05

    MCARDLEAnd it's this sense that there's only one way to succeed, it's by getting a college education. You need to get into a selective college. And therefore, I can't afford to do anything that might derail my kid, such as letting them maybe not do their work, experience that that's miserable and has bad results, and then figure out for themselves how to develop what psychologists call the internal locust of control, where you believe, I do this and then this happens. And I make my future happen.

  • 11:31:36

    MCARDLEAnd so, you know, on the flip side you have poor kids who just -- it's not that they're not punished. They're frequently punished very severely, but it's very dependent on are Mom and Dad around.

  • 11:31:47

    REHMExactly.

  • 11:31:48

    MCARDLEAre they not having problems with either work or some of them are struggling with addiction and so forth. And so what happens is they get, as Mark Kleimen, who's a public policy professor says, nothing, nothing, nothing, nothing, nothing, bam, huge punishment. Right? And that's how the prison system works. We put people on probation. Nothing, nothing, nothing, nothing, nothing, bam, 10 years in prison.

  • 11:32:10

    MCARDLEAnd rather than that, you know, what we need to do on both sides is lower these huge hurdles that people have to jump over, because on the one hand, the parents who are coaching the kids -- the affluent parents -- they're not letting their kids learn to do things on their own. And you're hearing stories of parents showing up in graduate school admissions who want to come to the interview and talk with their kids. On the other hand, poor kids are like Nadia Comaneci. Right? They've got to hit everything and get a perfect 10 or they can't clear that hurdle at all.

  • 11:32:43

    REHMAnd you're listening to "The Diane Rehm Show." Going to open the phones now, 800-433-8850. First to Edward, in Little Rock, Ark. Hi there, you're on the air. Edward, are you there? I guess not. Let's try Shelly, in Brattleboro, Vt. Are you there?

  • 11:33:14

    SHELLYI am, Diane. Thanks for taking my call.

  • 11:33:16

    REHMSure.

  • 11:33:17

    SHELLYYour guest's comments are really resonating with me. I'm a teacher. And I just -- especially what you just talked about in the last segment. You know, I see some really bright kids who are just terrified of taking risks. And, you know, I feel like we're somehow creating a whole generation of perfectionist kids who are riddled with anxiety. And I wonder sometimes if it's because we praise our kids so much for being smart and we're continually telling them how smart they are, and maybe we should be praising them instead for working hard and making those failures that your guest is talking about an okay part of the learning process.

  • 11:34:03

    SHELLYAnd as a teacher I would much rather see a kid persevere through an assignment or an obstacle, as opposed to maybe getting it right the first time, and/or having some of those helicopter parents, as we jokingly call them…

  • 11:34:20

    REHMSure. Shelly, can you identify one risk that you see your students unwilling to take?

  • 11:34:34

    SHELLYI guess I would see it more in the academic realm, you know. I have seen kids who are very good at the curriculum and they're very bright, but then as soon as they hit a roadblock, if something doesn't come to them immediately they might really react to that in a very negative way, having a lot of self-doubt, and that can even turn into acting out behavior.

  • 11:35:05

    REHMYeah.

  • 11:35:05

    SHELLYYou know, when a kid hits an academic obstacle and they don't have the coping skills to figure out how to solve the problem, as opposed to…

  • 11:35:13

    REHMInteresting.

  • 11:35:14

    SHELLY…knowing it right away.

  • 11:35:15

    REHMMegan, do you want to comment?

  • 11:35:17

    MCARDLEYes. You are completely on point. And I talk about this as a major part of one chapter of the book because it's absolutely key. It's the whole language of how we deal with successful kids. Right? The gifted and talented programs. What does this tell you? That talent is something that you just have. And how do we praise kids when they do well? Oh, you did well on that test. You must be really smart. And what does that teach them? That success is about finding work easy.

  • 11:35:47

    MCARDLEAnd that's often true in grammar school, but most people, as they get into high school and college and certainly into the real world, they're going to hit things -- first of all, if you're a professional writer, for example, everyone was the best kid in their English class. This is no longer -- talent only gets you so far. And second of all, you're going to run into subjects that you're not as good at.

  • 11:36:11

    MCARDLEAnd you need to be told, and to have it reinforced, that success is about taking on things you don't know how to do and struggling with them and overcoming them, rather than that success is about being the smartest kid, you were just born that way. So we really need to change about how we talk to kids about success and failure.

  • 11:36:31

    REHMYou know I have the highest regard for teachers, but let's just take an art class, for example. As a youngster I knew full well I couldn't draw. And I would look at my dearest friend, Nancy Willis, sitting next to me, and she would turn out these beautiful pictures and mine just looked awful. Until I read Betty -- I've forgotten her last name -- Betty somebody's book called "Drawing on the Right Side of the Brain."

  • 11:37:18

    REHMYou turn things upside down and that shuts off your negative impulse. You should see some of my drawings. Really extraordinary. And short break here. We'll be right back.

  • 11:40:01

    REHMWelcome back. Megan McArdle is with me. Her new book is titled "The Upside of Down: Why Failing Well is the Key to Success." And the O in the letter (sic) down on the cover of her book has someone coming down with a parachute. I like that cover.

  • 11:40:27

    MCARDLEMe too.

  • 11:40:28

    REHMHere is an email from Nathan in Collierville, Texas who says, "This topic couldn't be more relevant to my practice as a therapist specializing in marriage counseling. When couples try new techniques, early failure cause significant discouragement. One person tries, the other person misses. However, this failure provides an excellent opportunity to review what went wrong and how to make that interaction better next time.

  • 11:41:10

    MCARDLEAbsolutely. I mean, you see this over and over again as the -- in the failures in these moments of crisis or when you suddenly discover something that you just hadn't seen before. And you hear this -- I interviewed entrepreneurs, I interviewed, you know, people who said this in their personal lives. So many people have said, when I lost my job, when I went to prison, you know, that suddenly it exposes what you'd always kind of known but hadn't really been able to see. Suddenly it's there and clear.

  • 11:41:39

    REHMAll right. To Ron in Dallas, Texas. Hi, you're on the air.

  • 11:41:44

    RONHello, Diane, and you're a success to me.

  • 11:41:48

    REHMAh, thank you.

  • 11:41:51

    RONYou know, we all go through failures and success in our life and that it really does upset me about -- I've worked in programs, scouting programs and in church programs and working with these kids. And many of these kids have more opportunities and better home lives than some of the other kids that are out there. And I think that what bothers me so much is that there's a constant coddling of children. And I hate to use the word coddling. It's a parent's own perspective that somehow my child has got it a little harder than what I did. And that their failure is directly related to the system that they were born into.

  • 11:42:36

    RONAnd it almost sickens me to hear parents say, well they've got it harder than I do. That's why I'm going to do more for them and help them out. And the college education is going to ensure that they're going to get a job. You know, and we're no longer teaching and saying to these kids, you know, failure is part of life.

  • 11:42:55

    REHMIndeed. Ron, I'm glad you called. Megan.

  • 11:42:59

    MCARDLEYes. You know, I think that, look, if you look at the numbers of slots in selective colleges since the '70s, they haven't really increased that much. But the demand for them has increased enormously. And so, you know, with all the economic insecurity, between that and this fairly narrow funnel, we're pushing more kids through a narrower funnel. And what does that mean? It means that parents are just terrified to let anything go wrong because you feel like they might slip out of the funnel and then it would all be over.

  • 11:43:25

    REHMBut here's another perspective from Victor in Memphis, Tenn. He says, "My problem with this is that many people take the extreme and believe failure is always okay. Failure is a learning process but the risks have to be considered."

  • 11:43:50

    MCARDLENo, that's absolutely right. And I talk about this in the book is that you don't want to bet the farm. What you should be doing is taking calculated risks. And so there's a guy who I interviewed, a CEO of a company, Dunn and Bradstreet Credibility Corporation which does small business brand management, you might say -- credit identity management. And he has a whole wall in his office where people are supposed to write their failures down. His success -- a portion of his performance review that is about failure and it's a positive section, you need to -- you should show -- if you aren't taking enough they'll say, hey you weren't taking enough risks, which means you weren't learning and you weren't growing the company.

  • 11:44:31

    MCARDLEBut that does not mean that they say, take risks, any old risk. It's risks, don't lose us a huge portion of our customer base and so forth but try a product launch and see if it works. And if it doesn't we'll pull it back. But that's how we find out.

  • 11:44:44

    REHMHere's an email from Mike who says, "You've also written a lot about the economics of health care and the Affordable Care Act. Clearly there have been failures in implementation. And like any complex system, there will be failures in the future. Do you think we're in a position to accept the failures and make it a stronger system?

  • 11:45:16

    MCARDLEWell, I think to start off with, the way that it was structured was it was structured to fail badly. It had a lot of components that were absolutely vital that if they didn't work -- like the exchanges, that if they didn't work the entire law would basically not work. And that was a problem with the design. And it shouldn't have been quite so ambitious and so many moving parts.

  • 11:45:36

    MCARDLEAt this point I think what it is is how well is -- and we don't know this yet, we won't know for a while, how well internally is the administration handling failure? Are they listening to people -- as they didn't in the run-up, are they listening to people who say this isn't working? Are they looking -- you know, are they quickly rolling things out, pulling back what doesn't work? And are they able to take negative feedback in real time, identify what needs to be worked on immediately and do the things that they need to? We won't really know that until the middle of the year.

  • 11:46:06

    REHMAnd yet this last statement from the president of a delay in one of the mandates, it sounded as though they were correcting something. And yet they're criticized on the other hand for doing exactly that.

  • 11:46:27

    MCARDLEIt seems like, you know, part of it is that they've redefined success pretty aggressively. And so, you know, it used to be it was signing up 7 million people and now it's signing up however many people they sign up. But so it's hard to know, I think, from the outside either way. They're certainly doing better on it than they were in early October when they seemed to be in denial for a long period of time. But this is the sort of thing where the proof is in the pudding.

  • 11:46:52

    MCARDLEYou know, when we come out, when we see are we getting payments out, are people getting their insurance correctly? That stuff -- right now it's all anecdotal. We get reports of people who love it, reports of people who can't get their insurance activated. So I think that sometime around fall we'll get a better sense of how this went and how well the administration was able to react to what was going on.

  • 11:47:14

    REHMAll right. Let's go to Stephanie in Silver Spring, Md. Hi there.

  • 11:47:21

    STEPHANIEHello. Thank you.

  • 11:47:23

    REHMYou're welcome.

  • 11:47:26

    STEPHANIEAll right. So on the note of definitions for success, let me just say that I am a graduate student in neuroscience, probably not lacking for brains, but it's been a process for me to arrive at that. And even for me to arrive at grad school, I have to say that I really struggled. There's a lot of what you were mentioning a minute ago about students struggling to have agency over their own achievements. And you mentioned the internal locus of control. And that's something that I've only come into recently I would say.

  • 11:48:00

    STEPHANIESo I'm wondering what you would say to adults who haven't necessarily mastered that as children and now would like to be more effective in their work.

  • 11:48:11

    REHMGood question, Stephanie. Go ahead, Megan.

  • 11:48:14

    MCARDLEAll of these things can change. I mean, the brain is much more plastic as a grad to neuroscience. You know that. We tend to think of our personality traits as if, well, that's just the way I am. And as I've been talking a lot about fixed and growth minds, that's a lot of people have said, well I guess I was born as a fixed person. And you can change these things. But the point is that what you -- the most important thing really is just to think about it very deliberately, is to keep telling yourself even when you get discouraged, yes this is normal. This is how a lot of people think but I can change it by remembering that this is not true.

  • 11:48:50

    REHMAnd on that very point, let's go to Jordan in Oxford, Ohio. You're on the air. Jordan, are you there? I'm afraid he has left us. How about Gary in Easton, Md. You're on the air.

  • 11:49:12

    GARYHello and thank you for taking my call.

  • 11:49:14

    REHMSure.

  • 11:49:16

    GARYMy comment is about failure in maybe a little more narrow sense in terms of, you know, making financial decisions. And I've worked in the financial services industry over the -- you know, many years as a real estate agent, as a mortgage broker and an insurance agent. And I've seen so -- seen and met so many people who have made poor financial decisions because they just didn't have the basic knowledge about it.

  • 11:49:46

    GARYAnd I've come to the conclusion that what we need in this country is a curriculum, you know, starting in high school, to teach about personal finance, opening up bank accounts, you know, writing checks, getting mortgages, credit cards and dealing, you know, with the financial issues we have to deal with. Because I've come to the conclusion that the mortgage industry, you know, Wall Street, the banking industry has a lot of predatory practices that simply, you know, survive on people's lack of knowledge about these issues.

  • 11:50:23

    REHMI think that's a really good point, Megan.

  • 11:50:27

    MCARDLEYes. And what you see is -- you know, I write a fair amount about personal finance and so people write in to me. And one of the things that you see when people have gotten themselves into real trouble, credit cards or debt as it were, is they just stop opening their bills. And -- because they feel so ashamed and so terrible about it. And if they could reframe that to themselves and say, okay, well I didn't know, I've made mistakes, it probably wouldn't feel so terrible to open the bills.

  • 11:50:55

    MCARDLEBut we do -- you know, there is a very great lack of financial knowledge in this country. And what happens is that when people fall into these traps, they shame themselves. And then that makes it even harder for them to deal with it. So I agree that we should be teaching this, but we should also be teaching people how to handle it after it's happened and to say, okay well these are mistakes that lots of people make and they can be solved.

  • 11:51:17

    REHMAll right. To Joe in Fort Wayne, Ind. Hi there.

  • 11:51:23

    JOEHi, how you doing?

  • 11:51:24

    REHMGood thanks.

  • 11:51:24

    JOEI really love "The Diane Rehm Show." It's the reason that I listen to public radio. It's the only thing I got. I don't have cable TV.

  • 11:51:31

    REHMThank you, Joe.

  • 11:51:31

    JOEBut anyway I got a suggestion and a failure story all at once. My mother raised me by myself. I'm 72 years old. I have my house paid for. I've never had a problem but my failure was the fact that I worked in a factory for nine-and-a-half years. And the woman told -- and a woman that was my age she said, no one makes you come here. Two weeks later I quit and I went on a whirlwind ride that made me a complete success.

  • 11:52:00

    REHMReally? How'd you do that?

  • 11:52:04

    JOEWell, I tell you what happened. I made a partial success. I had 20 apartment houses paid for when this happened. And how I did it was I went in the trucking business as a sales person and wound up director of sales, made big money. And I love -- America's been great to me absolutely. And now -- now I wound up now living on social security at $950 a month and I'm just as happy as I was when I made it. And I've lived in my house -- was married for 50 years and it's just great.

  • 11:52:36

    REHMWell, Joe, I congratulate you on all your success. It really sounds as though his attitude is whatever life brings me I can deal with and I can turn it into a success. And you're listening to "The Diane Rehm Show." I'm going to tell you briefly my own story. I started here as a volunteer when I had two children, 14 and 11. And I worked as a volunteer for 10 months and then got a part time job here. And worked here for two years as a part time producer. I developed a program on my own, health related. And after a while thought, hey, there's no medical programming like this on television. I'll take it to TV.

  • 11:53:51

    REHMSo I took it to what is the CBS affiliate here, did three segments for them. And then the news director said to me, you're good but you're not good enough. You'll have to go to Buffalo or somewhere to get more training and then come back and I'll hire you. Well, of course with two children, a husband in a law firm I wasn't going anywhere. I had to pound the pavement for a solid year with all kinds of near misses. And then on the same day a year later the Associated Press called me and Physician's Radio Network called me and I got those two jobs on the same day. Worked there for two years and then this job opened up.

  • 11:54:51

    REHMI've been doing this since '79 so you never ever know but you have to keep putting one foot in front of the other.

  • 11:55:01

    MCARDLEAbsolutely. Even when you feel so tired and discouraged that you think that...

  • 11:55:05

    REHMOh, and it looks bad. That's all there is to it. So what is your advice now to the unemployed, to those who've lost their jobs because of the economy, because of downsizing, because of no fault of their own? What do you say to them?

  • 11:55:27

    MCARDLEFirst, you're not a failure. You're someone something bad has happened to. Second, looking for a job isn't fun. I'm not going to sugarcoat that.

  • 11:55:35

    REHMRight.

  • 11:55:35

    MCARDLEIt's a lot of rejection and no one like rejection. But you know what? There are people who've learned to do that and that's people in sales. Those guys go out and ask someone for something every single day. And you know what? They don't like it. You talk to sales people who have been in the business for 20 years...

  • 11:55:48

    REHMThey hate it.

  • 11:55:49

    MCARDLE...they hate making calls.

  • 11:55:51

    REHMRight.

  • 11:55:51

    MCARDLEBut they love connecting with the customers and they love -- you know, they get a book of business eventually and then it's not so stressful. But when you start out, everyone did the same thing, smile and dial. And that's how you have to think about this. You are a salesman with one product, that's you. You're going to hear a lot of no. You only need one yes, so the trick is to make -- focus on the process and not on the outcome. You say to yourself, okay, I've got to make so many phone calls this week. I've got to do -- I've got to do three informational interviews. I've got to keep knocking on doors and making contacts.

  • 11:56:26

    MCARDLEAnd don't sit home when you're not there. Volunteer, go work at Wal-Mart, keep yourself out. Because every time you leave the house, that's an opportunity for something to happen.

  • 11:56:34

    REHMAnd volunteering can become a form of apprenticeship for learning. A great way to learn.

  • 11:56:44

    MCARDLEAbsolutely.

  • 11:56:45

    REHMVolunteer if you can't get that job. You won't right away, volunteer someplace. Megan McArdle. Her book is titled "The Upside of Down: Why Failing Well is the Key to Success." And good for you, good for your mom whom I know is listening now. Thanks for being here.

  • 11:57:11

    MCARDLEThanks for having me.

  • 11:57:12

    REHMAnd thanks all for listening. Good luck to you in your own search. I'm Diane Rehm.

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