Good CEO, Bad Call—How to Recover


Martha Stewart took her company public in 1999 and became America’s first self-made female billionaire. Then, in December 2021, she acted on an illegal stock tip and was sentenced to five months in prison.

You probably won’t become a billionaire and I don’t see any of my readers going to jail, but there is one fact about your future that I can guarantee. If you are destined for success, you will make mistakes. They come with the territory. Bold moves can mean colossal failure. Or at least errors that are painfully visible. You might not be the perpetrator, but because you’re the leader, the blame will rest on your shoulders.

Martha’s poor choice could have irreparably damaged her brand. But she took her punishment on the chin. In prison, Martha continued doing what she does best–cooking, cleaning, and showing others how to make fun things. She recovered handily. And so can you. As long as you plan for missteps before they happen and are psychologically strong enough to stick to the process that you’ve outlined, you will survive.

The recommendations for successfully managing these challenges—whether they result from poor judgment, bad luck, or any disheartening combination of unfavorable circumstances—are straightforward. It’s “All I Need to Know I Learned in Kindergarten” kind of advice.

The tricky part, and we know it’s tricky because so many people get it wrong, is that getting it right requires character. Bad situations call for qualities that are difficult to muster when your pulse is soaring over 120. That’s why preparation, and even practice, is important.

Documenting the steps that you will take in a leadership challenge is a good way to begin training yourself to act with intention in a situation filled with extreme emotional distractions.

Pay Attention

Don’t ignore subtle signals and signs. If you sense a problem brewing, you may already be knee-deep in a hot mess. Follow your instincts even if you have to drag yourself into the fray kicking and screaming.

While naming the problem may be extremely unpleasant, clarity is the beginning of a solution. Talk to your team. Ask about issues and challenges. Attend meetings where you aren’t expected. Uncovering an issue that’s silently creeping through your organization demonstrates your control over the situation.


.orgCommunity Circles offer expertise from trusted advisors and colleagues.

If your worst nightmares prove to be true. First and foremost, don’t panic. Remember, you have a plan. Review the instructions you wrote to yourself. Don’t follow your gut to your next big mistake. Take enough time to accurately assess the situation. Perhaps you haven’t understood all the issues. Maybe instead of falling off a cliff, you’ve just stumbled over a rock.

Consult Your Experts

Seek perspective and the counsel of trusted advisors. If you don’t already have those mentors in place, it’s past time to begin developing an executive support system. When I was interviewing leaders for our Association 4.0 books, the importance of connections was a recurring theme.

Fortunately, finding colleagues with whom you can share ideas and advice is easy. Our own .orgCommunity offers “Circles” for women in leadership, CEOs, and C-suite executives. And we are quick to add new opportunities when the need arises.

These intimate gatherings provide a safe place for colleagues to discuss sensitive topics and to seek feedback without judgment.  Harriet Bogdanowicz, Chief Strategy Officer at the American Planning Association, described the experience like this. “The Circles are forward-looking groups of business people who are very much about learning from each other and thinking outside the box in a trusting environment.”

Staying ahead of business and industry trends is another way to access a continuous stream of expertise. Many of the contributors to our books are compulsive readers. Kim Robinson, President of FrontlineCo, described her passion for getting the best advice this way.

“I read so many business books and publications. Daniel Pink and Guy Kawasaki are two of my favorite authors. Both have motivated people across multiple industries. .orgCommunity and ASAE are organizations that have also exposed me to original thinkers. .orgCommunity’s entrepreneurial orientation is unique in the association space. It’s an organization that looks outside our sector and puts members on a bigger playing field. That’s what I try to do in my own life.”

Look in the Mirror

If you are the leader, you should put out the fire.

Don’t make blame a hot potato that gets tossed quickly down the line. If you are the leader, you are the person who should put out the fire. We all know that–right?

Not exactly. The news is filled with examples of CEOs who either denied wrongdoing or pointed the finger at someone else. Here are a few famous examples:

  • Ken Lay, Enron—To hide massive losses due to inattention and neglect, he fraudulently inflated the company’s value. He was indicted. He died before going to trial.
  • Elizabeth Holmes, Theranos—Heralded as a wunderkind entrepreneur, Holmes claimed to have revolutionized blood testing. In fact, she was never able to produce the biotechnology she promoted. She lied to investors and the public about the results. Holms was sentenced to 11 years in prison.
  • Richard Smith, Equifax—Smith contributed to a data breach that revealed sensitive information of about 143 million people. Then, he sat on the bad news for as long as he could. He was fired.


These were hardly honest mistakes. But a culture characterized by competition and the drive to succeed makes it difficult for people to admit weakness, even when we are trained to know it’s the right thing to do.

You must have confidence that your colleagues will respect your honesty and continue to value your opinions. Unfortunately, that trust doesn’t just happen. It is the currency that leaders build over time. From your first hour in the big chair, you should begin saving up for the day when you might need to cash in some of that goodwill.

Deliver the Solution

Take time to assess the problem, but don’t wait too long to acknowledge your mistake. Ideally, an apology is accompanied by a solution. But a quick fix isn’t possible for complex issues. If you can’t deliver answers, begin by explaining exactly what happened and how a similar event will be avoided in the future. Provide all the necessary details—who, what, where, when, and how. But be concise. You don’t need to over-share or offer superfluous information.

Be prepared to discuss the steps involved in problem-solving. Who will support the process? Are staffing changes needed? What is the timeline? How much is the budget? How will members be impacted?

Whether you can make a thorough presentation or simply offer a preliminary plan, be your most professional self, even if you are shaking in your shoes. Give the polished performance that got you the job in the first place. Remember, people may be wondering if that decision was a mistake.

Be Courageous

Perhaps this should have been my first recommendation. Confronting the truth requires integrity, and integrity often demands courage on multiple levels. This sounds simple but try it when 20 bigshot volunteers are breathing down your neck because you made them look human.

Put on your big person pants. Don’t let one mistake, even if it’s memorable, paralyze you. Be brave enough to face your weaknesses, overcome feelings of inadequacy, and move forward. Joey Knecht, CEO and Managing Director,, offered this wisdom.

Courage unlocks the ability to adapt to the future. There is no learning without failure. “As a child, I was taught that I wasn’t always going to win. When you fall, you get up, try again and do it better the next time. The United States is a country where, with hard work and a good idea, you can be whatever you want. . .Throw your heart into cultivating your best ideas and ruthlessly weed out the tired strategies, sacred cows, and unquestioned habits that are holding you back.”

Take Joey’s advice. Don’t be afraid to fail. Just be prepared to use those missteps wisely.

Read profiles of Kim and Joey in “Association 4.0: An Entrepreneurial Approach to Risk, Courage, and Transformation.







Position Your Organization For Success

Join .orgCommunity today for free.

Subscribe to Our Newsletter