Jon Corzine’s failure at MF Global brings to mind the classic article written by Abraham Zaleznik entitled, “The Management of Disappointment,” (Harvard Business Review, Nov-Dec, 1967). Zaleznik argues that people who strive for power will most often face significant disappointment and defeat. Think for example of Steve Jobs' firing form Apple, at the age of 30, after his conflict with the president John Scully. His company NEXT, which he founded after his "exile," failed as well.
The question becomes, not how to avoid defeat, but how to work through the experience of defeat. How can a leader gain insight and courage by deriving meaning from the failure itself? For example, Zaleznik describes briefly how Winston Churchill recovered from his personal defeat when the Britain’s military operation at Gallipoli in World War I failed, a campaign he had strenuously argued for. He was forced to resign his position as First Lord of the Admiralty, and it appeared that his political career was over. Yet he became one of the greatest war leaders in modern times, inspiring the people of his island nation to resist Hitler, after the British army was nearly defeated at Dunkirk. Zaleznik suggests that he recovered his conviction and passion by writing history and by relying on his trusting and loving relationship with his wife.
Jon Corzine, suffered two significant defeats, his ouster as head of Goldman Sachs, and his subsequent defeat in the gubernatorial election (for his second term), in New Jersey. One question is, what meaning he made of these defeats? From a psychodynamic perspective we could say that a person works through the experience of defeat by overcoming the fantasy of omnipotence that leads so often to over-reaching in the first place. The defeat becomes a lesson in how to bear up under, yet use, one’s limitations. One result is that the leader becomes more connected psychologically to reality and less invested in fantasy. This new and strengthened relationship to reality becomes the basis for the leader’s “second coming.” He or she is then “twice born.”
While I can only speculate here, newspaper reports suggest that Corzine approached his leadership role at MF Global as a reprise of his glory days at Goldman Sachs. He was going to transform a somewhat sleepy broker/dealer into a new Goldman Sachs. Was he in this sense repeating his past rather than trying to learn from it?
Let me draw attention to one detail that I think is significant. Corzine was injured severely in an automobile accident. His driver was speeding down the New Jersey Turnpike at 90 miles an hour while he sat in the front passenger seat without wearing a seat belt. His limousine collided with another car and Corzine experienced significant injuries to his chest, lungs and legs, and cuts to his face requiring plastic surgery. There is reason to believe that his subsequent electoral defeat was shaped in part by his debilitated physician condition. He experienced diminished physical stamina and reduced powers of concentration for a considerable period of time.
Let me speculate that the accident typified the same denial of risk and danger – no seat belt at 90 miles per hour—that characterized his leadership at MF Global. After all several months prior to its collapse, regulators were concerned by the level of risk MF Global was taking by using borrowed funds to buy European sovereign debt. If these two examples of risk taking are connected, it suggests that Corzine was repeating history rather than learning from it. One possibility is that he failed to consider how his own choices, not wearing a seat belt and prompting his driver to speed at 90 miles per hour, played a role in his subsequent injury. He saw it as an accident rather than as an example of his over-reaching.
If this speculation has merit, it suggests that Corzine is the kind of person who does not entertain readily, what psychologists call the “work of mourning,” the process though which people become reconciled to their disappointments. In the work of mourning one grieves for the loss of one’s imagined omnipotence. Perhaps Corzine could never reconcile himself to the role he had played in his own defeats.