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It is not that past failures are bad. Most successful business people feel strongly that experience with failure is essential to the development of well-adjusted, adaptable leaders. A person with more than 10 years of working experience who claims to have never seriously blundered might not be a risk-taker or mature in his or her career. More significant, the candidate might be emotionally insecure about dealing with failure.

Allowing People to Open Up

The challenge is that people naturally don’t want to talk about their failures since they are worried about it being used against them. Many people will only describe examples of minor slip-ups they made. Others will turn the question around to make it seem like it was actually a positive: “I worked so hard that I burned myself out.” Still others will put the blame on someone else: “I trusted my people too much and they let me down.”

It is essential for the interviewer to create an environment of trust for the candidate so they will feel comfortable to speak freely. Using some of the justifications in this article is usually sufficient. As well, conducting interviews in social settings like business club or upscale restaurants (including lobbies in attractive hotels) often works better than typical business offices.

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Source: http://www.chalre.com/hiring_managers/career_advancement.htm