In 2007, Hubbell Realty entered the Florida market.

Through my NAHB Builder 20 group, a national network of home builders, I partnered with a builder to purchase lots in Vero Beach. Then 2008 arrived, and a lot of negative factors converged all at once.

The recession collapsed the market, defective Chinese drywall compounded the damage, and our partner went out of business. Left holding devalued lots, we formed our own home-building operation in Florida to recover what we could, and we completed the development with zero profit. But it was done.

That venture stung, but it was far from the end of our story. Learning from business failures has shaped Hubbell as much as any success we have had.

Evaluate Risk Without Letting It Paralyze You

The three words that hold most people back from bold moves are fear of risk. I have never considered myself a natural risk-taker, yet I am comfortable with the risks we take because they are calculated rather than reckless.

Before Florida, we studied the market, sized the downside, and confirmed we could absorb a loss without threatening the company. That is what calculated risk means. You can be wrong and still be standing.

Inaction carries risk too. A few years ago, demographic data pointed clearly to a growing 55-and-older rental market. My team did not see the opportunity and passed, which allowed a competitor to step in, build the project, and fully lease it. Watching someone else capture an opportunity you spotted first is its own kind of failure, and it taught us that standing still can cost as much as moving.

Learn Faster Through Small Experiments

Long before Florida, we ran a cheaper set of experiments at Kaleidoscope at the Hub, a downtown retail center with space that had sat vacant for nearly a decade.

We opened a collegiate sportswear store that turned a small profit, then launched a franchised toy store, and for the first time, the property was fully occupied. When a major tenant left, we moved the toy store to a suburban strip mall, where we could not compete with Toys “R” Us.

In the end, we closed it. The tuition was modest, and the lesson was durable. The skywalk foot traffic that made downtown retail work did not transfer to the suburbs.

Harvard’s Amy Edmondson calls these intelligent failures, small and fast experiments at the edge of what you know, and her research finds they produce the most valuable information an organization can get.

The idea is keep the experiments small and the lessons stay affordable.

Turn Failure into Institutional Knowledge

A setback only pays for itself when you learn from it.

When mistakes happened at Hubbell, I addressed them directly, the way a coach calls a timeout after an interception. Name what went wrong, fix it, and get back on the field. I did not belabor errors, nor did I let them hang unaddressed, because the standard is simple. We do not make the same mistake twice.

That requires giving people room to fail in the first place. If I dictated every step, no one would develop the judgment to handle challenges on their own. As Joyce E. A. Russell writes, how leaders respond to setbacks reveals their character, and the best ones own their failures rather than deny them.

Resilience Becomes a Competitive Advantage

Going back to the year of our flawed Florida experiment, this challenge prompted us to make the biggest strategic pivot in our history: divesting our office, retail, and flex-office properties to focus on multifamily and industrial.

As a result, we purchased about 1,700 apartment units across Des Moines and Sioux Falls, a move that grew into a company called Indigo Living, which now manages more than 9,000 multifamily units across three states. Business resilience gets built through repetition, and overcoming setbacks taught us to redirect capital and attention faster than our competitors could.

My challenge to you is to debrief one past failure this month. Gather the people involved, walk through what happened without assigning blame, and extract three actionable lessons. Then write them down where the next project team will find them. The loss already happened; now it’s up to you to put that setback in your rearview mirror and set you and your team up for success.