I’ve known some geniuses who were such a pain to work with that we had to let them go; then again, some of our most brilliant, delightful, and effective people were let go by previous employers for being none of those things. It would be nice if there were some magic bullet that turned difficult people into success stories, but there isn’t. There are just too many unknowns and immeasurable personal characteristics involved for us to pretend that we have figured out how to do that. Everyone says they want to hire excellent people, but in truth we don’t really know, at first, who will rise up to make a difference. I believe in putting in place a framework for finding potential, then nurturing talent and excellence, believing that many will rise, while knowing that not all will.

The implications of this kind of leap to a company’s economic model can be devastating. In IBM’s case it meant the collapse of gross profit margins and the attendant changes we had to engineer to lower our cost structure without compromising our effectiveness.

Yet the hardest part of these decisions was neither the technological nor economic transformations required. It was changing the culture—the mindset and instincts of hundreds of thousands of people who had grown up in an undeniably successful company, but one that had for decades been immune to normal competitive and economic forces.

All the mythologizing is so unfortunate. It has popularized badly misguided notions about how a CEO can succeed in a job that’s not only crucial to the economic foundations of our society but also so cognitively, emotionally, and physically challenging that nearly a third of those appointed last fewer than three years in the role. The mythmaking has obscured so many important lessons we can learn from observing how CEOs struggle mightily with the changing challenges of the role. And overcome them, not only in the early going but also throughout their tenures.

The story speaks to how even the most talented and experienced leaders, who’ve successfullly navigated through many challenges, may overlook or misinterpret arising threats or fail to perceive them at all. That may be true even when they’ve instituted good monitoring systems, with the best data gathering and analytics, and have crackerjack strategy and operations teams supporting them. Ironically, the more success they’ve driven, the more they may be given to misreadings and slackening of vigilance.

In the abstract, economic theory held: swift redundancies would lead to quicker recovery and hence new, better jobs. But he stopped believing in it. Or rather, he gradually became convinced that the axe wasn’t falling in the places that theory called for. The bosses weren’t losing their jobs or homes. They weren’t leading from the front and sacrificing themselves for the greater good. How many ordinary jobs could you save with the CEO’s salary? It was simple arithmetic. McKinsey, too, was making a healthy surplus that could have kept most of these people employed, at least for another year. There had to be a better way to fit this puzzle together.