What's the dumbest mistake you ever made?

(MoneyWatch) Back in the heady days of the Internet boom, I left a great job and a boatload of stock options to become chief executive of a high-tech startup. Then the tech bubble burst and we had to file for bankruptcy. We all lost our jobs. As for my prior company, the stock I walked away from would someday be worth a fortune.

When stuff like that happens, we tend to react one of two ways. We either joke about how it seemed like a good idea at the time, or tell ourselves how much we learned from the experience and how invaluable those lessons were. Then we take a big gulp of something strong when nobody's looking.

Don't get me wrong -- we all make mistakes. And while those mistakes may cost us dearly, it's another thing entirely when they impact others, as well. We're talking the kind of mistakes that executives and business leaders are in a position to make, the ones that involve bankruptcy, layoffs or significant loss of shareholder value.

Like me, I'm sure a lot of executives would jump at the chance for at least one do-over in their careers. Like former Nokia (NOK) chief executive Olli-Pekka Kallasvuo and the co-CEOs of BlackBerry maker Research In Motion (RIM), who were caught completely flatfooted by Apple's (AAPL) iPhone and Google's (GOOG) Android smartphone platform.

And how about Yahoo (YHOO) founder Jerry Yang who, along with former chairman Roy Bostock, rejected a 2008 acquisition offer by Microsoft (MSFT), a deal that would have netted shareholders about $20 billion above what Yahoo's stock was worth at the time.

Or take what Digital Equipment founder and president Ken Olsen once famously said: "There is no reason for any individual to have a computer in his home." Olsen's astounding lack of vision ended with an industry giant that once employed 140,000 people being sold off in pieces, with its core computer and services business going to Compaq in 1998.

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Unfortunately, those are the kind of mistakes that are particularly susceptible to denial. I know it was years after that spectacularly dumb career move before the words, "How could I have been so stupid?" ever came out of my mouth. And believe me, those words are really, really important.

You see, no matter what you tell yourself, until you say those words, you really won't learn from the experience. Only when you admit the truth can you really grow and move on.

So what is the truth?

For a lot of people, including those who work their entire lives to become successful executives, entrepreneurs or business leaders, the truth is that they're not as smart as they think they are. It's that they're not as comfortable taking big risks as they thought they were. And, most important, it's that they weren't the slightest bit prepared for what it felt like to have their egos completely crushed by the experience of losing, and losing big. That's the truth.

And that's precisely why people who place so much value on their careers -- on achieving, on succeeding, on winning -- often resist the truth. Because it can be painful to admit the truth. It's an awful lot easier to just plod along and make believe there are good reasons for doing what you did.

That's why you should never underestimate the power of the human mind to rationalize events that fly in the face of a lofty self-image or compartmentalize feelings that would threaten to burst an overinflated ego. And while none of us want to admit this, least of all me, that's what makes us weak and cowardly.

It's truly ironic that the only way to be brave and strong is to humble yourself and admit your mistakes. Not the little ones, the big ones. And no, it's not enough to face those you let down and tell them you failed. You wouldn't believe how easy it is to do that and still go on living in denial.

The only thing that really matters is what you honestly tell yourself. And you know what? When you look in the mirror and ask, "How could I have been so stupid?" and genuinely answer, "Because I'm only human," when you can truly forgive yourself, that's when you've accomplished something special. 

Image courtesy of Flickr user Alex E. Proimos