Tell me about a time you failed and what you learned from it.
This is not a fluff question meant to trip you up by surreptitiously getting at some weakness of yours. Instead it's used to find out if you really do learn from your mistakes and, if so, how you learn from them, as well as how you might be able to grow as an employee and thus help the company to which you're applying. The question might also gauge how self aware you are, how honest and trustworthy you are, and how adventurous, bold, and risky you are.
In order to prepare for this question, it's a good idea to give your answer some serious thought. You need to reflect on those times when you failed, whether they are at work, in a sport, in an academic setting, or in a relationship. And you should ask yourself several questions and then answer them truthfully: What did this failure feel like? What happened as a result of this failure? Where did it lead me? How did it change my thinking and my actions? What did it teach me about myself? What did I do differently afterward? What did I have to do to change? How did I go about changing? And what do I now do differently and/or hope to do differently?
When you answer the "failure" question make sure to 1) answer it (some interviewees will do the worst possible thing and not answer it, saying they have not failed); 2) answer it honestly (be sincere and make it a true failure, not something like "I received an A-, my only A- in my college career, in Econ 407 and thus I learned … "); and 3) concentrate your answer on the second part of the question (focus not on the failure itself but on the things you've learned, how you've grown and how, now, you do something differently as a result of your failure).
The truth is, which experienced employers and employees know well, you will fail at some point on the job, and so interviewers want to know how you will deal with that failure and if you will truly learn and grow from it, or if you will shut down and shrivel up. Ideally, if you're asked this question, you will want to get across that you are resilient, that you will not let failure stop you, and that you use failure as a way to progress, grow, develop, change, and learn.
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