This came up as I read a story about investors who lend start-up money to entrepreneurs. These investment groups don't fund projects unless they know everything about the project's manager. Aside from other experience, they want to know if the borrower has lost money - or failed - in previous ventures.
But they don't view this as a negative. Instead, it gives them insight into the borrower. In other words, this person can deal with setbacks. He or she won't disappear with their money. This is someone they can count on.
While this might not be the greatest analogy, it reminds me of how many of our staff members have had setbacks. Some relapsed more than once. Yet those who return and stick around go on to lead successful lives.
When their recovery gets rough they have the experience of past failures to draw upon. And they don't run away either.