September 18, 2008

The 2008 Financial crisis: what can we learn about leadership?


It's now clear our economy is suffering a major blow. Financial institutions are crumbling. The government is stepping in to head off even more calamities while creating significant discourse on who is to blame and what is an appropriate response.

These are the times in which leaders are most challenged. They are challenged to demonstrate what they are really made of.

It is also a time in which we should reflect upon what type of leaders we want and need to lead us further into the 21st century.

The complex nature of the world today demands a different kind of leadership. We are much more interdependent than ever before. We are global. Information is coming at us from all directions and what we learn in school is quickly outdated. Companies that once seemed like stable and sustaining firms disappear overnight.

Yesterday I heard Bill George, former Chair and CEO of Medtronic and now professor of management at the Harvard Business School, speak about his book True North which focuses on what he calls Authentic Leadership. According to George, authentic leaders demonstrate 5 dimensions:
  • Pursuing purpose with passion
  • Practicing solid values
  • Leading with heart
  • Establishing enduring relationships
  • Demonstrating self-discipline
What does this have to do with the current financial crisis?

One could argue that the current crisis is about policy, regulations and unfortunate economic conditions. However, consider greed, lack of transparency, sub prime mortgage loans, and all the various decisions made around derivatives, hedge funds and other high risk financial practices.

Given the complexity of today's financial world and the pressure for short term gain, continuous growth, quarterly results....is it really possible for leaders to demonstrate authenticity?

Well, I think so, but don't ask me, because when it comes to human nature I am The Optimist!

No comments:

Post a Comment