In times of crisis, people's behaviors and perspectives--both in their personal and work lives--change irrevocably. Those that adapt to the changes have the best chance for success. As a result of the current economic crisis, our economic system will fundamentally change and will not return to the "way it was." Our organizations will need leaders who understand that and provide the kind of leadership necessary for the new era.
The August issue of the Harvard Business Review provides an insightful look at managing in the new world. From the financial perspective, Niall Ferguson, a Harvard Professor, outlines two distinct scenarios for the U.S., which could take it into fundamentally different conservative or liberal directions, depending on the success of the current economic initiatives. Eric Beinhocker, a senior fellow at McKinsey & Company, observes that the public has lost trust in business, noting that a low trust environment makes everything more difficult about doing business--from higher transaction costs, lower brand value, and more difficulty in talent management. Regaining trust will be a prime imperative the leaders in the new era.
Ronald Heifetz, Alexander Grashow and Marty Linsky in their article in the special HBR issue argue that when the economy recovers, a different mode of leadership will be required. They propose that the new managers must be much more adaptive, pormoting adaptation in their organizations, embracing "disequilibrium"--a balance of comfort and change for people, and distributing leadership throughout the organizations.
Jeffrey Pfeiffer, a professor at Stanford University, writes in the HBR issue that shareholder's interests as a business priority is not longer acceptable to the public, customers and investors, and needs to be replaced with a consideration for all stakeholders, including employees. This will assuredly require a new leadership style.
Steven Bornstein, President and CEO of ESPN and Anthony Smith, director of Keilty, Goldsmith and Company, an international consulting firm, wrote in the book edited by Peter Drucker, The Leader of the Future, that the leader of the new era needs to have two prime ingredients--honesty and empowerment of others. This will certainly put the focus clearly on leaders' ethical behavior.
These issues and many others emanating from the recession will now require a much different kind of leader than those that led us into the recession and the difficult choices that are coming out of it.
Ray Williams is Co-Founder of Success IQ University and President of Ray Williams Associates, companies located in Phoenix and Vancouver, providing leadership training, personal growth and executive coaching services. He can be reached at rwilliams@successiqu.com