crisis leadership

Oct 30, 2008
FLASHPOINT LEADERSHIP
Rallying and motivating the masses
By Kai-Alexander Schlevogt

WHAT is the difference between public leadership and bureaucratic technocratic administration? A political helmsman connects with people not only on an intellectual level, but also emotionally. A specialised bureaucrat solves problems without touching the souls of others.

A crisis is the litmus test for leaders. In a watershed moment, they can shape the course of history or expose their incompetence. Lack of effective leadership is at the root of the current financial turmoil, which explains why the proposed solutions have failed.

People of premier rank have performed dismally in the United States during this crisis. Their actions contrast sharply with best practice in 'flashpoint leadership', which I define as the art and science of inspiring people to greatness in the face of a cataclysmic event. There are three interconnected factors in handling extreme challenges successfully:

Steel yourself as shadow crisis leader
Leaders should develop values, strength, knowledge, action scripts, credibility and networks during their formative years. Since the unexpected can be expected to occur, they must prepare well in advance of a crisis so as to be ready when destiny calls. Chinese Premier Wen Jiabao had gained considerable prestige among his people before he had to cope with the terrible Sichuan earthquake. The masses appreciated him for his humanity, humility and honesty.
By contrast, US President George W. Bush was ill-prepared to tackle the financial crisis. He had squandered most of his leadership credit through his prior failures, especially the Iraq war and his ineffective response to Hurricane Katrina.
Other US leaders handling the crisis, such as Treasury Secretary Henry Paulson and Federal Reserve chairman Ben Bernanke, could look back only on careers as technocrats. Mr Paulson is also a former CEO of Goldman Sachs, a situation that exposes him to conflicts of interest as Treasury head.

Empathise with people on the ground
A crisis is not only a technical problem; it is above all a psychological challenge. In its early stage, a leader has to concern himself more with people than tasks, according higher importance to micro-relations than to grand solutions. First impressions matter, particularly at ground zero.
Premier Wen flew to the devastated area on the very day the Sichuan quake struck and, braving the aftershocks, talked to people buried under the rubble. Former US president Ronald Reagan gave an inspiring television speech to his countrymen shortly after the space shuttle Challenger exploded. He shared the grief of his nation and expressed his admiration for Nasa despite its failure.
Though there is no 'ground zero' in this financial crisis, many ordinary people have fallen victim to it. Mr Bush could have improved the odds of success if he had visited a few distressed citizens in their homes and encouraged them. But his public speeches lacked credibility and failed to resonate with the public, since they appeared artificial.

Mobilise all constituencies for enduring 'total war'
At the next stage, people expect preliminary answers to their questions, preferring simple certitudes over complex thoughts. By visiting the crisis zone and through his observations, the 'idea- sponge-in-chief' can gain a first-hand impression of the catastrophe. Yet he should not become overconfident with his limited knowledge.
At this juncture, the ruler has to mould a small group of gifted individuals into a close-knit team - as John F. Kennedy did during the Cuban missile crisis. The members of such a 'general staff' might be designated 'crisis heroes'. To avoid groupthink, its charter should specify that members must voice dissent when they disagree with proposals. Better still, the team might appoint a devil's advocate. Then, the leader needs to draft what I call a 'back-of-the envelope strategy', with a few meaningful priorities.

Crucially, he has to adopt an integrated, open-system approach which cuts through organisational silos, ensures transparency and encourages critical debate. This would improve the flow of information and material resources, as well as build up public confidence. Then the chief needs to lay down a concrete action plan with practical first steps. He must use all channels to mobilise his followers, transforming his country into a 'nation in arms'.

At a flashpoint, a leader must reinforce core values and national aspirations. Reagan faced schoolchildren who had watched live coverage of the shuttle explosion, since a teacher was among the crew. He explained that the tragic loss was a sacrifice for the sake of pushing human frontiers outwards. He promised defiantly that manned space travel would continue.

As part of the total war, a leader also needs to capitalise on the emergency to push through deep and lasting changes. He has to eradicate the root causes of the crisis and set forth a vision that benefits all stakeholders.
Instead of carefully choosing financial crisis heroes, irrespective of their positions in the bureaucracy, Mr Bush simply delegated the handling of the crisis to top-ranking technocrats. They worked out their plans in secret.
He did not call the nation to arms. Had he asked for sacrifices - promising only blood, toil, tears and sweat - his people would have risen to the task and felt proud of their heroism.

I have no doubts the 'Wenchuan spirit', epitomising unity and humanity in the face of adversity, will occupy a key place in China's psyche. In contrast, because of leadership failure, the sub-prime mortgage disaster has undermined America's belief in democracy and capitalism.

The writer is a professor of strategy and leadership at the NUS Business School and the author of The Art Of Chinese Management.

(Thanks to ST)