“The technical aspects of this crisis are inscrutable. And it takes some time; it’s like an earthquake. You have to go and find out who’s surviving and where was the fault line … Is this tremor done or is there a second shock and a third shock?”
It started with the wrong one
But how did it all go so wrong in the first place? Hal Gregersen, INSEAD Affiliate Professor of Leadership,
His recently-published book It Starts With One, co-written with INSEAD professor Stewart Black, is predicated on the ripple effect of change. “You change individuals, you change organisations. You change organisations, you change institutions. You change institutions, you change countries. It takes individual leaders doing things differently, to have potentially even have averted the crisis.”
“These executives literally kept themselves so disconnected from reality that, in this case, the change started with one, but the problem was their inability to see the change was the problem. Consider instead what might have happened had those same senior executives interacted, talked with, become part of, and had conversations with real people who lived in very different worlds … it would have likely led them to make very different leadership choices.”
“I’m sympathetic actually with the policy makers who are in roles of power and authority who feel responsible but don’t want to worsen the problem by taking actions just because people say ‘act now’. I’m therefore more tolerant of what appears to be not 100 per cent competence, because people need time to figure out what the problem is before they can propose or advance a sensible solution.”
The sentiment towards cutting these leaders some slack is shared by Quy Huy, Associate Professor of Strategy at INSEAD who is a specialist on collective emotions in organisations, although he adds that it is very much in the hands of leaders to now role model and promote constructive behaviors to turn a crisis into an opportunity for substantial positive change in organisations and societies.
In addition, according to Luk Van Wassenhove, Professor of Operations Management and Director of the INSEAD Social Innovation Centre, good leadership is all about foresight and preparedness.
“You get two types of leaders there. You have the leaders that have a lot of experience, have a lot of gut feel, roll up their sleeves, go in there and start doing things. On the other hand, the better leaders are very often the ones that prepare between crises. So they prepare themselves, they prepare their people, they prepare their organisation so that when a crisis happens, they can react better and in a more organised fashion.”
Distributed responsibility
Because we are part of a market that involves capital and resources being allocated on a price system, Rangan says it is unreasonable to expect CEOs to not have been guided by prices.
The key, he adds, is to understand that prices too have a sociological component. The price system may have misguided us and the fact is we are all in a way responsible for moving the markets in the direction of where they are today.
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