Leadership essentials

Arising tide raises all ships is an oft repeated phrase in economic parlance. The Oracle of Omaha, Warren Buffet summed it up more graphically, “It is only when the tide goes down that you know who is swimming naked.” A slowdown or any other crisis doesn’t just separate good leaders from the mediocre ones it also often brings out the best in true leaders. Turbulence focuses the mind wonderfully and that is why some of the best ideas come out during a downturn.

In current leadership research a lot of stress is being placed on contingency or situational leadership models. While this is not a single theory but different variations of the same theme, the essential premise of leadership model is that the situation defines the leadership that is required. A leader is successful only if he can change behaviour and style in accordance with the needs of the situation. Quite often, a leader who is superbly successful in one situation may fail completely when the situation undergoes a radical change. Even people who do not agree with this model of leadership agree on one point. Crises requires a very different sort of leadership than normal times. And the global economic crisis tested the leadership mettle of various leaders.

Though there have been lots of busts, slowdowns and recessions in the past, the global economic crisis was unique in the sense that it tested managerial and leadership skills of corporate leaders to the limit. And it created havoc across industries and geographies.

The economic history of the 20th century is often seen in terms of pre-Great depression and post Great Depression. It is likely that when the economic history of the 21st century is written it will be similarly divided into the pre and post Lehman Brothers era’s.

It is not as if there were no boom-bust-boom cycles prior to the Lehman Brother’s bankruptcy. It is simply that the global financial and economic meltdown triggered by the bankruptcy seems to have changed the economic realities of the world forever. The corollary of this argument is that the norms of leading a company in this new world will be very different from the rules that were followed in the older days and this calls for new skills and ideas.

This issue of OER is important not just because it provides insights managing boom-bust cycles better but it’s insights are pretty timeless. The interviews in this issue have thrown up some of the most candid observations on leadership and management, and some rather innovative ideas on how to deal with turbulence.

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