LEADERShIp IN CRISES IN A MULTINATIoNAL
CRISES Never waste a good crisis
When Barack Obama was elected for his first term as President of the United States in 2008, it was widely described as “a good election to lose” because the global financial crisis was at its height, or at least at what we then thought was its height. Rahm Emanuel, who was to become his chief of staff, said:
“You never want a serious crisis to go to waste. . . . Things that we had postponed for too long, that were long-term, are now immediate and must be dealt with. This crisis provides the opportunity for us to do things that you could not do before.”
This reminded me of my youth in BP, when the advice given to young employees that “the way to get to the top in this company is to be in charge of operations in a small country when there is a coup d’etat.” Handle it well and you are made. Handle it badly, and it is time to move to another company and cover your tracks. If there is no crisis your career will be unexciting and limited. Leadership careers need crises.
Burning platforms
The value of a crisis has also been recognized in the strategy literature, where Kotter and others have spoken of the need for a “burning platform” when leading change. Not always, though. Thom-as Stewart hThom-as considered this in the Harvard Business Review, with reference to how Sam Palmisano successfully kept change going in IBM, even after a successful period under Lou Gerstner, who had been blessed with an undeniably burning platform. Palmisano is something of a model for the mod-ern multinational leader, dismissing phrases such as “People don’t do what you expect; they do what you inspect”, which worked when jobs were unambiguous and the boss was close by, but does not work under modern multinational conditions. As Stewart puts it, Palmisano is
“A leader who created a case for change not by pointing to a crisis but by stoking the fires of ambition-to-be-great that burn in employees. Prodded by Palmisano in a com-panywide intranet conversation, tens of thousands of IBMers poured out nearly one million words calling upon the company to become more than it is. This was an extraor-dinary mandate for change.”
Palmisano operates through values; not empty value statements, but the outcomes of rigorous and meaningful conversation. So platforms do not have to burn; good conversation is an alternative, but therein lies the challenge. How do you maintain a good conversation across a multinational?
Bias for action
One of the killers of good conversation is a “bias for action”. To be fair, the book with that title, by Bruch and Ghoshal (2004) does not say what most people who quote it but have not read it think it says. They are clear that “busy” managers, those with a bias for action, are often not effective. A bias for action may mean taking comfort in doing something rather than in working
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out what to do. Most consultants know that clients are keen to move very quickly from problem definition to active problem solving. The consequence is solutions to problems that nobody has got. When there is a crisis, most people want to be seen to be doing, not thinking.
Goalkeepers
Let us consider what happens to goalkeepers in football. When a penalty is being taken, goal-keepers have a bias for action. One study suggested that their chances of saving the penalty were best if they stood still, but they move because it looks better to supporters and coaches. Another study, from Wood and Wilson (2010), suggests that a moving goalkeeper distracts the attention of the kicker, with the result that the kick is closer to the goalkeeper and more likely to be saved.
In a crisis you must not reward your staff for purposeless action, and must not punish them for thinking, but equally, your competitors will be looking for ways to deepen the crisis for you, and anything you can do to distract them from this could be worthwhile.
Covering your rear
How much time in your organization is spent on reports whose function is to enable other people to defend themselves against criticism? If crises are followed by hunts for the guilty, then everyone will need defences to show that they have monitored the behaviour of everyone else thoroughly. In public organizations we are familiar with “death by auditing”, where we spend a lot of time creating a paper trail to show what we have been doing. This may be good for divert-ing blame, but it does not get the work done.
The art of not being there
One of the ways of dealing with crises is absence. I worked for a very effective leader, and at times of crisis, in his absence, people would ask, “What would Alan do in this situation?” Then, with laughter, someone would point out that Alan would do exactly what he was doing – he would not be there! This can be personally effective, but it is not leadership. It is not making something happen which would not happen otherwise – it is simply a way of keeping your repu-tation and your career safe.
Bp chairman
This was well exemplified recently during the Deepwater Horizon oil spill in the Gulf of Mexico by the Chairman of BP. Most people can remember the event and the way it was handled by the President of the US (blame the British – he even called the company “British Petroleum”, which it has not been for a long time) and the Chief Executive of BP (Tony Hayward, mostly noted for gaffes such as saying that he was longing to get his life back, and going sailing with his family in the midst of the crisis). Very few people can remember even the name of the Chairman of the company, who was conspicuous only by his absence.
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Leadership in Times of Crisis I Lectures from the First MCC International Leadership Conference
Leadership in Crises in a Multinational I David Sims
MULTINATIoNALS
We now consider the distinctive features of multinationals when it comes to the leadership of crises. In many ways they are like traditional empires, and make the same kind of mistakes. They all have a fund of stories about the ridiculous misunderstandings emanating from Head Office, and all these stories are like the British design for Kuala Lumpur railway station, built to with-stand a heavy fall of snow. It has never snowed in Kuala Lumpur.
physically draining
More specifically, leadership in a multinational can be physically exhausting. The travel, the jet lag, the pressure to appear to be fresh and active when your body is crying out for sleep, all take their toll. Anyone who has participated in a late night drinking session in Japan, in between international flights, will know what this feels like. This is a confusion between leading and be-ing Superman. What makes us think that the person who can ignore jet lag is gobe-ing to have good leadership qualities? In the days of the Roman empire, when they might need to lead by example in hand-to-hand fighting, possibly. In current multinational life, why would this be so? Never-theless, it is widely expected.
Culturally diverse
The problems of interpreting body language and inflexions of voice in different cultures are much harder – especially if you are tired. The interpretation of words can be equally difficult;
when and where does “yes” mean “no”? Can you have a good conversation without causing un-necessary offence? Very few people can both lead and stay sensitive to these issues for them-selves, although many think they can. The wise multinational leader will usually ensure that they have a trusted colleague or advisor to tell them about the cross-cultural issues they are missing.
CoNCLUSIoN Agenda shaping in multinationals
Now let us put together the themes of leadership in a crisis in multinationals.
Features of leadership in a crisis in a multinational include:
1. You are not in control. You are deluded (or it is not a crisis) if you think you are. Effective leaders know that leadership is about marshalling others’ complementary skills, nurturing, developing, shaping, but is never about control except in a prison.
2. Too much is going on, on too many different dimensions, for anyone to be able to make sense of it all. But then, people usually make better sense when they make it with others. In a crisis you are extremely busy, but to save time by cutting out conversation and by making solitary, autocratic decisions, is a false economy.
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3. Success means staying on your surfboard, rather than following a planned route. The surf-er appears to be in control, but is actually conducting a complex, intuitive, responsive set of physical tasks in order to stay upright on the board. The skill is staying on and going where the flow takes you. A pre-planned strategy for surfing leads only to falling off.
4. For a multinational, your competitors gather round like sharks in the water to try to make the crisis worse for you. You are never alone – and multinational business life means that there are other companies whose PR departments will be devoted to publicising and deep-ening your problems wherever possible.
5. Everyone is anxious in a crisis, and the temptation is to start working on the wrong prob-lem. You need to find a workable definition for the agenda of what needs to be done. I will give a political example of how this can go wrong because it is one that we are all aware of.
At the time of the destruction of the Twin Towers, on 9/11, President Bush set the agenda of how to respond to this situation. He described the situation as a “War on Terror”. This agenda was repeated many times and in many places, including by the British Prime Min-ister, Tony Blair, and all those involved in what was called “the coalition of the willing”. It was a disastrously bad agenda, leading to the failed war in Iraq and to the deaths of hun-dreds of thousands of people. At the time, everything was happening so fast, emotions were so high, and he came up with the agenda so quickly, that it looked as if he had no choice.
But he did. There is evidence from the buying and selling of stocks and shares in the days before 9/11 that some people made large amounts of money out of the crisis. So it could have been defined as a massive economic crime, and they could have sought Osama Bin Laden as someone who made large amounts of money out of the deaths of others. But in-stead, the agenda that was set was the war on terror. How do you wage war on an abstrac-tion? You cannot. Hence the muddled and ineffective direction of Western handling of the crisis. The more anxious everyone is, the more important is the leadership role of setting an achievable agenda.
Leadership of Simplexity
• Complexity of thinking is required to notice and register the variety – the wild profusion of things – that reflects an increasingly random, entropic world.
• Action clarifies situations – it eliminates “might have beens” by reducing equivocality.
(Colville, Brown and Pye, 2012)
Crises are coming at us more and more quickly. We need complex understandings of what is going on; would you wish your surgeon, in a crisis, to operate on a simplified understanding of your brain? We need simple actions so that we can understand their consequences, and hence improve our understanding of what is going on; would you want your brain surgeon to delay doing anything until she felt she understood everything? In the crisis-ridden environment of the multinational, leadership in crises will need good conversations, richly complex thinking, and simple actions to be effective.
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Leadership in Times of Crisis I Lectures from the First MCC International Leadership Conference
Leadership in Crises in a Multinational I David Sims
REFERENCES
Bruch, H. & Ghoshal, S. (2004). A Bias for Action. Harvard, Mass.: Harvard Business School Press.
Colville, I., Brown, A. & Pye, A. (2012). Simplexity: Sensemaking, Organizing and Storytelling for Our Time.
Human Relations, 65, 1, 5-15.
Fineman, S., Gabriel, Y. & Sims, D. (2010). Organizing and Organizations; 4th edition. London: Sage.
Grint, K. (2001). The Arts of Leadership. Oxford: Oxford University Press.
Sims, D. (2010). Looking for the Key to Leadership under the Lamp Post. European Management Journal, 28(4), 253-259.
Wood, G. & Wilson, M. (2010). A Moving Goalkeeper Distracts Penalty Takers and Impairs Shooting Accuracy.
Journal of Sports Sciences, 28, 9, 937-946.
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Leadership in Times of Crisis I Lectures from the First MCC International Leadership Conference
Fejlôdés válságok idején – esettanulmányok vezetésrôl I Malcolm Gillies
FEJLôDéS VáLSáGoK IDEJéN – ESETTANULMáNyoK VEZETéSRôL
M A L C o L M G I L L I E S
A VáLSáGoK LEhETôSéGEI
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gy jó válságot nem szabad elfecsérelni.” Vajon Jézus Krisztus, Arisztotelész vagy Shakespeare mondta ezt? Helyettük inkább egyik személyes hôsömet, Hillary Clintont idézem (titokban ab-ban bíztam, hogy ô lesz az amerikai elnök 2009-ben). A mondat 2006. március 6-án hangott el (reuters.com). De mivel kapcsolatban is mondhatta ezt? Az éghajlatváltozás, netán egy közgaz-dasági reform, egy politikai átrendezôdés vagy egy üzleti változás volt a téma? A szomorú igazság az, hogy a klímaváltozásról mondta. Ám a szakértôk nem éltek a lehetôséggel, hogy bármi jelentôset tegyenek az éghajlatváltozással kapcsolatban a késôbb, Koppenhágában megrendezett globális találkozón.A tankönyvek részletesen felsorolják, milyen lehetôségeket kínál egy válságtól sújtott idôszak:
számos módszer kínálkozhat a hatékonyság növelésére, a stratégiák átgondolására, a folyamatok megújítására, és így tovább. Engem azonban jobban érdekelnek az olyan „mellékes” dolgok, hogy miként gondolkodunk másképpen egy válság során annak érdekében, hogy átfogalmazzuk az üzlet lényegét, vagy akár új vállalkozásba kezdjünk.