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The Financial Meltdown - Spilled Milk Or Hot Fudge Sundae?
by Lyn Turknett, president of the Turknett Leadership Group
November 6, 2008
I
was thinking about comforting myself with a bowl of ice cream when my son called from
Texas this weekend, and instead I complained to him about what a tough time this is to run a
business. I said that I thought neither the Republicans nor the Democrats had a great understanding
of how to support both businesses and consumers, and thought that they could learn from each
other's positions.
He responded with something that made me really proud. He said he was turned off by the
divisiveness of both Fox and MSNBC, and thought both sides were too willing to ridicule. (This from
a guy who admitted he often adopts the extreme viewpoints of friends or pundits when arguing with
me, and then steals my arguments to use against them!) Here's what made me proud. He
said, "You know, if there's one thing I've learned, it's that positions and ideologies are just
frameworks, just perspectives; they're not the truth with a capital 'T'. You've got to step back
and observe what you think, and be willing to learn from people who don't think like you."
I'm pretty sure more of that kind of thinking would have kept us out of the financial and
business vice we are in right now. Leaders in Washington weren't listening to the
warnings, and leaders in the banking and mortgage industries were raking in the dough and not
wanting to hear anything about risks. A strong dose of humility, a willingness to step back and
listen to opinions that don't mirror your own, is a quality of character all leaders need. When
asked to comment about this historic financial meltdown
Dr. Stephen Covey said: "This is a time of
great crisis. Crisis creates humility - pain humbles people." That would be a silver lining.
Humility is a core quality of leadership character, and it's not the only character trait
that was missing. I've noticed a lot of "experts" shifting the blame for the financial meltdown to
the complexity of modern leveraged financial instruments. But ignorance is no excuse for
failing to think strategically about what's best for your company. Jack and Suzy Welch said
it well in an
article
about the sub prime mortgage fiasco - "...complexity wasn't the problem. Lots of innovations are
complex. The problem was that these products were sold into a yield-hungry market without enough
top managers abreast of why or how they made money." If you're an executive you can't
abdicate understanding how you're making money, and you can't blame someone else when things go to
hell in a hand basket.
So what can a business leader do? First, ask questions. In a recent Catalyst
article
I wrote, "If you don't get it, say so. We should have stopped buying the 'you're not smart enough
to understand, but trust me it's a great business model' with Enron. All of us, to save face,
at times nod our heads and smile when we don't understand something." That's not an
option for leaders, though, so one easy step business leaders can take to turn this mess around is
not nodding when we don't really understand. Nodding is the easy, face-saving road - not
immoral but not high in integrity either. What I have found in many years of working with
large and small organizations is that integrity is better for the bottom line.
From today's perspective business leaders are drowning in spilled milk - jobs on the line,
no financing available for new ventures, or even to meet payroll and nest eggs cut in almost
half. But this meltdown could also be a great opportunity. Dr. Elizabeth Kiss, the
President of Agnes Scott College, recently said to me that she thought the rise of women in the
workforce was bringing a new emphasis on integrity in business. Women's preferred leadership
style is often high in collaboration, respect and responsibility. It may be your time to
shine if you can bring those strengths to companies scrambling to avoid this kind of mess in the
future. So we'll all be dealing with spilled milk for a while, but look for opportunities to
lead with character and you may be able to turn it into a hot fudge sundae.
