Leadership in a (permanent) crisis.

Abstract

The current economic crisis is not just another rough spell. Today's mix of urgency, high stakes, and uncertainty will continue even after the recession ends. The immediate crisis--which we will get through with policy makers' expert technical adjustments--sets the stage for a sustained, or even permanent, crisis, a relentless series of challenges no one has encountered before. Instead of hunkering down and relying on their familiar expertise to deal with the sustained crisis, people in positions of authority--whether they are CEOs or managers heading up a company initiative--must practice what the authors call adaptive leadership. They must, of course, tackle the underlying causes of the crisis, but they must also simultaneously make the changes that will allow their organizations to thrive in turbulent environments. Adaptive leadership is an improvisational and experimental art, requiring some new practices. Like Julie Gilbert, who overcame internal resistance to reorient Best Buy toward female purchasers, adaptive leaders get things done to meet today's challenges and then modify those things to thrive in tomorrow's world. They also embrace disequilibrium, using turbulence as an opportunity to build crucial new capacities, as Paul Levy did to rescue Beth Israel Deaconess Medical Center from a profound financial crisis. Finally, adaptive leaders, such as Egon Zehnder, the founder of an executive search firm, draw out the leadership skills that reside deep in the organization, recognizing the interdependence of all employees and mobilizing everyone to generate solutions.

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