Der Standard - 21.03.2020

8 |MÄRZ/MARCH2020 LeadershipStandard DERSTANDARD

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It all sounds likeanover-dramaticwake-up call?Eventhe current Corona-crisis maybeatrue opportunity

for leaders torethink their outdated assumptions.

has made its way to the top of the

agenda of companies, public sec-

tor bodies and governments du-

ring the last decades. However, we

have terribly ignored the challen-

ges that the new man-made envi-

ronment of myriads of intercon-

nected companies, consumers, in-

vestors, public sector institutions,

governments and NGOs poses.

They are all part ofaweb that Pe-

ter Drucker called the new Social

Ecology. Just like natural ecosys-

tems, our social ecology needs

care, maintenance and diligent

stewardship.

I

nthis perspective, while just-

in-time globalized supply

chains can justly be celebrated

as agreat advance in management

practice, the resulting dramatic

increase in vulnerability must be

part of the leadership equation. In

the same way, the globally integ-

rated virtual enterprise with its

company roles and functions dis-

tributed across the globe could be

hailed asagreat organization in-

novation that freed us from the

constraints of time and space. Yet,

again fromaleadership perspecti-

ve, the organizational gain has to

be weighed against the social im-

pact of large-scale off-shoring and

the damage done to trust in corpo-

rate leadership both internally

C

risis always shifts people’s
attention abruptly to the
quality of their leaders. We
are seeing this now, as the appal-
ling spread of the Covid-19 virus
and the alarming collapse of eco-
nomic activity worldwide have
people in all quarters looking to
leaders for guidance—and often
being left far from reassured by
what they see.
Why do people give so much
more attention to their anointed
leaders in such moments? Leader-
ship pundits usually explain that
when ordinary folk are panicked,
they grasp for certain things:amo-
del of resolute confidence to calm
their nerves,aclear thinker to out-
line the right course of action, a
decisive actor who wastes no time
dithering. All this is true.
But what many students of
leadership miss is that people also
know that any crisis isatimeof
uncertainty and ambiguity, when
changes are afoot.They suspect
that rules will be altered, priori-
ties willreorder ,and that some
of those who used to be up will
find themselves down. And they
want leaders who can be trusted
to protect theirinterests, not ad-
vanceapet agenda of the leader’s
own or their cronies. Theywant
leadership focused on practical
solutions –not motivated by
ideology, let alone political consi-
derations.

T

he fact that so many leaders
in these past weeks have
come up short on all these
requirements underscores that
our institutions must focus more
on improving how they are led –
just as they have, over the past
century, so vastly improved how
they are managed. The two func-
tions are not synonymous. In any
enterprise, good management
means seeing that work is done in
the best way to achieve an organi-
zation’s objectives. But figuring
out what those objectives should
be and orchestrating the capacity
for collective performance with
the right players in place is the
province of leadership. As the
classic expression goes, manage-
mentis doing things right–leader-
ship is doing the right things.

F

iguring out the right things

to do has always been diffi-

cult because it involves jud-

gment and strategic vision, and re-

quires tradeoffs. But the challenge

has become much greater given

the modern world’s unpreceden-

ted level of connectivity and inter-

dependence, and hence complexi-

ty. Across the past 200 years, we

have seen the formation ofavast,

man-made network of organizati-

ons and institutions. Equally, the

notion of being stewards of our na-

tural ecology, our environment,

and in society at large. Managing

investment portfolios through ar-

tificialintelligenceandautomated

algorithmic trading processes that

amplify shocks to the system and

accelerate downwards spirals is

another example of the culpable

abdication of leadership responsi-

bility to digital systems that are

hailed for achieving new levels of

productivity and efficiency.

A

tthe same time, govern-

ments and public sector

bodies seeking to impose

sweeping restructuring on whole

sectors, such as the automotive in-

dustry in Europe, should be force-

fully reminded of the huge costs of

such top-down transformations in

terms of social burden and de-

struction of economic value. They

lose sight of the fact that the soci-

al ecology is made up of evolutio-

nary systems that cannot be trans-

formed by government fiat with-

out creating unintended conse-

quences that may be more dama-

ging than the ill they are intended

tocure.TheGerman“Energiewen-

de” (Energy Transformation), and

the stifling regulatory microma-

nagement that has become the

norm are examples of this failure

of leadership vision. Responsible

leadership needs to embrace both

the preservation of the natural en-

vironment and the need to keep

modern society functioning by

nurturing the social ecology of va-

lue creating organizations and in-

stitutions.

If all this sounds like an over-

dramatic wakeup call,Imake no

apology. The Covid-19 shock hits

us atatime when our economic,

social and political fabric are al-

ready significantly weakened. As

The Economist’s Adrian Wool-

dridge reminded us at the 10th

Global Peter Drucker Forum in

2018, we are livingasevere crisis

of leadership. This crisis is massi-

vely amplified today by the latest

developments. In the midst of the

financial crisis in 2008, Rahm

Emanuel, then chief of staff to Pre-

sident Obama, madeamemorable

observation to an interviewer:

“You never wantaserious crisis to

go to waste.” His meaning was

that, because people are unusual-

ly compliant when rattled, leaders

would be foolish not to use the li-

cense granted to them to make big

change. The phrase is often repea-

ted as the quintessential cynical

response toasituation that can be

exploited to push what would, in

normal times, be an unpalatable

agenda. Yet odd as it may sound,

even today’s crisis isareal oppor-

tunity for leaders to rethink their

outdated assumptions.

I

nterms of the leadership agen-

da, the first essential is clearly

tomobilizetheleadersofallor-

ganizations to live up to their re-

sponsibilities–initially in the fire-

fighting phase that we are current-

ly traversing. The more power lea-

ders wield, the more they must re-

member the crucial importance of

their current role in servingabig-

ger cause and strengthening trust

with their communities and socie-

ty asawhole. This includes inves-

tors, who largely remain hidden

behind anonymous trading sys-

tems and who were the main be-

neficiaries of the long-time boom

on stock markets. They must re-

member that they are not inves-

ting in shares but in real people,

for whose livelihoods, and lives,

they beararesponsibility. To just

run away is not an acceptable re-

sponse, either ethically or econo-

mically. As leaders and stewards,

they are called on to takealong-

term perspective and demonstrate

this by their actions. Berkshire

Hathaway’s Warren Buffet should

be arole model in this respect. Fi-

nally, surmounting this crisis in

the coming months will require us

to reassess the importance of

leadershipfortheremainderofthe

21st century. It must be based on

fundamental human values, with

human dignity in the center, deep

understanding of reality, constant

openness to learning from that

reality, andaprofoundly pragma-

tic mindset that finally jettisons

the ideological blinkers that we

have inherited from the 19th cen-

tury. Our society needs leadership

for value creation and innovation

without which our social cohesi-

on is in danger. The good news is

that we have all the human poten-

tial available to achieve this. The

leadership challenge for the 21st

century is thus to liberate that

potential and make fully produc-

tive the most important resource

on the planet–human ingenuity,

creativity and readiness to engage.

RICHARD STRAUBis Founderand Pre-

sident of the Global Peter Drucker Forum.

The 2020 Forum will take place on Oct.

29 and 30 in the Vienna Hofburg Palace

with the general theme: Leadership

Everywhere–AFresh Perspective on

Management.www.druckerforum.org

ATime for Leadership

Richard Straub

Illustration: Getty Images

L2|MÄRZ/MARCH 2020