Top business leaders discuss leadership in crisis

Having served under four presidents in the White House, CNN commentator David Gergen said he’s learned that it’s hardest for leaders to deal with crises that are on the horizon, and many tend to go into denial.
“It’s much worse to let things fester,” he said. “They’re much harder to deal with.”
Such has been the case with the nation’s most pressing issues, said Gergen, director of the Harvard Kennedy School’s Center for Public Leadership.
The importance of having strong leadership and cooperation during trying times was the central theme of a panel discussion featuring prominent business leaders from across the country Thursday night.
Bill George, professor of management practice at Harvard Business School and former chair and CEO of Medtronic, said when companies are prosperous, it’s easy for leaders to fail them because they develop a sense of arrogance.
“Many people say there is a crisis with subprime mortgages,” he said. “I’d say the problem is subprime leaders.”
The hardest thing for leaders to do in times of crisis is to admit their mistakes, he said.
Much of the panel’s focus was on the nuts and bolts of rebuilding a company once its business model has failed.
It’s important to communicate to employees that you understand the seriousness of the problem while also maintaining a level of optimism, said Anne Mulcahy, chair and former CEO of Xerox. If it’s a big company, everyone must be aligned in the pursuit of common goals.
When Xerox hit bottom, the result of an unsustainable business model, Mulcahy said she recovered “the old-fashioned way,” by going to the different branches around the world, talking to the people there and coming up with actions they understand and can participate in.
For eBay, a company with 25 million people selling on its website and another 1.3 million making their primary living off of it, the recession left its customers struggling, John Donahoe, eBay’s chair and CEO, said.
The downfall of eBay users was due in part to the fact that the ownership lost sight of them, Donahoe said.
“We had gotten flushed with our success,” he said. “We stopped listening to our customers.”
Rebuilding takes a great deal of time and communication, he said.
Some panelists made optimistic predictions about the future of the nation’s job market.
When the jobs do come back, they’ll be in a different form than they were before, Mulcahy said.
More investment needs to go “upstream” to research institutions and increased collaboration must happen between the government, businesses and academia, she said.
The vast majority of new jobs won’t be in corporations, such as large banks or manufacturing operations, but small businesses, Donahoe said.
Over the past fifteen years, 70 percent of job creation was brought in by small businesses, he said.
“It’s the creative entrepreneurs that find a way to get money,” he said.
Each panelist agreed that young people have the opportunity to grow from the nation’s rough economy.
Reflecting on his son who lived at home for eight months after he graduated from college because he couldn’t find a job, Donahoe said young people are in a good place to learn about leadership.
In a discussion on the nation’s future, Gergen said he believes President Obama must develop a strategy for long-term innovation and prepare for the future in terms of supply.
In order for the public to accept the seriousness of the economic and environmental situations, he said, “the president needs to create the sense of a burning bridge.”