22nd September 2011
The latest to make a "back me or sack me" pitch is Oswald Gruebel of UBS, as the bank's chief executive steels his determination to stay in his job in the wake of a $2.3 billion rogue trading scandal, reports the Financial Times (paywall).
In the toughest economy the world has faced since the Great Depression, most organizational leaders, whether in business or politics, aren't taking time to ponder their particular style – they are trying to make it through the day, but they face an uphill struggle.
This week the IMF's top financial stability official, Jose Vinals, called for an immediate bail-out of the banks across Europe even if this meant nationalising them, blaming inaction on ‘weak politics', writes Alex Brummer in the Daily Mail.
"Failure of leadership on both sides of the Atlantic has led financial markets ‘to question their resolve'," he added.
Here Mindful Money offers a selection of views on the subject of leadership – and asks for your opinion on what needs to change.
How much value should we place on leadership during a financial crisis?
Of course there are a range of opinions on this question, and we would like to hear yours, but Kim Stephenson, Mindful Money's resident psychologist blogger, for one, says: "People want reassurance and a sense of purpose, so leadership is really important. But it isn't intellectual (because usually nobody knows what the answer is). It is about trust and faith – and every politician I can think of has totally lost the public's trust."
Did failed leadership cause the financial crisis?
Certainly at times the crisis has required urgent action, with leaders that have failed, or perhaps been too scared, to agree and take action – in some eyes the euro crisis in particular has turned into a farce.
An article in The Economist says: "Investors have sniffed out that Europe's leaders seem unwilling ever to do enough. Yet unless politicians act fast to persuade the world that their desire to preserve the euro is greater than the markets' ability to bet against it, the single currency faces ruin…
"It is a sobering thought that so much depends on the leadership of squabbling European politicians who still consistently underestimate what confronts them. But the only way to stop the downward spiral now is an act of supreme collective will by euro-zone governments to erect a barrage of financial measures to stave off the crisis and put the governance of the euro on a sounder footing."
So in general, are people more likely to listen to a collective community rather than a single leader?
These days, when you are in search of a solution or opinion on any subject, the first stop is often the internet – rather than seeking out a professional.
Kim Stephenson says: "People tend to like advice that they see as independent, so people often ignore leaders of any type on the basis that they have an obvious agenda and bias.
"…I use the wisdom of crowds idea a lot in management development because it provides a lot more potential answers to real world problems than one person, however clever that one person is. But crowds don't tend to do much on their own.
"The problem solving capacity usually has to be directed and a crowd isn't often the best way to decide what problems need to be solved, the order to solve them in, to set priorities for achieving long term goals, or to set out the vision of where you want to be."
Is it the individual or a team that makes a successful company?
As Steve Jobs stepped down as Apple's CEO this summer, the press was full of dire warnings about the company's future – and the impact one person had on the company's success.
Ken Eisold, an internationally respected authority on the psychodynamics of organisations and a Mindful Money blogger warns on the ‘halo effect' on his blog: "The idealized glow of a halo makes it hard to see clearly – and to think straight…
"An account of Job's career in Newsweek is suffused with idealizations. At the same time, offering a retrospective of his career, it reminds us that his life, like most of ours, has been chequered and filled with its share of mistakes.
"Most of us probably have not forgotten that he was booted out of Apple for being a poor manager before he was brought back…
"I do not in any way want to take away from Jobs' brilliant achievements at Apple. The point is about us, and our susceptibility to hero worship. It's about how hard it is for investors to think straight and keep in touch with reality."
But even so, the power of one person sometimes cannot be underestimated, whether a politician or CEO. Where would Microsoft be without Gates or Virgin without Branson, for example? They are the figureheads – albeit with a team behind them.
We would like to hear your opinion – what needs to change?
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