The recent global upheaval has brought down some iconic companies, and in some cases it is obvious why these leaders failed.
But in most cases it is not that clear how exactly that leader failed, when we reconsider by visually stepping into his or her shoes without benefit of hindsight. Most of these leaders say they made the best decision with the information they had and were aimed in the direction their stakeholders wanted them to go. Could you or someone you know be next? And it is with this realization that we leaders pause.
Below is one of several news releases that depict a leader that in hindsight didn’t lead in the right direction. This one is about the SEC’s Chairman Christopher Cox. An earlier article was about AIG’s former CEO Martin Sullivan. My comments are in italics.
Facing a House committee, the SEC chairman is unwavering as former colleagues accuse him of being “asleep at the switch” during a heated discussion.
Most leaders will say that they led in the best way they knew with the information at hand. The information that leaders are using, is it flawed? It is likely flawed in that it is incomplete. Do people within organizations have information that, if made accessible through management reporting (scorecard, dashboards, etc.) it could improve decisions? Also likely.
“I would want the agency’s economists and experts to have seen in the gathering evidence that we now know was there, but what virtually no one saw clearly,” he said in his opening testimony before the Committee on Oversight and Government Reform. He was sandwiched between former Federal Reserve chairman Alan Greenspan and former Treasury secretary John Snow, who sounded similarly regretful tones for not predicting the mortgage-market meltdown, but disputed any congressional suggestion that their agencies could have prevented the enormity of the collapse.
But it was largely Cox’s day on the griddle. He fended off lawmakers’ charges that he was “asleep at the switch” as the U.S. financial system was falling apart. He instead tried to focus the congressmen’s attention on the reforms that he is asking for now. He asked them to close up “regulatory gaps” and mandate oversight over the credit default swaps market, which is unregulated; create a statuary regulator for investment bank holding companies; and improve how the federal regulators share information. “Cleaning up the mess after the fact, while important, is not ideal,” he said. “The best thing of course is to infer lessons from what happened and prevent anything like this … from happening again.”
Committee chairman Henry Waxman, a California Democrat, criticized Cox for not pushing for changes in regulation sooner. “The reality is, Mr. Cox, you weren’t doing the job or proposing these regulations beforehand,” Waxman said. “You didn’t anticipate the problems or you agreed with the philosophy that we didn’t need regulation or that the markets could regulate themselves.”
(Please read the full article at http://www.cfo.com/printable/article.cfm/12492852 )
We’ve seen so many faults—privacy, security, governance, control, leadership destroying value rather than building it (or building only for themselves or a select group)—that I must not be the only one wondering how I can make a difference. One difference you can make is to become a champion in your organization to give all levels a voice and in a safe environment to be heard. It can be lonely at the top and asking for help is not so easy. But great leaders do question themselves and openly seek advice and ideas from all levels in the organization. Once you get this on its way, then consider championing the inclusion of executives in the performance management systems that are often focused only down from the executive level. Tougher. And I’ll keep that for another day…