Innovation/Global Crisis Blog

Business Leadership in Troubled Times: Oxymoron?

Why Restoring Jobs Requires First Restoring Trust

By Shlomo Maital

       Let us agree that the latest stage of the ongoing global crisis is the most worrisome.  Bank crisis became financial crisis, became economic crisis, and now – a crisis of suspicion. People everywhere have (rightly) lost faith and trust in their political leaders.  And leaders have lost trust in the people’s ability to hear the truth and accept bitter medicine.  Banks have lost trust in their lenders, people have lost trust in their banks.  Workers too have lost trust in senior management.  A study by Maritz shows that in the U.S. “… only seven percent of employees strongly agree they trust senior leaders to look out for their best interest, and only seven percent strongly agree they trust their co-workers to do so. Approximately one-fifth of respondents disagree that their company’s leader is completely honest and ethical, and one-quarter of respondents disagree that they trust management to make the right decisions in times of uncertainty.”

    We are learning that trust is the fundamental currency of global markets, not dollars.  Without trust, there is neither an economy nor a society.   

       Facing this vacuum of trust, business leaders have utterly failed to step forward.  In the U.S., facing a possible bond default, business organizations (like the Business Roundtable and U.S. Chamber of Commerce) screamed at Obama NOT to default – but offered nothing constructive on how to slash deficits and restore economic growth.  An editorial in today’s Global New York Times basically called ‘business leadership’ an oxymoron (internal contradiction). And I agree.

    A country is a business.  I address this question to business leaders everywhere.  If you were CEO of USA Inc., UK Inc.,   Germany Inc., Israel Inc., Greece Inc.:  What would be your competitive strategy, in the face of shrinking global markets, excess debt, over-leverage and political paralysis?  What would you do? And why?  And how would you communicate your plan to people, so they would understand and support you, and trust you?  Restoring jobs starts with restoring trust in our system.  Trust requires leadership.  We have neither. 

    Why is a nation’s turnaround plan any different from that of a business – except, it’s far more important and far more complex?  And where in the world are our highly-paid business leaders —  spending the vacation month of August on their yachts in the Mediterranean, replicating Obama’s ill-considered vacation, in the midst of turmoil, on Cape Cod.