Blog > Category: Crisis
As the minutes ticked away in the U.S.’ decisive World Cup match against Algeria, U.S. superstar Landon Donovan was determined not to permit a repeat of the U.S. 2006 World Cup disaster, when the Americans went home without a single victory. As his teammates felt their 2010 dreams slipping away, Donovan knew the soccer hopes of the nation rested on his shoulder. This time he could not fail.
As the U.S. saw chance after chance denied by the tenacious Algerian defenders and a lone goal disallowed on a missed call by the referee, even the neutral announcers declared the U.S. deserved to win. This time around an older and wiser Landon Donovan knew deserving success and achieving it are two different things.
Taking an outlet pass from his keeper, he raced down the hundred meter field, looking more like a track star than the crafty midfielder he is, and played the ball forward to teammate Jozi Altidore. When the Algerian keeper pushed away yet another shot, Donovan didn’t hold back. Moving forward toward the goal, he pounced on the loose ball and drove into the back of the net. Pandemonium erupted in the stadium and throughout the U.S. as the entire team piled on top of Donovan’s prostrate body.
When the game ended two minutes later, Donovan buried his head in tears. All he could say to the announcer was “We worked so hard the last four years, we couldn’t let this opportunity slip away.”
What enabled Landon Donovan to rise to this leadership moment? The answers can be found in the disappointments he has suffered from the 2006 letdown, to disappointments playing in Germany and a failed marriage in 2009.
Since he was a teenager, soccer watchers have seen Donovan’s potential to become America’s first world-class soccer player and fulfill the dreams of American soccer lovers. After a solid debut as a 20-year-old on the 2002 U.S. World Cup team that reached the quarter-finals, Donovan was expected to lead the Americans to even greater success in 2006.
It never happened. More than any sporting event in the world, the World Cup is an intense national competition that requires both mental and physical toughness. In 2006, Donovan hadn’t learned what that required. Nor was he prepared to step up to the leadership role expected by his teammates and his country.
Needing a win against Ghana to advance to the Round of 16, the U.S. instead lost the match and was eliminated. Donovan and his teammates earned only a single point in three games. Donovan himself had a rough ride, as he went scoreless and was criticized by U.S. fans for a soft, directionless performance.
Things didn’t get any easier for Donovan after the Cup. He endured difficult stints playing professional soccer in Germany where he only occasionally saw time on the pitch. He endured a difficult breakup with his wife and additional professional strife when news broke of a rift with world-renowned David Beckham, Donovan’s L.A. Galaxy teammate.
But Donovan did more than just “play through” the tough times. He dug deep into the root cause of his problems, and used his self-exploration to grow as a player, a person, and a leader. He even took up meditation to become more introspective.
Donovan told FanHouse.com that his recent struggles made him realize that all-important leadership lesson: the buck stops with him. “I am in control of what I do,” Donovan said, “and before, I thought different things determined how I would play or how I would respond or how I would act on the field.”
That sort of take-charge leadership style has propelled Donovan to new heights. He received the MLS MVP award in 2009 and won the championship with the Galaxy. On the world stage last week, as the U.S. stared at a 2-0 deficit at halftime against Slovenia, Donovan’s new calm and resolve showed through. In the third minute of the second half, he ignited a U.S. rally with a perfectly slotted ball from an impossible angle. When the U.S.’ winning goal was called by another erroneous call, he shrugged it off, saying, “We will focus on what we can control.”
Landon Donovan has learned from the searing pain of his personal crucibles. Rather than deny his disappointments, instead he used them to become a more mature leader, ready for the burdens of leadership placed on his shoulders by his teammates and his country. As the pressure mounted, he played through fatigue and disappointment and somehow kept going at a tireless rate.
When the opportunity presented itself, he didn’t flinch or choke. As he said, “in that instant, time just stopped,” no doubt as he recognized the chance to overcome the pain of the past and achieve his goal. Afterward he even thanked his ex-wife on national television for her help.
Was Donovan lucky? Not exactly, unless you believe (as I do) in Oprah Winfrey’s definition of luck as “preparation meeting opportunity.”
Now Donovan leads the U.S. team against Ghana on Saturday in the playoff round, with a chance to revenge the difficult 2006 loss. He is a battle-tested leader, who has learned to share the pressure, excitement, and joy of the World Cup with his teammates and now-loyal fans. As the Italian and French superstars head for home, Landon Donovan has learned from his crucible and is ready to lead with confidence.
This morning I was a guest on Minnesota Public Radio's Mid-Morning show with Kerry Miller. Chirs Pinney, Director Research and Policy at The Center for Corporate Citizenship at the Carroll School of Management at Boston College, and I discussed business ethics and the Gulf oil disaster. Below is a link to the audio from that discussion:
Originally Posted on Washington Post's On Leadership Blog
Q: Pope Benedict XVI's efforts to deal with the Church's sex scandal raises this question: Can a leader hold managers to account on an issue where his own past performance is in question?
Pope Benedict XVI is facing the greatest crisis of his long career. It's not just his leadership of the Vatican that is on the line, but the reputation of the entire Roman Catholic Church. If the Pope fails to face the reality that problems of pedophilia by priests have brought on the church, many Catholics may lose faith that their church leaders practice the same high moral standards that they preach. This situation is ironic for a Pope whose hallmark has been enforcing moral and sexual standards for one billion of the faithful. Does he have any choice but to require his priests to do the same?
Why is it so hard for the Vatican and especially this Pope to face reality? Is it denial? A cover-up? A double standard? Or simply a desire to protect its own leaders?
First of all, doing so means acknowledging that the church in not dealing as harshly with sexual deviants as civil law and basic morality would require. To suggest that these problems are limited to very few priests or a distant problem corrected long ago only accentuates public denial of the depth of these problems and widespread knowledge of them throughout the church hierarchy.
While addressing a crisis of this magnitude is painful, it must start with the Pope admitting mistakes the Vatican has made, including his own. Next, the Pope needs to deal as aggressively with past defenders as would be expected in a court of law. Then, he needs to install a compliance system that will prevent future occurrences and ensure the early identification of offenders. Finally, Pope Benedict XVI needs to make the Vatican itself much more transparent in order to prevent covering up problems in the future.
These steps, which are similar to what would be expected in government, public corporations, or other religious denominations, are required to protect children who believe in their church. Their protection is far more important than preventing wayward priests from being held to high moral standards.
Originally Posted in Harvard Business School Working Knowledge on February 22, 2010
Toyota's ever-widening problems are a tragic case study in how not to lead in crisis.
Under the media spotlight, Toyota CEO Akio Toyoda, grandson of the founder, went into hiding and sent American CEO Jim Lentz to make apologies. (Editor's note: Toyoda has agreed to appear before a Congressional inquiry this week.) Meanwhile, he let serious product quality issues spiral out of control by understating safety risks and product problems. This left the media, politicians, and consumers to dictate the conversation, while Toyota fumbled the responses.
Disingenuous quasi-apologies and disjointed plans for resolution have been Toyota's substitute for crisis response. As accounts pour in about declining quality, the company parades out relatively unknown mid-level managers to quell the firestorm.
It won't work. "You live by the sword; you die by the sword." Toyota's weapon of choice has always been quality, a competitive advantage that prompted many Americans to stop buying GM and Ford brands. Toyota can only regain its footing by transforming itself from top to bottom to deliver the highest quality automobiles.
When terrorists laced Tylenol capsules with cyanide in the mid-1980s, Johnson & Johnson CEO Jim Burke understood his company credo challenged him to put the needs of customers first. Although J&J was not responsible for these problems, Burke nevertheless recalled every Tylenol product from the market.
This is not a crisis of faulty brakes and accelerators, but a leadership crisis. During Chrysler's 1980s crisis, CEO Lee Iacocca took charge, restoring consumer trust and prosperity. When General Motors emerged from bankruptcy last summer, Chairman Ed Whitacre became the trustworthy, determined face of the company's comeback.
Toyota needs a credible leader with a strong, cohesive plan. Mr. Toyoda is anything but. His uninspired words of optimism from Davos only unnerved customers and U.S. regulators. Meanwhile, Ford and GM are working hard to regain the market share they lost at Toyota's expense.
How can Akio Toyoda get Toyota back on track? I offer recommendations based on my recent book, 7 Lessons for Leading in Crisis.
1: Face reality, starting with yourself. Faced with multiple reports of accidents from sticking accelerators, Toyota blamed the problems on stuck floor mats and panicky drivers. Instead, Toyota should acknowledge that its vaunted quality system failed. CEO Toyoda should take personal responsibility by saying that he pushed too hard for growth and neglected quality. By admitting his errors, he gives every Toyota employee permission to acknowledge mistakes and to get on with correcting them, instead of denying reality.
2: Don't be Atlas; get the world off your shoulders. Toyoda cannot expect to solve problems of this magnitude himself. Instead, he needs a crisis team reporting directly to him, working 24/7 to get problems fixed—permanently. He also needs outside counsel, as he appears to be listening only to insiders who are defensive about criticism. He should add the world's top quality experts to his fix-it team and listen carefully to their advice.
3: Dig deep for the root cause. When Toyota's problems first surfaced, the company blamed a symptom—loose floor mats—and exonerated the accelerators. Instead, management should have required its best engineers to get to the root cause of this problem and every other quality problem being reported. This is basic engineering and quality discipline.
4: Get ready for the long haul. These problems won't just fade away. In fact, they are likely to get worse before getting better. Just as the seeds were sown over the past ten years by placing growth ahead of customer concerns and quality, digging deep into problems will likely uncover more quality concerns that will take years to resolve. Toyota must invest heavily in corrective actions while its sales shrink and profits implode, requiring major cash resources until its reputation can be restored.
5: Never waste a good crisis. For all the pain Toyota is experiencing, this crisis provides a unique opportunity to make fundamental changes required to restore Toyota quality. The crisis is melting away the denial and resistance that existed in recent years. Employees are ready for new direction, and they are willing to make radical changes to renew the company. With Toyoda's leadership, Toyota automobiles can be restored to the world's highest quality.
6: You're in the spotlight: follow True North. In a crisis, people insist on hearing from the leader. Akio Toyoda can't send out public relations specialists or his American executives to explain what happened. Having lost sight of his company's True North—its values and principles—Toyoda must come out of hiding, take personal responsibility, and subject himself to intense questioning by regulators and the media. Then he should make a personal commitment to every Toyota customer to repair the damage, including buying back defective cars.
7: Go on offense; focus on winning now. Coming out of this crisis, the market will never look the same. GM and Ford are rapidly regaining market share, while the confidence of Toyota's loyal customers is badly shaken. Toyota cannot wait until all its quality problems are resolved. It must play defense and offense simultaneously. To win, Toyota has to offer advanced features and superior quality, better value for consumers, greater safety, and improved fuel efficiency.
This is a challenging menu, and this crisis is the true test of Akio Toyoda's leadership. Is Toyota up to these challenges? I believe this is a great company that will resurrect its reputation and restore its leadership.
Originally posted on BusinessWeek.com on Tuesday, November 24, 2009.
The stock market seems well on its way to recovering from the financial crisis, but a deep scar from the recession remains. Americans lack confidence in the nation's leadership to address the challenges we currently face.
The Harvard Center for Public Leadership's 2009 National Leadership Index reveals that 69% of Americans think we have a leadership crisis in the country. Another 67% believe that "unless we get better leaders, the United States will decline as a nation."
At the bottom of the index's ranking of confidence in leadership are Wall Street leaders, closely followed by news media, Congressional, and business leaders. It is tempting for leaders to view these dismal results as a public relations issue emanating from the economic downturn. But this is not a PR problem: It's a leadership problem.
We opened this decade with a wave of appalling leadership failures. Ken Lay and Jeff Skilling of Enron, Bernie Ebbers of WorldCom, Joseph Nacchio of Qwest, and Dennis Kozlowski of Tyco blatantly disregarded the ethical and legal responsibilities entrusted to them by their shareholders.
IMPERATIVE: REBUILD PUBLIC TRUST
We are closing the decade with another wave of leadership failures. Dick Fuld of Lehman, Alan Schwartz of Bear Stearns, Angelo Mozillo of Countrywide Financial, and Chuck Prince of Citigroup (C) sacrificed financial prudence for the possibility of extraordinary short-term gains. Their decisions obliterated billions of dollars of economic wealth and almost destroyed the nation's financial system.
This crisis won't be over until a new generation of leaders emerges that understands that long-term institutional stewardship and maintaining public trust are the two imperatives of 21st century leadership.
Far too many leaders fell into the trap of believing that the purpose of business is to maximize shareholder value and reap personal rewards, rather than serve customers and the society they operate in. In my experience, those that focus primarily on maximizing shareholder value—usually with a short-term focus—are more likely to wind up destroying the value they create.
A recent study of the Standard & Poor's index of 700 international stocks from 1998 to 2009 shows that only 3 of the top 15 winners are U.S. companies—Apple (AAPL), Amazon (AMZN), and Oracle (ORCL)—all headed by leaders with long-term focus. The 5 worst U.S. stocks were AIG, Eastman Kodak (EK), Citigroup, Ford (F), and Bristol-Myers Squibb (BMY). All had leaders with a short-term focus. This list excludes GM, K-Mart, Enron, WorldCom, and Lehman because they declared bankruptcy.
VALUING CUSTOMERS BUILDS SHARE PRICES
Long-term leaders recognize that they cannot rely upon cost-cutting, acquisitions, and other short-term moves to create sustainable value. By focusing clearly on long-term missions, values, and strategies, they earn and keep the trust of their customers, employees, and the society they serve.
The key to creating sustainable shareholder value is to provide superior value to your customers. Such companies as Johnson & Johnson (JNJ), Target (TGT), Google (GOOG), Medtronic (MDT) (where I served as CEO from 1991 to 2001), and Wells Fargo (WFC) focus on their mission and values, which is what motivates their employees. When a company does these things well, revenues and profits expand and sustainable shareholder value follows.
A number of emerging progressive corporate leaders recognize the need for long-term focus to create sustainable value. For example, IBM's (IBM) Sam Palmisano embarked upon a seven-year "leading by values" initiative to reposition the firm globally, emphasizing its service businesses. Indra Nooyi committed PepsiCo (PEP) to a long-term focus on expanding healthy food and beverage offerings. Dan Vasella of Novartis (NVS) invested heavily in drug and vaccine research to prevent and treat intractable diseases. John Chambers is making acquisitions during the downturn to prepare Cisco (CSCO) to lead a new productivity expansion. Amazon's Jeff Bezos keeps introducing product innovations such as the Kindle—even though they take five to seven years to pay off.
In an earlier era, Walter Wriston of Citigroup and John Whitehead of Goldman Sachs (GS) (a company on whose board I currently serve) capably steered the financial markets with honesty, intelligence, and dignity. While many firms were failing in 2008, three Wall Street leaders emerged. J.P. Morgan Chase's (JPM) Jamie Dimon created a culture of candor, enabling his bank to successfully navigate the financial crisis. Goldman Sachs' Lloyd Blankfein built effective risk management into the bank's DNA. John Stumpf emphasized Wells Fargo's core strengths and focused on commercial banking, using the crisis to strengthen its franchise.
The path to restoring the public's confidence and trust in business leaders is clear. We need leaders who are committed to sustainable growth over short-term gains and who serve society by creating long-term value.
At the World Business Forum this past September, I had the pleasure of hosting a reception with the top business bloggers in the country who in attendance cover the events.
I’ve remained in contact with many of them, and recently connected with Jonathan Fields for a podcast to discuss my latest book, 7 Lessons for Leading In Crisis. We also took a deeper dive on crisis-time leadership and social media.
Here’s what Jonathan had to say about the conversation:
“In this candid interview, Bill and I cover everything from leading in a time of crisis to the true meaning of success on a personal level. He reveals not only his thoughts on business, but on family, life, passion and people. And, you’ll never believe what he’s been doing twice a day since the 70s; it’s something he says has been instrumental in his success.”
You can listen to the entire conversation here: Behind The Leader: A Candid Conversation with Bill
* * * * * *
WBF alum, Steve Todd was gracious enough to review 7 Lessons for Leading In Crisis. I’ve included a few excerpts below:
“Overall I enjoyed the unique point of view on the financial crisis, as well as the framework for evaluating leadership. It's a good reference book to keep handy during tough times.”
“If I want to evaluate my own leadership skills during a crisis, the book is an excellent place to turn. If I want to evaluate a public official, or a corporate executive, and formulate a thoughtful opinion of their performance during a crisis, I would refer to this book.”
You can read the rest of the review here: Book Review: 7 Lessons For Leading In Crisis.
Many thanks again to Steve and Jonathan!
As David Gergen explores in his recent US News and World Report article, the release of the "America’s Best Leaders" list could not have come at a more dire – and consequently, opportune – time.
America is facing not only a national economic deficit, but a national leadership deficit as well. Gergen explains that a “crisis of confidence” regarding America’s leadership is widespread as people grow increasingly hostile towards, and distrustful of, the President, members of Congress, and many of our other national leaders.
Though by no means unchartered waters – “confidence in government plummeted back in the '60s and '70s and has never really recovered” - this crisis remains a progress-hampering state of affairs. As David and I discussed during September’s Summit on Leading in Crisis, the political incivility which existed at that time and has continued today holds the potential for violent eruptions (see: 2009 healthcare town hall meetings), and fosters incredible political polarization. This contentiousness can create political stalemates which risk America’s ability to remain a respectable or capable worldpower across the long-term
A crisis indeed.
But as we agreed in September, and as I’ve highlighted in 7 lessons for Leading in Crisis, every crisis holds an opportunity for reinvention and improvement. We should not waste this crisis of confidence; rather we should use it as an opportunity to bare our concerns candidly and see exactly where we as citizens and leaders can improve.
One way to accomplish this is to highlight the examples set forth by those select leaders who have demonstrated value-driven leadership and maintained track records of accomplishment during this “crisis of confidence.”
Herein lays the timeliness of the America’s Best Leaders List. We need to see the likes of Eboo Patel for examples of how we can best bring differing faiths together through shared principles. We should look to folks like Cory Booker as models for effective and diplomatic political leadership. And we must keep the Greg Mortensons of the world at the forefront as examples of how individuals can have worldwide positive impact.
David Gergen gets it right – we are in the depths of a crisis. And he gets a potential solution right as well – we need to turn to “America’s Best Leaders” as models for how we can work through that crisis, and come out improved on the other side.
The New York Times is living in crisis.
The paper announced at 2:49 today that it will cut 100 newsroom jobs. This comes on the heels of significant cuts elsewhere in the organization, and on top of previous scale-backs and pay cuts in the newsroom already in 2009.
This mass lay-off is just one more sign that the once storied-company has failed to face reality. The Times in dealing with a cyclical decline in advertising has ignored that its business model has changed. The advertising losses are a secular trend. Sales will not rebound once the economy bounces back. Instead of investing heavily in new markets (like the Washington Post), The Times built a fancy new headquarters business.
What was Sulzberger thinking? Mark Bowden’s piercing Vanity Fair piece suggests he wasn’t. The Times’ fall from grace is painful to watch. Management has never gotten in front of the significant advertising and revenue declines. Management went on a spending spree at exactly the wrong time (a reason that in January the Times had no choice but to take a $250 million loan from Mexican media mogul Carlos Slim). And all of this on top of having been forced to sell part of its newly constructed headquarters, the construction of which was the ultimate act of hubris.
The Times is a weak pulse away from an all-out flat-line, and the newsroom cuts are certainly a symptom—not a cure. Where were the bold investments in emerging media? Where was the prudent pull-back from an overly aggressive capital structure? Where was management’s judgment then?
Where is management’s judgment today?
For years the Times has refused to face their crisis-stricken reality and dig deep for the root causes of their ills. Now Rupert Murdoch is going on offense and making significant investments in the Wall Street Journal. The Gray Lady sits back on her heels.
We are watching how a giant tumbles. We are witnessing another great institution imploding. Where is the leader she needs?
