February 24, 2011

The Failure of Leadership During the Financial Crisis

Carol Stephenson, O.C.

Carol Stephenson, O.C. Dean, Ivey Business School February 24, 2011 South China Morning Post Ivey Dean Carol Stephenson (co-author of “Leadership on Trial”) discusses the background of “Leadership on Trial” and summarizes the book’s main points.

Many books and articles have analyzed the causes of the global financial and economic crisis of 2007-09. Yet little attention has been paid to how the quality of leadership within organizations determined how well organizations fared during the crisis.

In the summer of 2009, a multidisciplinary group of faculty at Ivey Business School decided to find out. We engaged more than 300 business, public sector, and not-for-profit leaders from North America, Europe and Asia to discuss the role that organizational leadership played before, during and after the crisis.

In a sense, we were putting leadership on trial. Our aim was not to identify and assign blame. Rather, we examined leadership during this critical period in recent history to learn what we could, and use the learning to improve the practice of leadership today and the development of next-generation leaders.

As we analyzed the role of leadership in this crisis we were faced with one major question: "Would better leadership have made a difference?" Our answer is unequivocal: "Yes!"

Our thoughts and conclusions are published in a report entitled “Leadership on Trial”. This report is a public statement of principles - a manifesto that addresses what good leaders do, who they are, and how they can be developed in organizations. The fact that there were really good leaders who steered their organizations clear of many of the excesses and poor practices that got others into trouble has tended to be ignored in the popular media. Their sound leadership is reflected in the principles of good leadership we present in the report.

We believe that unless concerted action is taken to learn and apply the lessons from this crisis, the excesses, misjudgments and inactions of the last few years will be repeated. “Leadership on Trial” puts forth various "calls to action" suggesting what boards, business leaders, HR and leadership development professionals, as well as business schools can do to improve the current practice of leadership and develop next-generation leaders.

In the following five weeks, we will summarize our calls to action to each of these groups in the columns of this newspaper.

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