Top business leaders discuss leadership in crisis

Panel stressed cooperation, culture and adherence to values.

by Tara Bannow

Having served under four presidents in the White House, CNN commentator David Gergen said heâÄôs learned that itâÄôs hardest for leaders to deal with crises that are on the horizon, and many tend to go into denial. âÄúItâÄôs much worse to let things fester,âÄù he said. âÄúTheyâÄôre much harder to deal with.âÄù Such has been the case with the nationâÄôs most pressing issues, said Gergen, director of the Harvard Kennedy SchoolâÄôs Center for Public Leadership. The importance of having strong leadership and cooperation during trying times was the central theme of a panel discussion featuring prominent business leaders from across the country Thursday night. Bill George, professor of management practice at Harvard Business School and former chair and CEO of Medtronic, said when companies are prosperous, itâÄôs easy for leaders to fail them because they develop a sense of arrogance. âÄúMany people say there is a crisis with subprime mortgages,âÄù he said. âÄúIâÄôd say the problem is subprime leaders.âÄù The hardest thing for leaders to do in times of crisis is to admit their mistakes, he said. Much of the panelâÄôs focus was on the nuts and bolts of rebuilding a company once its business model has failed. ItâÄôs important to communicate to employees that you understand the seriousness of the problem while also maintaining a level of optimism, said Anne Mulcahy, chair and former CEO of Xerox. If itâÄôs a big company, everyone must be aligned in the pursuit of common goals. When Xerox hit bottom, the result of an unsustainable business model, Mulcahy said she recovered âÄúthe old-fashioned way,âÄù by going to the different branches around the world, talking to the people there and coming up with actions they understand and can participate in. For eBay, a company with 25 million people selling on its website and another 1.3 million making their primary living off of it, the recession left its customers struggling, John Donahoe, eBayâÄôs chair and CEO, said. The downfall of eBay users was due in part to the fact that the ownership lost sight of them, Donahoe said. âÄúWe had gotten flushed with our success,âÄù he said. âÄúWe stopped listening to our customers.âÄù Rebuilding takes a great deal of time and communication, he said. Some panelists made optimistic predictions about the future of the nationâÄôs job market. When the jobs do come back, theyâÄôll be in a different form than they were before, Mulcahy said. More investment needs to go âÄúupstreamâÄù to research institutions and increased collaboration must happen between the government, businesses and academia, she said. The vast majority of new jobs wonâÄôt be in corporations, such as large banks or manufacturing operations, but small businesses, Donahoe said. Over the past fifteen years, 70 percent of job creation was brought in by small businesses, he said. âÄúItâÄôs the creative entrepreneurs that find a way to get money,âÄù he said. Each panelist agreed that young people have the opportunity to grow from the nationâÄôs rough economy. Reflecting on his son who lived at home for eight months after he graduated from college because he couldnâÄôt find a job, Donahoe said young people are in a good place to learn about leadership. In a discussion on the nationâÄôs future, Gergen said he believes President Obama must develop a strategy for long-term innovation and prepare for the future in terms of supply. In order for the public to accept the seriousness of the economic and environmental situations, he said, âÄúthe president needs to create the sense of a burning bridge.âÄù