'Most managers look for golden opportunities when the good times are rolling. This is a mistake. The best ones often arise during downturns.' So said Donald Sull, from Managing in a Downturn. In this article, Tammy talks about how harnessing injury and capturing learning can often make the difference between an organisation that thrives and one that fails.

The current economic climate has left many organisations in the grip of huge anxiety and uncertainty about future survival. Many face grave external challenges. Internally, many are in a state of crisis. And crisis, like the proverbial cloud, carries within it the silver lining of opportunity. This is the kind of opportunity that can only be grasped and transformed into competitive advantage when there is space and the ability to think and learn collectively within the organisation. It is the very capacity that is diminished by crisis and the feelings of threat, danger and anxiety that it engenders.

It takes wise, humble and self-knowing leadership, with considerable ability, to enable the organisation to metabolise ‘toxic’ emotion, to resist overconfidence and the urgent call to action and, instead, to create  the space to reflect and learn during crisis.

Whilst it appears to be unfashionable still to talk about wisdom, the other qualities required by leaders at times of crisis have been well documented: humility and fierce resolve; psychological presence and personal authority; and emotional and social intelligence.

Just as each failure carries within it the germ of success, opportunities to learn abound at a time when so many leaders and organisations are in the grip of anxiety and uncertainty. But they are also, arguably, least able to harness them. Harnessing inquiry and capturing learning can often make the difference between an organisation that thrives and one that fails. During an economic downturn, successful leaders are likely to be those best able to capitalise on their personal humility and determination.

Those with the capabilities to create psychological safety and space within the organisation, to enable people to use their creativity and ingenuity, to seek and create new solutions that may confer the ultimate competitive advantage during economic downturn.

There is a big danger in a time of crisis - one that we have seen time and again in organisations from banks and telecoms to local authorities and the Houses of Parliament. At the critical moment when leaders need to face their flaws, accept their fears and intervene appropriately before failure is set as a faultline in the organisation, the fatal mix of anxiety and pride can intervene. Hubris and the illusion of control helps the leader - and his followers - feel less helpless.

Unfortunately, the delusion of mastery, and the sheer relief that comes when overwhelming anxiety is vanquished,  can also ensure that humility and learning are defeated. The solutions sought do not fit the problem - for example: substituting operational change for strategic turn- around; or organisational deformation for structural reform; or investing in activities that mask or deny real problems (public inquiries; regulatory activity; creative accounting or the deferring of debt to name a few familiar examples). 

As a consequence, there may be some first order learning, and a little change, but much of it is self-defeating - it largely maintains the status quo, leaving the core structures and assumptions of the organisation, the leader and the followers undisturbed.

This leaves fundamental problems untouched, whilst creating an illusion of a heroic ‘new world order’. A new speaker is appointed in Parliament; Lloyds takes over HBOS; Childrens’ Services in Haringey scrutinise and are scrutinised ever more closely.

Everything looks different and new, but the essential constituents and workings of the original organisation and the fundamental ways in which it functions and is led remain the same. 

What follows is more of the same, sometimes long after the world has moved on and changed. The old problems persist,  crisis is not genuinely averted and  the opportunity it generated is missed. Now the leader has forfeited a critical moment and a crucial chance to deploy the wisdom, experience, understanding and insight to rise above the terrors of crisis and anxiety, to shape and be shaped by new possibilities and significant change.

The task before the leader in the current climate is not to learn from failure - by the time that happens it may be too late to adapt and change. Rather, it is to install the right conditions for the organisation to learn in conditions that may presage failure. In other words,  to learn in failure.

Quite a tall order. And, paradoxically, one that requires the leader to stand both tall and small. Tall with the stature of determination, authority and skill; and small, with the bending humility of openness to not knowing and to new ideas and solutions.

Centring the leader in the tension between determination and humility is the wisdom that comes from experience, which allows the organisation and its people to dare to learn and change.

© Caret, 2009. All Rights Reserved

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