The longer the global financial crisis drags on, the more layers of complexity become exposed. Who would have thought that people all over the world would so avidly follow a financial drama with an arcane plotline involving subprime mortgages, derivatives, collateralized debt obligations, investment banks, commercial paper, credit default swaps, toxic debts, and recapitalization? Suddenly it seems every media commentator, blogger and barroom pundit has his own view on the crisis, its culprits and how the whole mess should be solved.
What can an advertising agency CEO add to this mix? Last week, as fears of a prolonged consumer recession multiplied, I spent a challenging day with undergraduates at Brown University, exploring my belief that the future of marketing communications lies in ending what I call "idea racism," in embracing global collaboration and creative solutions no matter where they originate. This week we've begun to see that concept play out on the global stage, as genuine partners join forces to coordinate their response to the financial disasters we're confronting, no longer certain that the American bailout and the British plan of action are the only programs for positive change.
While everyone has a stake in the drama and everyone has the right to an opinion, some opinions have more serious implications than others. Senior-level businesspeople monitoring the news in real time have more than their own households and financial well-being to worry about. Company leaders like me have thousands of stakeholders to consider: employees, clients, suppliers, shareholders, and local communities. They know that any decision has the potential to stabilize or destabilize many hundreds of households. Of course, a "wrong" decision will cause distress far and wide, but even a "right" decision in these uncertain times is likely to leave many people struggling.
Business leaders are not only faced with making some very tough decisions on the fly, they have become increasingly easy targets for blanket condemnation. In fact, the pro-business tide flowing since the early '80s may well be turning. The culture of business is entering the worst identity dilemma I have ever known--magazine covers presume we are crooked and college students wear T-shirts that decry our ethics ("CEOs Are Pigs").
Business leaders are suffering a general loss of respect far worse than the fallout from the demise of Drexel Burnham more than 15 years ago or the unraveling of MCI and Enron at the beginning of this decade. In the same week when Lehman Brothers was allowed to fold and AIG was up against the wall, Charlize Theron was on morning television talking about her role in the movie Battle in Seattle, about anti-globalization protesters.
Many of us were able to manage through the dot-com bust and earlier turbulent periods, but what we're living through now shows every sign of being different, and that's more than just media hype. It takes more than another blip in the business cycle for a levelheaded sage like Warren Buffett to make comparisons to Pearl Harbor. It takes more than some domestic difficulty to get several of the world's major economies to coordinate a bank rate cut. It takes more than a recession for governments to organize multibillion-dollar rescue packages.
This is the first time in at least three generations that we've experienced this kind of crisis of confidence. And it's certainly the first time in history that anyone has had to manage businesses in a globalized world of 24/7 connections and around-the-clock activity. Who, in any business or government leadership role, could have accumulated enough experience to navigate the current crisis with certainty?
No matter what happens, the coming months and years will provide intense on-the-job training for senior leaders. What works best will be whatever delivers the right mix of stability and adaptability to rebuild shaky confidence. In a recent article in the New York Times, World Bank President Robert Zoellick recalled a conversation with a senior Chinese economist who said that the Chinese don't see this as doomsday for the American economy: "They know America's ability to turn around problems is really unmatched, historically. At the same time, they ask themselves, Will the United States get at some of the root causes that could determine its real strength over the next 10 or 20 or 30 years?" Nobody knows for sure what to do next, but we do know that leaders must possess a cool-headed ability to evaluate the information bombarding them and a knack for provoking smarter thinking.
Today's leaders also need a sure-handed capacity for coordinating the talents and ideas of their teams: not so much "command and control" as "provoke, gather and coordinate." Who knows today, let alone tomorrow, where solutions to our problems might come from?
The same applies to ideas for breakthrough products we can barely yet imagine. Which means we have to stop idea racism. Smart answers can come from anywhere. Centuries ago, it was the fruits of Incan farming expertise (potatoes) that revolutionized European agriculture and societies; the genius of Tuscan traders that invented banking as we know it; the high-level thinking of Indian and Islamic scholars that established the concept of zero in mathematics; the dogged commitment of Japanese engineers that pioneered continuous improvement.
Which individuals or combinations of leaders and businesspeople will come up with strategies that resolve the short-term credit crisis, ensuring that entrepreneurs and Fortune 500 companies alike can continue to make payroll, let alone innovate? Henry Paulson? Gordon Brown? Nicolas Sarkozy? Who in the world has the desire or the ability to help the U.S. solve the mounting crisis in its aging rust belt? Will the best-in-class solutions to the alternative-energy conundrum be cracked by engineers working in labs on the Indian subcontinent or by those in Silicon Valley?
Hard times don't end at the U.S. borders, and neither do solutions. We have to open our minds, expand our expectations and communicate with thinkers outside our traditional circle of influence. We must depend on, and embrace, interdependence. In a globalized world where problems have global repercussions, senior leaders need to be tuned in to potential solutions from anywhere. "Not invented here" makes less sense than ever.