Former Chrysler CEO Lee Iacocca published a book last year called Where Have All the Leaders Gone? and challenged readers to name one who emerged from the disaster of Hurricane Katrina.
The same challenge seems equally appropriate in times of credit crunch and looming recession. Why does there seem to be a leadership vacuum at a time when leaders are needed most? Will it persist when the finger-pointing subsides and the global financial storm, seeded with $700 billion in bailout money, rains itself out?
Yes, the leadership vacuum most likely will persist, says University of Southern California business professor Warren Bennis, co-author of Transparency: How Leaders Create a Culture of Candor. Bennis calls it a "leadership meltdown."
"All of the failures can be traced to poor leadership," says Harvard management professor Bill George, former CEO of Medtronic and author of True North: Discover Your Authentic Leadership.
Poor public perceptions
The public saw the leadership vacuum coming long before the latest crisis. President Bush's approval rating had fallen to historic lows and was closing in on 20%. The job-performance rating of Congress was even worse. Harvard's annual National Leadership Index, released this month, found that 80% of the public saw the USA in a leadership crisis. That's up from 77% last year and 65% in 2005.
There were 1,132 CEO departures in the first nine months of 2008, on pace to break the record 1,478 in 2006, according to outplacement firm Challenger Gray & Christmas, and up from 700 a year from 2002 to 2004. Worldwide confidence in business leaders is the lowest it has been in the 10 years of an annual survey by human resources consulting firm Development Dimensions International.
"We've become so impatient in our expectations that many times, we don't give people long enough to discover if they are leaders," says Marilyn Carlson Nelson, former CEO of Carlson Cos., which operates Radisson Hotels and T.G.I. Fridays.
The public deserves to be angry, but the public should also avoid reaching the conclusion that all leaders fall into the same category, says Nelson, who also sits on the boards of ExxonMobil and US West. "I see many leading with a great deal of authenticity and are responsible global citizens. They are resisting the temptation to take shortcuts to provide short-term results."
Leaders need to go beyond speeches, even go beyond making personal sacrifices, and give followers a sense of hope and destiny, says Jeffrey Sonnenfeld, founder of Yale University's Chief Executive Leadership Institute.
Gaining respect with distance
Pessimism is not universal. Leaders of Iacocca's generation were not as heavily exposed, their every decision not "sliced and diced," says Chris Kearney, CEO of Fortune 500 company SPX. He says many great leaders, including Winston Churchill and Abraham Lincoln, were unpopular at the time, and he believes that those who will be seen as leaders tomorrow are right now stepping up and making hard, unpopular decisions.
Edward Lawler, director of the University of California's Center for Effective Organizations, says that expectations of leaders have risen so unrealistically that it's nearly impossible to succeed. President Kennedy had a low approval rating at the time of his assassination, Lawler says.
For whatever reason, the public is losing tolerance for anything that goes wrong and has higher expectations for what goes right, says Bruce Avolio, director of the Foster Center of Leadership at the University of Washington in Seattle. Being wrong has always been costly, but never as costly as it is today, Avolio says.
Sonnenfeld says he senses something different in the air, something that tells him the old blueprints of leadership are no longer valid.
"Theories of regulation and efficient markets are not quite working to plan," he says. "The levers that we have pulled in the past aren't responding in the same way."