Leadership Scorecard for the Financial Crisis

Last Updated Oct 9, 2008 12:54 PM EDT

How important is leadership? Without it, you get the worse US financial crisis since the Great Depression.

That's the message from Harvard Business School professor Bill George, an expert in leadership.

"This is not a crisis caused by the failure of complex financial instruments," he writes in a recent Time magazine op-ed. "This is a crisis caused by the failure of leaders on Wall Street."
Let's start filling out the scorecard.

According to George, the worst leaders were those that did not execute their prime directive: keep their enterprises viable. Instead they focused on short-term gains and fattening individual payouts. This group includes the heads of numerous firms including Bear Stearns, Lehman Brothers, AIG, Countrywide Financial, and Washington Mutual. The boards of directors of the failed firms also come up small in George's view.

The true heroes, he says, are those organizational leaders who understood and veered clear of the risks and that prudently prepared for the fallout. This group includes Dick Kovacevich of Wells Fargo, Jamie Dimon of JP Morgan Chase, Ken Lewis of Bank of America, Lloyd Blankfein of Goldman Sachs, and John Mack of Morgan Stanley.

He also singles out Henry Paulson, Treasury Secretary, for his ability "to bring the administration and warring political parties to agreement on the $700 billion bailout package."

George concentrates on Wall Street execs in his piece, but let's broaden the discussion and learn something from each other about what makes a great leader in a crisis, and what defines a poor one.

From a leadership perspective, who do you think has shone in this crisis? The list can include politicians, business executives, media types, candidates, you name it. And don't feel limited to just people in the US. Are we learning something about global leadership as nations coordinate their responses to this expanding crisis?

  • Sean Silverthorne

    Sean Silverthorne is the editor of HBS Working Knowledge, which provides a first look at the research and ideas of Harvard Business School faculty. Working Knowledge, which won a Webby award in 2007, currently records 4 million unique visitors a year. He has been with HBS since 2001.

    Silverthorne has 28 years experience in print and online journalism. Before arriving at HBS, he was a senior editor at CNET and executive editor of ZDNET News. While at At Ziff-Davis, Silverthorne also worked on the daily technology TV show The Site, and was a senior editor at PC Week Inside, which chronicled the business of the technology industry. He has held several reporting and editing roles on a variety of newspapers, and was Investor Business Daily's first journalist based in Silicon Valley.