Subprime leadership.

• Author: Hall, Robert
• Position: Marketing Solutions

We have come to realize that the economic crisis was less a matter of subprime mortgages than subprime leadership.

--Bill George, Harvard Business School

Our recent economic travails set me to thinking about the learnings from this difficult period that will prepare better leaders for the future. Times of crisis can be deadly, but there's nothing like navigating through adversity to forge the skills of leadership.

There is certainly plenty of room for improvement. According to the National Leadership Index at Harvard, while confidence in all leaders dropped in 2008, confidence in business leaders fell 13.5 percent, more than everybody including politicians. The marketplace of public opinion, which includes shareholders, employees and customers, distrusts leadership as in no other time in our memory. While CEOs are top of mind, C-level leaders like chief marketing officers and heads of customer delivery play pivotal roles in the direction and success of an enterprise.

Nothing addles the mind like easy money, and we have lived through a period defined by easy money. Capital was abundant, rates were low, government money flowed like water, incentives were generous and the market strong. Organic growth was no walk in the park, but synthetic growth (trading, mergers and acquisitions, exotic products, and artificially low rates) produced a river of faux success. Leaders in all facets of the business now live with the aftermath.

That was then and this is now. What now? How will living through this difficult time prepare leaders for the future? Let me posit three lessons:

First: Running with the herd will likely get you run over in a stampede. When others are having outlandish success, regardless of how risky or outrageous their approach, it creates almost unbearable pressure to emulate and match them. We only have to look at sports and the wide-spread use of steroids to see how difficult it is to compete in the short-term with people who are cheating or taking inordinate risk to generate short-term results. The ability to substantively differentiate on strategy, markets and execution requires the ability to see things differently. But it also requires convincing shareholders, employees and customers of the merits of the road less taken. We might call these leadership skills "herd management"--the ability to avoid the vagaries of the herd and corral your stakeholders when the market is running pell mell in one direction.

Second: Commitment to being...