The picture from the Economist serves as the perfect metaphor for the current crisis.
Every crisis brings along with it a new consciousness and a completely new perspective.
Individuals who have faced a terminal illness suddenly seem to value life and relationships more. Some turn intensely religious. Life is never the same before.
I think the same could be true for organizations. After a turnaround, most organizations have a renewed sense of purpose. IBM became a world class services organizations after Lou Gerstener came on board in the mid nineties.
I am beginning to slowly think that this is could be true for economies and countries. Liberalization acquired new currency and followers after India faced the economic crisis in 1991. Many “old model” firms died, some refashioned themselves and many new organizations just became global firms thanks to the liberalization. Infosys is one of them.
Now what has changed during the current financial crisis:
- Nationalization which was so ‘un-American’ has suddenly found eminent backers from Alan Greenspan to Paul Krugman. It increasingly looks like that Citibank may be nationalized any time.
- Markets are not perfectly efficient and people are not always the best protectors of their own self interest.
- Belated realization that the CEO compensation and the bonuses for Wall Street traders have contributed to the crisis. When President Obama said that the bonuses handed out by banks represented “the height of irresponsibility” he spoke for a huge silent majority. As Raghuram Rajam says : “At the very least, shareholders deserve better explanations. More generally, unless we fix incentives in the financial system we will get more risk than we bargain for. Unless bankers offer these better explanations, their enormous pay, which has been thought of as just reward for performance, will deservedly come under scrutiny.”
- The greatest brand names can struggle to survive. Lehman Brothers, Merrill are now consigned to the bins of history and even Citibank are struggling. It pays to be humble.
Can you think of any new consciousness that has emerged as a result of the economic crisis?
Powered by Qumana