One of the few people to predict the current financial crisis was Gillian Tett, Financial Times Journalist. And she started issuing warnings a good two years before the crash. So how did she get there, and does her approach have any implications for leadership?
The story she tells is of living in Tajikistan for a year looking after young girls approaching marriage as a way of studying their wedding rituals for her PhD. She later abandoned social anthropology as a career and after a lucky break, became a respected Financial Time journalist.
However, her training as a social anthropologist left her interested in communities and the importance of ‘social noise’ i.e. what people are talking about; plus ‘social silences’ i.e. what people are NOT talking about. Thus, in 2006, in spite of the volume of activity involved, no-one was talking about the bond, credit and derivatives markets, collateralised debt obligation or credit default swaps; the products at the heart of the collapse.
What she observed were bankers with a collective mindset that saw money as an abstract commodity completely divorced from human beings. They lived in a world of computer models where innovation was seen as normal and the ‘right’ path to take, and assumed that they were the only people who could possibly understand the arena. Essentially, they were an elite, detached from real life, who couldn’t see the contradictions in what they were doing.
Just like a more primitive tribe, they followed a series of unchallenged rituals that reinforced their views and sustained them as separate group. At the same time, powerful PR denounced criticism as ‘scare-mongering’ or just ill informed.
The parallel for leaders in organisations is the need to look for those social silences. I have worked with organisations where the talk (the social noise) was all about ‘blips in sales’ while wider market trends are ignored, ‘corporate values’ while contradictory practices are over-looked, and ‘competing on service’ while new IT systems let customers down time and time again.
The lesson for business leaders is:
What do we observe in our own organisation that is NOT being talked about – and who seems to feel that they are not being listened to?
You never know, you might uncover the seeds of your destruction before they manage to fruit!