CEO Coach Robinson Blog #One: The Financial Crisis and a pathology of the Leadership Contagion by CEO Coach Robinson

by jeremy.robinson on October 19, 2009

The Financial Times
Image via Wikipedia

It’s the contagion, stupid!

One year into the biggest economic meltdown since the Great Depression and we still don’t get it.

What we don’t get is: the power of contagion.   Or maybe the problem is that we do get it, but we don’t know what to do about it.

Bear Stearns went belly up and Lehman melted down and many other financial houses almost fell like decks of cards.

My equation about emotional contagion goes like this:

  1. Emotions are contagious.
  2. Emotions are highly contagious amongst groups.
  3. The workplace is a group.
  4. The workplace is a location in which employees are especially susceptible to the emotions of others and themselves.
  5. Everybody conducts emotional viruses at work, both plus and minus.
  6. Leaders who are resonant and enjoyable to work for spread positive contagion.  They make us want to go to work.
  7. Leaders who make us fearful and angry spread negative contagion and make us do the same.
  8. I have coined the term leadership contagion to describe what leaders do both intentionally and inadvertently to the organizations and the teams they lead.  It is both a plus and minus phenomenon and it is immensely powerful.

A Retrospective

Back in October, 2008, we were quaking in our boots.  Folks were sure that things had to be done about getting more transparency and repairing the amount of unknown debt out there: derivatives, unsecured mortgages, Credit Default Swaps trading in opaque ways with no transparency.

One Executive Team Member of a well-known financial house pulled me over to a chart from the Financial Times during our coaching session a year ago, last October.

“Jeremy, look at this,” he said with his European accent.

“It’s a chart of all the Credit Default Swaps that exist in the world.”

I looked at the chart. It showed that the market for the CDS had grown from somewhere around $ 100 billion or $ 150 billion in 2000 to $ 63 trillion dollars as of October, 2008.

“Do you know how much $ 63 Trillion is,” my Client asked me, rather pointedly.

I refrained from making a joke. People weren’t making jokes last October.

“No I don’t”.

“Sixty three trillion dollars is more money than exists in the world.”

He was scared. I was scared.  Everybody was scared and we hoped through hard work and luck, a crisis would be averted.

Now things appear almost back to normal and memories are growing short.  This blog is about leadership- specifically the subject of leadership contagion and how it casts a spell on all of us.

Please don’t misunderstand me here: I am not saying that leadership contagion and emotional contagion caused the financial crisis.

What I am saying is that the contagion made the crisis much, much worse.

Though we now act as if the crisis has passed, and the recession is over, we still have not learned our lesson about contagion.

In the ensuing blogs, I’ll be describing how the contagion operated then and how it continues to operate in all of us to make things both better and worse than they are.

My point is that leadership contagion, especially the negative kind, needs to studied and inoculated against.

You can think of this blog as our way of studying that virus. It’s dormant right now, but always ready to burst forth and overwhelm us.

Reblog this post [with Zemanta]

{ 1 trackback }

The Power of Contagion Goes Both Ways
March 12, 2010 at 10:02 am

{ 3 comments… read them below or add one }

Jeffrey Ward October 23, 2009 at 12:36 pm

Congrats! This is GREAT stuff. Please let us fans see more! And soon!

Peter Cohen February 16, 2010 at 6:12 pm

Jeremy,

Great to witness your re-emergence. Your ideas are always timely, incisive and stimulating.

Suzi Pomerantz February 16, 2010 at 10:31 pm

Oh my goodness, Jeremy…you are SO right! I’ve heard myself telling my executive clients for over a year now that fear is contagious, but you’ve just expanded my awareness into a grander context. Leadership contagion…there’s a book just waiting to burst forth from you!

Love your blog, babe.

Leave a Comment

Next post: