I heard the emergency alarm before anyone else as I was the first to find him sprawled across the fire. A sudden stroke had reduced this tall, proud man to a crumpled mess and as his daughter – who is also my mother- froze, I pushed the telephone into her hands, tended his burns and carried him to the ambulance. I was fourteen and this was my first crisis. I had no time to think. An instinct to attend to the problem, to the exclusion of everything else, including my own emotions, took hold of me. From where it came, I cannot say, but it is that same instinct I have seen in others who thrive in a crisis, the same instinct which, as the pandemic has already demonstrated, leaders are going to need as they navigate this age of uncertainty.
The world is a more chaotic and dangerous place than at any point since the fall of the Berlin Wall in 1989. After 1945, the compensation for the threat of nuclear annihilation was the stability competing superpowers brought to international affairs. The Soviet Union’s implosion invited disorder and a series of repeated challenges to US hegemony, including on American soil in 2001. I had a ringside seat to the financial effects of the 9/11 terrorist attacks as I was at the heart of the UK’s financial establishment, working alongside those who had to deal with big falls in stock markets and the instability of the financial system. A little less than a decade later, I found myself in Dublin as a desperate Irish State began its secret negotiations with the IMF for a rescue loan. In those fretful days, it really did feel as if Ireland might go bankrupt and find itself ejected from the Euro Area.
In both crises I saw the best of what humans can achieve when events run out of control… and I also saw the worst. Although much is written about crises and crisis management, it is usually from the pen of those looking in from the outside. I have sought to correct this imbalance in Post-Pandemic: 12 Lessons in Crisis Management. It is an insider’s take on crises, the account of someone who has been there equally when the balloon goes up and when the shit hits the fan. It is also the account of someone sceptical about how we write about crises. They are messy, disjointed and disconcerting affairs. They happen in real time, require imperfect decisions to be made using imperfect information, and no one knows what is going to happen. Yet we often write about crises without allowing for the effects of the “Fog of War”. Hindsight is a wonderful gift, but it is impossible to recreate the feelings of despair, fear, relief and joy which course through the bloodstream of those involved at the time.
Leaders need luck, but they also have agency…
– Jonathan McMahon
This has not only created a bland and distorting literature but also resulted in a troubling mismatch between what we teach our leaders and what we require from them in a dangerous and volatile world. Most business education exists in a sort of Cartesian laboratory jar, embalmed in the fluids of rationality, sealed away from the chaotic reality of business. An MBA is, at best, an abstraction. And it is a distorting one due to its central conceit that people, organisations and events can and should be controlled. It is no accident that the bankers who made a mess of the financial system in 2008 and the central bankers and regulators who failed to stop them, were all educated to believe not only that they had the answers, but that there were no other answers. Only when the Emperor stood naked did it start to dawn on entire populations that perhaps those in charge did not, after all, know what they were doing. An insight which, of course, escaped many of those suddenly defrocked.
It took a different caste of leaders to sort out the inheritance of broken balance sheets, capital deficits and non-performing loans. This is a recurring consequence of a crisis: one set of leaders replaces another. It could be argued that this proves the importance of luck and timing in a senior leader’s career; and this would not be wholly wrong, but I have seen the best leaders adapt to changed circumstances and I have witnessed the very best do so ahead of time. Leaders need luck, but they also have agency. I wish you well finding the MBA elective on intuition, or the one which explains how to read a metaphorical change in wind direction. Similarly, you will struggle to find the senior executive selection process which places any weight on those essential qualities of judgement which are hard to document and difficult to measure. All of which leads boards to raise the safe pair of hands accountant from the finance function to the CEO seat, or to opt for the dull yet reliable candidate above the creative, edgy maverick from marketing or sales.
But it will be the maverick who saves your company when the waves break across its bows. It will be that person willing to say “Yes, but what if?” who will steer you away from the rocks, who will not follow the herd, who will tear up the rulebook when the game changes. And when others are failing to compute a changed reality, it will be that person who will see what needs to be done and make it happen. The 2020s are going to be a difficult decade. What is left to be seen is whether it will be one like the 1970s, in which poor leadership only made things worse; or will figures emerge, as they did in the 1930s and 1940s, who will make the world a better place? An appreciation of history will help leaders navigate the coming years. Those able to embrace history’s central lesson -that we live in a chaotic and unpredictable world- are more likely to emerge stronger from this crisis. At least they will if they abandon all hope of an easy time, a happy ending or an outcome they can easily influence.
About the author:
Jonathan McMahon is an alumnus of the University of St Andrews and the London Business School. A director at the Central Bank of Ireland between 2010 and 2012, he worked before at the Financial Services Authority (UK), Deloitte and the Promontory Financial Group. Since returning to the UK, he has been a partner in a consulting business and a senior executive at St. James’s Place Plc. In May 2020, he founded his own companies, Green Arbour Consulting, a financial and business consultancy, Well Human and 145 Studios.
Post-Pandemic: 12 Lessons in Crisis Management by Jonathan McMahon
is published 7th September (The Liffey Press, £16.95)
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