OPTIMISM

Several weeks ago, I was driving to work along the Pacific Coast Highway in Malibu, Calif. The sun glistened off the ocean to my right. Suddenly, the traffic began to slow to a crawl. Several cars were stopped in the median of a six-lane highway where traffic normally moves at 55 miles per hour. One man had stepped out of his truck and was pensively staring at the ground. As I looked closer, I saw a bizarre sight in the middle of the highway: A skunk was attempting to dislodge a McDonald’s soda cup from its head. The skunk had obviously jammed its snout so far into that cup to get the last drops of the sweet liquid, and now it was stuck. The skunk was frantically scampering left and right, violently shaking its head back and forth in a fruitless attempt to dislodge it.

More interesting to watch than the skunk, however, was the man timidly circling the animal — clearly at a crossroads of uncertainty as to whether he should be the hero of the helpless or the victim of cluelessness. Unfortunately, our protagonist decided it was best to leave it to somebody else to solve this problem, and he got back in his truck and drove away.

Just like our protagonist, the world today is gripped by fear and uncertainty. Never before, in almost three decades of business experience, have I seen such pessimism. Chris Bergonzi, in an article titled “Fear, Greed, Blame and Fairy Tales” in this issue of Briefings, observes that we’ve descended into a permanent state of free-floating fear, “reinforced by communication technologies and the media that problems are everywhere, enormous, inextricable and unsolvable.”

Yes, many economies are challenged, but much more debilitating is the psychological and sociological aftershock of the Great Recession: fear and uncertainty.

The side effects have been many. For example, in the spirit of seeing the silver lining, online romance is up, way up, in these challenged times. It seems that unemployed and underemployed people have much more time on their hands to surf the Web for love … and, yes, it’s much cheaper than chocolates and roses. The online match-making site eHarmony reports more traffic to its Web site when the Dow Jones industrial average falls by more than 100 points. Go figure.

How about the other side of happily ever after — divorce? Well, we can’t afford that either. In the United States, the divorce rate briefly dropped to about 35 to 40 percent during the recession as some former starry-eyed lovers tried to hang on. Presumably, when the debate turns from who’s keeping the house to who’s stuck with it, you can more easily forgive your out-of-favor loved one who perpetually forgets the toothpaste cap. If you are a bull in a bear market, however, you will be encouraged to know that the New York Law Journal is reporting that lawyers are seeing 50 percent more potential clients than they did three years ago. On the other hand, maybe it’s just pent-up demand!

Another aftershock has been an insatiable obsession for risk, regulation and finger pointing. The left is moving further left; the right is moving further right. Differences overshadow commonalities. Self-interest trumps mutual interest. This issue of Briefings quotes Dr. Pamela Rutledge, who studies how emerging technologies affect cognitive psychology, observing that “fear creates a divisive, us-versus-them environment that influences our behavior.”

It is precisely at times like these, with much of the world at the intersection of uncertainty and indecision, that leaders must rise above the rest. In the article, “Where Have All the Leaders Gone?” Glenn Rifkin cites Warren Bennis, the legendary organizational scholar and leadership author, who talks about a void in leadership across the board in these challenged times. I recently had the privilege of spending a sunny morning in Santa Monica, Calif., with Bennis at his home. He often cites Max De Pree’s assertion that “the first responsibility of a leader is to define reality.”

Let’s start with reality: Three years ago, the dark-out shades were ripped away, exposing more than a decade of conspicuous consumption in the West. We had simply borrowed too much and spent more than we earned. G.D.P. growth rates were not real. Another reality: Technology advances outstripped job creation. It wasn’t simply a global labor arbitrage finding places in which workers were paid less for punching red and green buttons. Technology continues to significantly disintermediate jobs. At Boeing, from the point an empty 737 airplane fuselage enters the hangar, to the time it rolls out, is just days.

Reality: America’s place in the world has changed. It hasn’t been diminished or disintermediated; it’s just different. Long term, it doesn’t have the advantage of scale (two countries alone — China and India — have roughly a third of the world’s population). As other economies enlarge their middle class, their purchasing power will be breathtaking. The United States will have to rely not on 20-foot walls along its borders, but rather on skill to tap scale outside its borders.

A CEO, a leader, is in the “what” and “how” business. “What” means setting forth a purpose, a strategy, picking people to execute, monitoring and measuring progress, empowering and inspiring the team and rewarding and celebrating along the way. “How” means navigating and course correcting, communicating, listening, learning, leading and, most important, anticipating.

Warren Bennis and I devoted much of our meeting to discussing the skill of anticipating. As he said, anticipating must begin with the leader getting “people to look at the present and not just try to read the tea leaves. Then you get everyone to start considering the question: Based on what we now know, what are the consequences for us?” In Bennis’ speak, you need a team of world-class noticers. In other words, people who can accurately view reality. For America, reality, as former President Bill Clinton recently said, is that the American dream has been under assault for 30 years.

In this issue of Briefings, Rifkin cites Michael Useem, a management professor at the Wharton School and director of the Wharton Center for Leadership and Change Management, who believes that the defining principle of leadership is “the ability to get beyond self-interest,” to transcend constituencies. I believe a leader does this by communicating reality and, second, establishing the common purpose, moving self-interest to shared interest. People will change only if there is a reason to change.

Today, the reason for change is reality. Obviously, there is much more to be planted around these principles — strategy, timing, etc. But the cycle of pessimism will be broken, at least in the West, only if self-interest is transcended and transformed into a common purpose of mutual, shared sacrifice. And, to be clear, I am not advocating austerity without growth investment. However, in some countries in the West, we have simply spent too much for too long and made promises that can’t be kept.
It is precisely at this intersection of uncertainty and fear that leaders pivot from the past and turn pessimism into opportunity.

Pivoting is one thing, but luck is another, and we could use a little good luck now. Why luck in our technological age? Because, as David Berreby writes in his article, “It Pays to Be Lucky,” a great deal of success depends on being in the right place at the right time — and being prepared to seize the opportunities that presents. This factor affects technology, science and even the markets, and it should give us pause. Are we really making the most out of this moment in time?

Traditions. Memories. Contentment. Warmth. Charity. Forgiveness. Celebration. Hope. Resolution. New beginnings. As we enter this charitable season, let us remember to give the gift that keeps on giving: optimism. The world could sure use some.