True North, Emerging Leader Edition, 3rd Edition

12LEADING IN CRISIS

Never let a good crisis go to waste.

—Winston Churchill, prime minister, United Kingdom

In the past 2 decades, we have careened from one crisis to the next. The new century started full of optimism but quickly turned tragic when New York's World Trade Center twin towers were toppled by al‐Qaeda on September 11, 2001.

Shortly thereafter, companies like Enron, WorldCom, Tyco, and others melted down in a pool of fraud and their chief executive officers (CEOs)—Jeff Skilling, Bernie Ebbers, and Dennis Kozlowski—wound up with long prison sentences. Meanwhile, dot‐com companies saw their stock prices collapse, as Cisco lost 83 percent of its value and Amazon went down 89 percent. Those two quickly rebounded, while many others never recovered.

Boom years in stocks followed, driven by aggressive traders, high leverage, and minimal liquidity. Corporations were forced to respond to demands for short‐term earnings and increased cash returns to shareholders via stock buybacks. Widespread lack of fiscal responsibility led to the global financial crisis, triggered on September 14, 2008, by the bankruptcy of Lehman Brothers. Its collapse was quickly followed by the insolvency of leading financial institutions, including Citigroup, Merrill Lynch, AIG, and dozens more, causing credit markets to shut down completely.

There followed a decade of recovery until the 2020 arrival of the COVID‐19 pandemic. It shut down economies all over the world until governments stepped in ...