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When facing an economic crisis, the clock is always running against policymakers so they should act rapidly to implement the necessary reforms and programmes to avoid further deterioration, writes William R. Rhodes in Banker to the World: Leadership lessons from the front lines of global finance (www.tatamcgrawhill.com).
Examples of such measures that he lists include privatisations, trade liberalisation, tax reforms, smart regulation, development of a viable capital market and, importantly, institution building. “Experience has taught that time is the enemy. The longer one waits, the more difficult it is to stem the tide.
Urging that it is vital for a sovereign in trouble to immediately implement reforms and measures that are bold in nature, the author instructs that the Government must present the reform programme as one of ‘national' origin in order to avoid the perception that it was imposed, rather than supported, by an outside source, whether it be the IMF or another political or international financial institution. For, there will be more willingness to accept tough measures when a society understands that those measures are in the country's long-run interest and have been developed domestically, he reasons.
Build consensus: One of the book's leadership lessons, therefore, is to build consensus, and use innovative ways to solve problems. This begins with the building of a team, say, in the form of a committee. And to get anything done on the committee it is mandatory that we work on a consensus basis, not by majority vote, advises Rhodes. It is important to make everyone feel that he or she had part ownership of the process and of the outcome, he adds.
How so? “I went around the room, time after time, and let everyone have his or her say. Sometimes the parties didn't want to say anything, so I would insist that they do it — that they state their positions on whatever issue was on the table — so that they became stakeholders in what was going on.”
And, as the leader of the committee, you should always know where you want the consensus to end up, advises the author.
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