Practicing Transcendental Leadership to Rise Above Crisis

• In Event: Business NOT as Usual: Unexpected Leadership Responses to Challenges and Threats

Short Description

The founder of an international organizational behavior consulting firm will share how transcendental leadership was utilized by an automotive company during the 2008 financial crisis, generating unexpectedly positive short and long-term results. The case was written from the perspective of the CEO and select leaders of the executive management team.

Detailed Abstract

During a financial crisis, as almost any other kind of crisis, people tend to experience a shift in focus to attention on self. “The stress reaction arises in individual, groups, and organizations when their well-being is threatened (and) their decision-making is likely to suffer unless they are effectively led by transformational leaders who can help maintain the quality of their decisions” (Bass, B, p. 157). Detonated by the collapse of the subprime mortgage market, the damage affected not only US financial markets, but also rippled worldwide. Mexico’s markets, tightly coupled to US markets, faced significant challenges, particularly in the exports sector. This particular case discusses the impact to a global $3 Billion automotive company, headquartered in Mexico that suffered an obligated and radical reduction within their production plans.

The case realities are explored within the framework of existing theory. The Adaptive Leadership proposition (Heifetz, 2009) is based on the concept that being able to make decisions according to the circumstances is critical for effectiveness. However, from the spiritual or transcendental perspective on leadership, this approach is only part of the solution. It is also necessary to maintain a values-driven and people-centered approach to decision making. This is particularly relevant not only because of the counter-productive, long-term effects of downsizing to cope with the crisis (De Meuse, K. P., Bergmann, T. J., Vanderheiden, P. A., & Roraff, C. E., 2004), but also, because of the impact upon an organization which considers their organizational culture a key differentiator for competitive advantage. Naughton and Sprecht (2011) assert that there is also a moral dimension to leading in difficult times that is unfortunately inadequately addressed.
In universities, instead of connecting future leaders to the whole of their lives, we form them to be isolated from their culture, from their faith, from their families, and from their institutions. We are teaching them not to become persons in relationship to other persons, but to be individuals who not only think for themselves but who think only of themselves. (Sprecht, 2001, p. 10).

Fry (2013) asserts that among others, there are key principles that foster spiritual leadership, such as compassion, humility, ability to reframe, self-awareness, sense of vocation and positive use of adversity.

In this particular case, the CEO’s response to the crisis staved-off downsizing as long as possible, but it ultimately became an unavoidable reality. However, the process was carried out in a manner that generated unexpectedly positive reaction from within the organization. Though many people were laid off, their loyalty to the firm and positivity generally remained intact because of the manner in which they were treated. The leadership team that endured this crisis considers this period of time and the associated stories, perhaps the most compelling period in the history of the organization. From a long-term perspective, following the crisis, the organization has grown significantly and employee morale has remained strong.

During this symposium, the case will be presented in context of a transcendental leadership model with consideration to the following questions. What were the specific decisions the CEO faced? How did his moral and spiritual convictions help successfully cope with the crisis? What was the decision-making process utilized and how was it leveraged to grow the company’s organizational performance and employee engagement in a significant and sustainable way?

Participant

• Enrique E. Lopez, Humanum Consulting