Tuesday, September 29, 2009

Leadership in a Time of Crisis

In a time of crisis, leadership can be a rare but an extraordinary thing to see . Briefly discussed last week, a prime example of this was the case of Cantor Fitzgerald, the US company that lost the most employees in 9/11. Cantor Fitzgerald lost 658 out of 960 US employees in the terrorist attacks that day. However, within two days after 9/11 Cantor Fitzgerald was open and operating, trying to put back together everything that had been destroyed.

How was this possible? Due to the leadership of Cantor Fitzgerald’s Chairman and CEO, Howard Lutnick. Lutnick, whose brother was among the 658 employees that perished, helped reestablish Cantor as a leader in their industry. He also helped provide for Cantor families by donating 25% of Cantor’s revenue for the five years after 9/11 to their families and paying for their healthcare for a decade. He also set up financial planning and investment services for these families to help get them back on their feet. Since 9/11 he has helped raise $180 million dollars for victims families as well as worthy charities.

Faced with this situation, Lutnick could have liquidated the company and considered everything lost. When things hit rock bottom what caused Lutnick to step up and lead his company out of this situation?

Was it his individual traits? During this time Lutnick showed empathy toward people’s situations and feelings. He cared and helped provide for families even after loved ones were gone. He showed courage in the face of chaos. However can this be accredited to his inborn traits, or due to the situation he was faced with? As Selznick says “leadership is a kind of work done to meet the needs of a social situation” (pg. 22) and McGregor recommends that it is “fruitful to consider leadership as a relationship between the leader and the situation” (pg. 182). Considering these points, would Lutnick have garnered so much acknowledgement as a model leader without such an event as 9/11 occurring? Also, considering leadership as a relationship not only with the situation but also among the followers, does Lutnick’s success as a leader during this tragic time reflect the fact that he had “effective followers” (Kelley, pg. 196)? The people that showed up to the office two days after this tragedy were truly committed employees who were courageous and weren’t afraid to take on the extra work and challenges in this hard situation. Burn’s states that “leaders and followers are engaged in a common enterprise; they are dependent on each other, their fortunes rise and fall together” (pg. 426). Lutnick and his followers were devoted toward a common goal, keeping the company afloat not just for their jobs, but to preserve the company in memory of the deceased. They were living these tragedies together. It would have been impossible for Lutnick to turn everything around by himself. His followers played an important role in his strength and success during this time.

In our world of terrorist attacks, failing economies and tragic natural disasters, it is important to understand the capabilities and roles of leaders in crisis situations. By doing this, we can ultimately understand as leaders or followers ourselves how to be more effective in producing change and favorable results.


  1. Reading this blog reminded me of Geneen's article where he states "leadership is practiced not so much in words as in attitudes and actions" and those true to their word would receive loyalty, trust and respect (pg. 16).

    Lutnick certainly proved himself trustworthy and respectful provided actual outcomes of his (and his followers) actions. But what about before 9/11? Was the loyalty of fellow employees to follow Lutnik post-9/11 indicative of effective leadership pre-9/11?

  2. I agree with Cynthia that it would be interesting to know what was in the company happening pre-9/11. This article brought to mind some aspects of Daniel Goleman's article for this weeks reading. His studies concluded that the more leadership styles one displays, the more successful that leader will be. It seems that in this situation, Lutnick is an example of authoritative and affiliative leadership. After 9/11 with his company facing a crisis, he embodied the "come with me" authoritative mentality (Goleman 82). When change was happening, he provided direct leadership. He is also became an affiliative leader with the idea of "people come first." He attempted to heal his company during a crisis by building relationships and showing empathy.

  3. Thanks for your comments! I do agree that it would be interesting to find out more about the firm pre 9/11. In my research before writing the blog the majority of what I found were articles hightlighting him on his efforts post 9/11, however I did come across a few perspectives of him pre 9/11. Pre 9/11 he was described as having a reputation as a "tough Wall street negotiator" who had "sharp elbows" and "took no prisoners." In the immediate days after 9/11 people were skeptical about whether he would stand by his commitments to the families. But after everything that he did within those days, months and years after 9/11 people really came to respect and follow him. I will see if I can dig up any other perspectives or information on him pre 9/11 before class today!

  4. Erica, your post brings to my mind one of the features of the bystander's effect- more the number of observers, greater the diffusion of responsibility.Is it possible that Lutnick took on the responsibilty to put back his company together because he was the head of the company and so there was no ambiguity about who should be taking the lead? If he was an employee, would he have taken an initiative to put things together? This brings us back to the debate of whether leadership is a function of traits or of the situation? To my mind it seems to be both- Lutnick turned out to be a good leader not only because the situation demanded him to be but also because he had the necessary traits.

  5. After we talked about it in class last week, I had looked up a few articles and the resounding sentiment was how much of a family the company was before and after the tragedy, which had helped it weather the tragedy. There was no way though that the style of leadership would not have to be changed even a little bit after 9/11 even if that just meant an additional feeling of cohesiveness by the group. Lutnick was not only exhibiting empathetic gestures, he was building on the experiences to gain an even tighter feeling of cohesiveness. I wonder if they experienced groupthink in many of their decisions following 9/11 because of the tight bond they had formed and in a way of protecting themselves from outsiders?

  6. That is an interesting point Haley. It was reported that Cantor lost 20 "doubles" on 9/11, or sets of family members, such as a father and son. It was very much a family company where people worked and lived in the same communities. So Lutnick post 9/11 definitely fed off of this group cohesiveness.

    In terms of the concept of groupthink Janis states "that the advantages of having decisions made by groups are often lost becuase of powerful psychological pressures that arise when the members work closley together, share the same set of values and above all face a crisis situation that puts everyone under intense stress." (pg. 44) Though I don't know for sure if that was something that went on, under stress peoples ability to work together and make individual decisions lessens. If groupthink did occur would it necessarily be a bad thing in the days, weeks or months following 9/11? I would argue not as someone had to exert authority over the situation to get things done.


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