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Winston Churchill in 1940. Rudolph Giuliani in 2001. They have "what it takes," said Fortune magazine, in a story about crisis leadership last November. The article implied corporate America is in a financial crisis and, like New York City after September 11, is sorely in need of the Churchill and Giuliani "take charge" brand of leadership. But corporate leaders will ape both these men's flair for... More

Winston Churchill in 1940. Rudolph Giuliani in 2001. They have "what it takes," said Fortune magazine, in a story about crisis leadership last November. The article implied corporate America is in a financial crisis and, like New York City after September 11, is sorely in need of the Churchill and Giuliani "take charge" brand of leadership. But corporate leaders will ape both these men's flair for the dramatic at their peril, for Fortune's major premise was false. In late 2001, the survival of American industry wasn't hanging in the balance, recession or no, even when compounded by the terrible events of September. And Fortune's minor premise - that forceful, visionary, and emotional leadership is more effective in adverse times than careful, analytical, and cerebral management (or, as Fortune wrote, "After years of losing ground to its dowdy cousin, Management, Leadership is back") - is, at best, an oversimplification. In fact, our research finds that the CEOs whose companies are best weathering the recent downturn are practicing old-fashioned, pragmatic management by the numbers - what we call yellow-light leadership. This conclusion is based on an ongoing Booz Allen Hamilton study of about 40 Fortune 500 companies, conducted with the Center for Effective Organizations at the University of Southern California and initiated in 2001. This finding is significant because it casts doubt on the conventional wisdom that says there are only two models of leadership. One is visionary, or "green-light," leadership, appropriate to periods of economic growth. The other is crisis, or "red-light," leadership, best applied when companies, industries, and economies are tumbling. Our ongoing research suggests that while there is value in both the green-light and red-light models, neither extreme is effective in times of uncertainty.

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