Facing the crisis: transforming in the spur of the moment

Every crisis entails an opportunity, granted; but an opportunity is a possibility, not a certainty and, hence, if we do not seize it, we lose it. Although painful, the most valuable opportunity that a crisis brings along is precisely the possibility of transforming for the better what was in existence. It is in the course of the emergency, when worries and perplexity shake us, that the restructuring options start being defined. Later, when the lava cools down, the new relations among players, the new ways of functioning, the new paths consolidate and it becomes harder to shape the transformation. A transformation implies carrying out a series of tasks; it is a complex and fascinating effort of interpreting reality, projecting the future, causing interests to converge, mobilizing wills and organizing action.
Every crisis entails an opportunity, granted; but an opportunity is a possibility, not a certainty and, hence, if we do not seize it, we lose it. The opportunity does not come out to meet us if we become paralyzed and seek cover in the basement until the storm subsides. On the contrary, it will be necessary to come out to meet it while the crisis is in progress, and work in order to take advantage of it.

We pointed out in previous issues that even though the malfunctioning of the financial system triggered the present crisis, other critical factors converged to generate it. In most of the cases, it is necessary to adjust what we do, and how we do it, rather than merely reconstructing what was in existence. A crisis involves a drastic change of circumstances, some of them evident such as costs and pervasive destruction, while others, originated with the adjustment of profound plates of reality, are more difficult to read. The change of circumstances calls for new paths and the initiation of a transformation-building process. It is in this juncture of pain and confusion that it is necessary to transform our course and way of functioning.

The task of building a transformation

Among other factors, social, productive, technological, international trade development constantly foster transformations; yet social decisions are the ones that set the course and mold our way of functioning through a change in attitudes, policies and regulations. When a crisis bursts, the first reactions tend to avoid or mitigate impacts. Fear and anguish in the face of uncertainty obscure the fact that our way of reacting before the crisis lays the foundations for what will come after the trauma.

The strength of the economic tsunami disrupts processes and relations in such a way that opens spaces to develop new courses that were previously unthinkable. It is in the course of the emergency when worries and perplexity shake us that the restructuring options start being defined. Later, when the lava cools down, the new relations among players, the new ways of functioning, the new paths consolidate and it becomes harder to shape the transformation. Although painful, the most valuable opportunity that a crisis brings along is precisely the possibility of transforming for the better what was in existence.

How to work in the middle of a crisis in order to build a transformation that may enable us to seize opportunities?

Various are the work fronts that need to be addressed in the spur of the moment, among others, the task of interpreting reality, projecting the future, making interests converge, mobilizing wills, and organizing action. This is not related to a lineal sequence but to stages that need to be tackled almost simultaneously in order to feed and improve each work front with the information and results that crop up from the rest.

(a) The task of interpreting reality

Although at times not well valued, this is a fundamental space. There always exist various possible interpretations of a same and single reality depending on the analytical framework used to assess it. Some will highlight certain aspects and will acknowledge certain logics of societal functioning while others will choose different interpretative variables and produce alternative explanations of the socio economic dynamic. Although there may be common denominators, it is worthwhile to recognize and accept that there is a diversity of diagnostic outlooks on one same process.
Some ignore that diversity of interpretations and believe they are the owners of the only right view. This occurs in authoritarian or fundamentalist regimes but also in democracies, when powerful interests with major media support back certain viewpoints. In these cases, the quality of the line of argument, the analytical rigor and the capacity to explain facts of each interpretation carry no weight: what counts is how strong the backing for each interpretation is. When support sources are strongly concentrated, there is a greater risk of slipping towards homogeneous thinking, which impoverishes and narrows the capacity to understand what is going on, as well as to sustain more effective proposals for action.
In this “ranking of credibility” the valuable contribution of analysts who only rely on their acute insight into processes is lost. Between the teams who are backed by major media and those having independent views there exist huge disparities in terms of resources and the capacity to make them heard.

In any case, the process of building an effective transformation is based in the first place on an appropriate appreciation of what is going on in the light of the chosen course. This entails selecting adequate interpretative variables, assessing the correlation of forces, recognizing parameters, foreseeing their possible changes in the mid term, and adequately processing the available information.

For instance, some of us consider that inequality and poverty are structural imbalances of the economic system and one of the main causes that generated the current crisis. Others, instead, do not deny the existence of those dramatic imbalances yet do not take them as logical results of the prevailing course and way of functioning and even less as one of the causes that led to the crisis. Each interpretation of the same phenomenon will lead to very different ways of projecting the future, making interests converge, mobilizing wills and organizing the action.

b) The task of projecting the future

Looking at the future is in some sense shaping it so that we can have a guide in the twilight of new situations. Depending on how we envision it, we will influence our courses of action. It is as though the future would influence the present.

We can project the future following the historic trend, or introducing inflection points based on changes of circumstances and society’s willingness to build a transformation. Within this range determinism and voluntarism are equally dangerous extremes.

In determinism destiny is prefigured, which has the twofold implication of preserving the status quo and discouraging the will to change. Certainly, there exist contextual parameters that must be inevitably taken into consideration, as the same impose restrictions that condition the course; ignoring or failing to assess them properly may cause our best intention to fail. But it is also certain that, even within those parameters (which, by the way, change with time) we have room for manoeuvre to exercise our free will.

In voluntarism we overestimate our capacity to change reality failing to properly assess the contextual parameters as well as the correlation of forces within which we must act. Errors of judgment compromise the intended transformation and negatively affect the social forces promoting it.

Building a transformation involves generating a chain of inflection points in our path as a society, in order to adjust our march towards a view of the future (guiding utopia) that hints at another possible, desirable reality. This long-term guide makes it possible to plan an attainable mid-term considering an adjustment in the systemic direction and a continuous effort to make our way of functioning more efficient.

A better course and effective functioning are the fundamental pillars of any transformation. And as we have just pointed out they are based on how we interpret reality and project the future. However, in order to materialize the process of building a transformation, it is also indispensable to cause interests to converge, mobilize wills and organize action.

(c) The task of causing interests to converge

A society has always multiple interests that at times complement and at other times antagonize one with each other. To the extent that more and more interests converge on a same path, larger will be the social energy channeled towards transformation instead of sterilized in struggles among antagonists that only seek to make their own interests prevail.

Some consider the dynamics between disparate interests as a zero-sum process. In other words, what one gains is, inevitably, what the other one loses; hence, the only way to assert my interests is by crushing those of the rest in order to broaden my own realization space. This usually happens in severely imperfect, ill-regulated markets, most particularly, in times of crises or strong economic recession. In these situations ―indeed, today we are going through one of the worst global crises of our times—the strongest, best-informed individuals seek to dump on others their own share of costs and responsibilities.

This, however, must not inevitably be this way. With political leadership and an intensive use of regulatory instances it is possible to find formulas to align interests, cause them to converge into solutions, ensuring that costs are minimized and that the possible results of a transformation are fairly shared. This is a difficult task, because we are not dealing with generous players; instead, we are faced with tough, though ultimately always pragmatic, interests.

If the alignment of interests is approached as in a static context, the room for manoeuvre becomes reduced. But if agreements on interests were to be situated in a dynamic context, spaces to converge would broaden considerably. Even then, furthering the convergence of interests is a tough task, one in which it is necessary to combine firmness with creativity and cleverness. The convergence of interests cannot be left to spontaneity as it seldom happens; without a view of the whole and a leadership that works to generate convergence, each particular interest will tend to follow a self-centered course. The task of making interests converge requires a good understanding of the interests at stake, recognizing existing limits, choosing appropriate ways of approximation, equipping oneself with tools of persuasion, and producing win-win solutions where all parties come to share results.

Yet, even with an accurate interpretation of reality, with a consistent set of mid-term projections, with an effective interest alignment and convergence effort, a transformation cannot be actually materialized if two critical tasks are not tackled: the task of mobilizing wills and the task of organizing action.

(d) The task of mobilizing wills

Mobilizing wills involves knowing how to inspire and guide the different players in a society. It implies understanding their motivations, knowing their longings and fears; mastering a diversity of languages, idiosyncrasies and imaginaries, exercising leadership by integrating efforts and generating synergies, which does not mean to pile up initiatives but to articulate them in a constructive way.

Wills may be mobilized on the basis of deception, although the resulting dynamics is usually short-lived. With time, inconsistencies and frustrations undermine the will to accompany a process that becomes distorted and does not satisfy deeply felt needs.

Charismatic leaders generate enthusiasm, which makes the mobilization effort easier. Yet, effective political scaffolding and a good mid-term project expressing the alignment of interests are required in order to sustain the mobilization. The task of mobilizing wills requires permanence and credibility; discontinuous efforts undermine its efficacy generating voids that are hard to recover. To arouse enthusiasm and full participation it will be necessary to soak into those values and longings that are most deeply felt by communities.

(f) The task of organizing action

The task of organizing action is very diverse and involves all social players, the public sector, businesses and entrepreneurs, civil society organizations, the media, trade associations and unions, to mention but a few. It requires planning but also operational flexibility so that we do not prevent quick responses to the permanent and unexpected changes of circumstances. This involves having to live with a constant tension between seeing to it that what was agreed upon is fulfilled and consenting to changes being made as we go along if reality so requires. If this tension is properly resolved, effectiveness will be gained. The downside here, however, is the risk of facilitating arbitrary action and funds diversion. It is not easy to strike a fair balance as the key lies in exercising good judgement, only that those who must exercise it are, at the same time, imperfect individuals having interests, needs and emotions. Thus there exists an inevitable twofold demand: ensuring ever-greater policy rationality and efficiency, coupled with the need to choose the most rigorous, honest leaders.

Making things happen is no easy task; it has to do with doing what is deemed necessary to generate and sustain a transformation but, in addition and as it was mentioned above, doing it with efficacy, that is, accomplishing what has been proposed with the lowest possible organizational and financial costs or, reversing the perspective, given a certain level of organizational and financial input, attaining the greatest possible impact.

The task of organizing, and then supervising, action faces us with tough issues such as corruption, diversion of funds and energies towards a patronage system, and organizational negligence. A poor leadership and management supervision may sterilize any transformation-building effort.

The task of organizing action must assign a preponderant role to innovation, to refurbishing institutions in synch with the present times, to creating instruments that are ever more effective and most fit for the reality that is intended to be transformed. Each historical phase requires a new generation of instruments. For instance, if reduction of inequity and poverty is a central goal (not just a marginal program) then we will have to give way to new strategies, policies and instruments, including (i) realigning the macro-economic policy (tax, public spending, monetary) in favour of the base of the social pyramid, (ii) mobilizing productive chains leading businesses toward inclusive courses of action so that they fully exercise their meso-economic responsibility, (iii) developing a battery of actions in direct support of the bottom of the social and economic pyramid, placing emphasis on capital formation and the streamlining of the way in which small and medium-sized firms are run. To make the latter feasible, traditional instruments must be supplemented with other new-fledged ones that are tailored to local circumstances, such as inclusive business developers, socially and environmentally responsible angel investor networks and local funds to support productive investments. There is not lack of talent or determination to work in our Southern countries, but support systems are poor in terms of ensuring that our majorities emerge and realize their full potential.

It is worthwhile to close these lines reasserting that transformations are not something magical. Although there is room for charisma, ideals, will power, commitment, determination, and the longing of each one, all factors that have a strong bearing, a transformation implies carrying out a series of tasks. It is a fascinating work of interpreting reality, projecting the future, causing interests to converge, mobilizing wills and organizing action. Is for this reason why we say that a transformation is not dreamed of or awaited, it is built.


See previous Opinion Sur articles on the crisis in two new e-books: [International Crisis: Adjusting the Course and Improving the Systemic Functioning a->http://www.opinionsur.org.ar/crisis%20internac%20Ingl.pdf] and [The Storm of the Century: the Economic Crisis and its Consequences->http://www.opinionsur.org.ar/EBookstorm.pdf].

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