22-28 May 2015 #759

Chile takeaways

Leadership, leadership, leadership -- and governance
Sanjiv Shrestha in NEW YORK

On 27 February 2010, Chile suffered massive devastation after being struck by an 8.8 magnitude earthquake. What followed was quick and effective recovery that didn’t just address the devastation but also boosted the economy of the South American country.

In Leadership Dispatches: Chile’s Extraordinary Comeback from Disaster authors Michael Useem, Howard Kunreuther and Erwann Michel-Kerjan pin it down to governance and leadership. The authors attribute Chile’s success to able national leadership (technocratic, rules-based and transparent) and strong institutions for risk readiness (insurance, building code).

For Nepal, the conclusions are obvious and clear. The challenge is to overcome a culture built on inertia and turn it into a problem-solving mechanism.

Emphasise deliberative strategic thinking. During low-probability, high-consequence events leadership based on intuition is not effective. Such situations require listening to experts, relying on concrete data, and doing cost-benefit analyses.

Form a team with one mission and a total focus on the task. Appoint capable managers who look past party affiliation to make decisions quickly, and remain accountable.

Short-circuit the bureaucracy. Going through the normal bureaucracy takes far too long, so a separate emergency channel should be set up to make and execute decisions. Make decisions with a sense of urgency. Put in place mechanisms to quickly resolve logjams and disruptions.

Decentralise leadership. Nepalis jaded by political ineptitude and corruption don’t want another tier of leadership. Decentralising leadership ensures that the voices of those most hardhit are heard. Priorities and perception vary significantly from one town to the next and Kathmandu doesn’t have enough local knowledge. Community groups know their communities best.

Go sectoral and track progress. Divide rebuilding into major areas of focus (education, health, construction, transportation, housing) and apply specific metrics to track and administer results.

Early wins are important to gain public trust. It will be important for the government to show quick progress early on. Nepal’s leaders should set some reasonably challenging short-term goals and deliver on them to gain the public’s trust for its long-term recovery plan.

Implement proper long-term incentives. Now is not the time to think about maintaining popularity only during the leaders’ tenure in office. Think long term, like the Chileans who worked under multi-year contracts with contingent bonuses and subsidies, and leveled the playing field.

Establish basic standards. All reconstruction should be guided and constrained by the nation’s traditions and values.

Work with a long-term vision. Short-term rebuilding efforts seem urgent but it is imperative to use the rebuilding opportunity to plan ahead. In Chile, even though one highway had four lanes, damaged bridges were rebuilt with six lanes.

Develop institutional practice. How can we design standards (building codes) that when coupled with market-based policies (insurance) promise to reduce losses from future disasters, making the country more resilient physically and economically? It may not be practical to require individual families to buy home insurance in Nepal, particularly in rural areas.

Diversify funding sources. We can’t rely on one or a few sources of capital. Charity and foreign grants/loan-reliefs by themselves will not lead us to long-term sustainable recovery. Long-term recovery is only possible through public and private investments. Government must encourage and incentivise domestic and foreign investment.

You don’t have to be a national political leader. Within your own organisation take charge if you are best positioned to make a difference, be a good manager, act fast, take calculated risks, build partnerships, secure the expertise you lack.

Chile’s leaders did it and we can too. Rebuilding doesn’t follow a single recipe, but the key seems to be able leadership at all levels. Chilean leaders stepped up from Day 1 with a dogged determination to achieve a result that would be good for the country not just for the President’s tenure but for generations to come.   To summarise the authors:

1 Articulate a vision

2 Think and act strategically

3 Take charge

4 Motivate the public

5 Build a diverse top team

6 Place common purpose first   We must as a nation engrain deliberate decision making and accountability in our psyche. We must have proper economic incentives in place to encourage adherence to certain minimal standards so that we are better prepared when the next disaster strikes.

Read also:

Needed: A Marshall plan, Editorial

Shaking things up, Editorial

Homeless in Nepal, Editorial

Lessons from Sichuan, Kunda Dixit

A more responsive state, David Seddon