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Articles

Crisis, banks, economy on the brinks. Familiar terms are back again, this time in a more exotic local: Cyprus. This crisis, the doomsayers claim, will cause irreparable damage to the local economy, and more broadly the EU. Same old story we’ve heard before, right? Well yes and no, in this case the Cypriot government initially planned to tax depositors in its national banks—a hugely unpopular move, that has since been rejected by the Cypriot Parliament. Still, even the threat of taxing deposits has caused a run on banks and ATM machines around the country. Suffice to say, the Cypriot leaders have both a public image and a public trust problem. Oh, and on top of that the EU has given them four days to find a solution before they pull emergency funding from the country. So what can this situation teach us about leading during a domestic crisis?

It is clear that the population of Cyprus and the government are out of sync. Misunderstandings and lack of trust are rampant and worst of all, the citizens of Cyprus feel totally powerless. How would an Athena leader handle this situation?

In 2008, Iceland was in a very similar situation to the one Cyprus is in right now. Early in the financial crisis, bank speculation in Iceland inflated a financial bubble that finally burst and wrecked the national economy. Citizens were outraged and felt betrayed by their governmet. In order to repair the public’s trust, the new government listened. We met Örn Bárður Jónsson, a Lutheran minister, who was named a constitutional committee member of Iceland’s new government. Örn led the outreach to include and build consensus with the public by crowdsourcing a new constitution with citizen input via Facebook and Twitter. The masculine command and control model is based on a ‘zero sum’ game were one wins and the other loses. Yet the best leaders of the sharing economy are not dictators, but facilitators, collecting thoughts and fielding input from all levels of the organization. They empower and lift people up so that everybody's voices can be heard, which improves their decisiveness and ultimately builds support for their transparent and inclusive decision making.

At its core, the Cypriot crisis is still about financial uncertainty. Instead of using the typical financial instruments to “bail-out” the Cypriot economy, which seem entirely too complicated to affect the everyday lives of the country’s citizens, the EU should attempt to humanize their impact on the Cyprus economy.

We look to the innovative work that Emily Bolton, a Director at Social Finance in London, is doing as an example of the possibilities for creative financing. “Social Impact Bonds” have become a new—and decidedly more empathetic and collaborative—currency in the United Kingdom. In its pilot program, the bonds were used to fund an experimental program that helps inmates in Peterborough make the transition from prison to life in society. If the rate of re-offending prisoners drops below 7.5%, then investors profit. The money initially raised in the bond offering goes towards mentoring, housing support and mental health interventions and because the investors are hoping for a return on their money, they become actively involved in supporting these programs. Call it a ROE (Return on Empathy). While many leaders dream up markets and create unmet (and often unwanted) needs – empathy could very well represent the forefront of true, new and breakthrough innovation.

These are two ways Athena Leaders have taken on difficult problems in their own countries. We believe it would be in Cyprus’ favor to explore creative solutions to their difficult problem. It just might help to reestablish public trust in two industries, politics and finance that are being vilified but are vastly important to the success of the Cyprus’ future.

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