Executives will probably name vision, honesty, or the ability to execute change as qualities of a leader in times of crises. However, there is a lot more to it, says Sujan Saha, Managing Director, BASF Catalysts India Pvt Ltd.
In our lives, whether on a small, medium, or large scale, we all encounter crises. None of us, as individuals, part of organisations, societies, or countries, are insulated from these challenges. Today, I’ll discuss how these crises are interconnected and how we, as leaders, individuals, members of society, or parts of organisations, should act in response.
The origin of the word ‘crisis’ is quite interesting. It comes from the Greek word ‘krisis,’ which means ‘decision’ or ‘action.’ Understanding this can change how we view crises. They’re not just about challenges but about the critical decisions we must make.
As individuals, none of us are insulated from global crises. Some crises are familiar to us such as pandemics. Before COVID-19, there were other pandemics, although their scales varied. We’ve also faced trade wars between countries, impacting businesses significantly. Trade policies or strained relationships between nations can have a profound effect on our business.
I personally believe that the level of crises, chaos, and uncertainties we face in the future will only intensify. One significant event is the American elections, focussing on democracy, the economy, LGBTQ rights, and the climate. The deep divisions between the left and the right in the U.S. have reached levels not seen in the last 150 years. This situation impacts the entire world, demonstrating how interconnected our crises are. In these times, it’s essential to recognise that decision-making is at the heart of any crisis.
Three Key Actions
During the COVID-19 pandemic, many of us faced the difficult task of shutting down and ramping up operations amid uncertainty. Such decisions are challenging but necessary. In times of crisis, three key actions are vital:
- Making Tough Decisions: Even when outcomes are uncertain, timely decisions are crucial. Delays can worsen the crisis.
- Boosting Morale: Whether it’s your team members, family, or community, maintaining morale is essential. High spirits help everyone navigate challenges more effectively.
- Reinventing Goals: Crises often render previous goals obsolete. It’s important to reassess and set new, relevant goals.
Leadership: The Trans-Antarctic Expedition
Ernest Shackleton, born in Ireland and raised in England, was a remarkable leader known for his extraordinary endurance. He initially aspired to be first person to reach the South Pole, but this milestone was achieved by Norwegian explorer Roald Amundsen in 1911. Without giving up, Shackleton decided to cross the Antarctic—from coast-to-coast—via the South Pole.
In 1914, Shackleton launched the Imperial Trans-Antarctic Expedition. It is said that he advertised for the expedition with a notice: “Men wanted for hazardous journey. Small wages, bitter cold, long months of complete darkness, constant danger, safe return doubtful. Honour and recognition in case of success.” Despite the description, he attracted a crew of 27 courageous men.
The ship, Endurance, set sail from South Georgia Island in December 1914. By January 1915, it became trapped in ice and eventually sank in November 1915. Shackleton and his crew set up camp on drifting ice floes, surviving on limited rations. He ordered his men to launch the lifeboats to reach the desolate Elephant Island in April 1916.
With no hope of rescue on Elephant Island, Shackleton decided to sail one of the lifeboats, the James Caird, 800 miles to South Georgia. Shackleton and five crew members faced towering waves and freezing temperatures. They landed on the uninhabited side of South Georgia and trekked across uncharted terrain to reach the whaling station at Stromness.
At the whaling station, Shackleton immediately organised a rescue mission for the men on Elephant Island. After multiple failed attempts, he succeeded in August 1916, nearly two years after the expedition began. All 27 crew members survived, a testament to Shackleton’s transformational leadership.
Do we not sometimes feel utterly helpless in the face of life’s challenges? In those moments of crisis, don’t we turn to God, praying for survival, looking for support from anywhere we could find it? Today, people in Gaza, Lebanon, Israel, Iran, Ukraine, Russia, and many other parts of the world are doing the same—praying for survival amidst war and chaos. Crises like these are not new; the world has always faced challenges. What has changed is the scale and complexity of these crises.
Major Crises of the World
I reflected on some of the major crises we face today. One example is the political polarisation and division within nations, such as what we see in the United States. What does it mean for a country to be at odds with itself? The example of the U.S. is significant because it matters for the entire globe. With an economy close to $30 trillion, the decisions made in the U.S. have far-reaching impacts.
Another pressing issue is the ongoing conflicts in the Middle East and Ukraine. These conflicts have been escalating over the past few years. The situation is volatile, and any further escalation could have severe consequences. For business leaders, understanding these dynamics is crucial.
Also, the rise of ungoverned AI is creating synthetic truths and misinformation, polarising societies and negatively impacting economic activities. This polarisation leads to trade barriers and further divides the world.
China’s economic slowdown is another critical issue. Known for its high GDP growth, China’s current slowdown has significant implications for the global economy. Climate change is another urgent crisis. October was the warmest month in India’s history, and such extreme weather events are becoming more frequent. The world remains divided on how to address this issue, leading to inaction.
Lastly, the fight for critical minerals is intensifying. As someone involved in the chemical industry, I see first-hand how countries are competing for these resources, leading to trade wars and further divisions.
Five Categories of Crises
A survey conducted by the World Economic Forum explored interconnected crises and divided them into five categories: economic, environmental, geopolitical, societal, and technological. No crisis in the world is an isolated event.
The societal polarisation is largely driven by misinformation and disinformation propagated by ungoverned AI. This societal polarisation leads to a lack of economic activities, resulting in unemployment, inflation, and economic downturns. These downturns, in turn, prevent adequate investment in infrastructure, CSR activities, and climate actions, leading to further challenges such as chronic diseases and immobilization.
Crises, whether economic, societal, environmental, or technological, are mostly interconnected and borderless. Something happening anywhere in the world will impact us. This is the nature of modern crises and chaos. So, what does that mean for you as a business leader or organisation leader? What actions should you take in response?
WEF’s Perception Survey
A perception survey was conducted by the World Economic Forum, involving around several influential people from civil society, government, and academia worldwide. The survey mapped their perceptions against risk categories, with input from 11,000 to 12,000 participants across more than 100 countries, including India.
The survey reveals that two-thirds of participants identify extreme weather as a significant crisis. Societal and political polarisations, linked with economic activities, and misinformation and disinformation are also top concerns. Climate activities are reaching a point of no return, creating deep crises.
The Indian government has mandated ESG regulations for the top 100 companies, driven by environmental concerns. India has set a net zero target by 2070, following other countries like those in Europe with targets around 2045-2050. Understanding these interconnected crises and their impact is crucial for leadership.
The Spread of Fake Information
In the near term, over the next two years, misinformation and disinformation have been ranked as the number one crisis. In 2024, more than 3.5 billion people worldwide participated in elections to select their leaders. During these election campaigns, and even outside of them, the amount of fake news, synthetic news, and fake facts—often aided by AI technologies like voice cloning—has been staggering. These falsehoods polarise our beliefs, influence our decisions, and ultimately affect the leaders we choose, often based on myths rather than facts.
We all use social media platforms like Twitter, Instagram, and Facebook. Many of the synthetic and fake information circulating on these platforms can be incredibly convincing, slowly instigating certain belief systems within us. This leads us to take specific actions and make decisions based on false information. The youth in India have identified this as the number one problem, and it is a significant issue in many other countries as well.
Indian Economy Highlights
Before COVID-19, from 2010 to 2019, the global GDP growth was 3.1%. After COVID-19, and with the ongoing conflicts in Russia and the Middle East, the world economy has slowed down. 2021 was a year of economic recovery. In 2022, the global GDP growth was 3.2% and in 2023 it was 2.6%. This drop is substantial.
Indian economy presents both great news and some challenges. Let’s start with the positives. India is the fastest-growing economy. By 2027, India’s GDP is projected to be $5 trillion, making it the third largest economy, surpassing Japan and Germany. By 2030, the GDP is expected to reach $7 trillion, assuming a growth rate of 5.8% to 6.5%. However, India will still be third, with China and the US ahead by significant margins.
While India ranks fifth in overall GDP, it ranks 140th in per capita income due to its large population of 1.4 billion people. This disparity highlights the economic inequalities within the country. For instance, in the automotive industry, there are only 45 cars per 1,000 people in India, compared to 900 per 1,000 in the US and around 90 per 1,000 in China. Definitely, this number will go up in India but the question is: are we having the infrastructure to cope with the growth?
Four Ways to Move Ahead
The world today is very fragmented, and the trust between nations is declining despite numerous forums and associations like the European Union, G7, BRICS, and ASEAN. The rise of populism and protectionism contributes to this fragmentation. However, I believe that collaboration will eventually occur, and leaders can play significant roles during crises.
Localised Strategies
Consider the COVID-19 pandemic in 2020, a global crisis. The availability of hospital beds, oxygen cylinders, and medical supplies locally was crucial. Similarly, in times of full-scale war in the Middle East, local strategies become vital. For example, from April 2025, the Indian government has mandated a 20% ethanol blend in petrol, reducing dependency on foreign oil and enhancing local resilience.
Businesses should also develop localised strategies to safeguard against global crises. Dependence on global imports or exports can make companies vulnerable to disruptions. Implementing local strategies can provide some insulation from global economic shocks.
Breakthrough Endeavours
To navigate through crises, leaders must also focus on breakthrough endeavours. These innovative efforts can help organisations adapt and thrive despite uncertainties. For example, embracing new technologies, diversifying supply chains, and investing in sustainable practices can build resilience.
The first industrialisation of fertilisers happened in 1913. It is said that without this innovation, the world population today could be one-third of what it is because there wouldn’t have been enough food to sustain everyone. Currently, the global population is 8.1 billion and is expected to reach 9 billion by 2050. Meanwhile, arable land is decreasing by 1% each year, equivalent to the size of Great Britain, and the water table is dropping by nearly a meter annually.
Where will we get food? Fossil fuels are finite, and a crisis in their availability is inevitable. Breakthrough innovations like the industrialisation of ammonia have played a crucial role in supporting the world’s population. Similarly, the development of COVID-19 vaccines has been significant. These innovations underscore that we all have a role to play—whether in R&D, invention, or even creative problem-solving, like the concept of ‘Jugaad’ in India.
Consider the potential of hydrogen-powered cars. They emit only water droplets, with no pollution. This breakthrough innovation could mitigate climate crises and bolster economic activities. Currently, 70% of India’s power generation is coal-based, but the government has mandates for solar power and hydrogen. Understanding and aligning business or leadership strategy with these future trends is essential.
Collective action is crucial. It’s not just about individual efforts but about everyone contributing. Think about tax compliance: if every individual and business pays their taxes and operates ethically, the collective impact can help us navigate crises more effectively. Collective action is the sum of individual efforts working together to achieve a common goal.
Cross-Border Collaboration
Lastly, cross-border collaboration is vital. In a fragmented world, no country, business, or society can navigate crises alone. Leaders must engage in cross-border coordination to address common challenges. For example, businesses are increasingly scrutinising imports from China, seeking alternatives and forming international partnerships. Governments and leaders play significant roles in facilitating these collaborations.
To lead through crises, it’s essential to translate vision into reality. This involves self-awareness, continuous personal and organisational development, and clear thinking. Leadership is about turning vision into actionable reality, navigating transactions, crises, functional challenges, and more.
Let me discuss two concepts: social loafing and the framing effect.
Social Loafing
In 1913, French engineer Max Ringelmann conducted an experiment with horses. He observed that one horse pulling a coach gave 100% effort. However, when he added a second horse and increased the weight proportionally, the combined effort of both horses was less than 100%. Adding more horses continued to decrease individual effort. This phenomenon is known as social loafing. This is also evident in team activities like rowing competitions, where despite getting trained to give 100%, individual effort often falls short.
When individual performance is not recognised, people do not give their full effort. To counteract social loafing in organisation, especially during crises, you must reward and recognise individual performance and set clear expectations.
The Framing Effect
The framing effect is a cognitive bias where people decide based on how information is presented, rather than on the information itself. For example, news channels may report the same story differently. BBC and Al Jazeera present different perspectives on the same event and similarly, two Indian TV channels offer different narratives on the same topic. An everyday example is food labelling: 99% fat-free vs. 1% fat. Both statements are identical, but people are more likely to choose the 99% fat-free option.
Leaders often use framing to influence perception and decision-making. Be aware of how information is framed in your organisation. Present information positively and be transparent.It’s crucial to not only focus on what is said but also pay attention to what is not said.
Action Bias
During penalty shootouts, statistics show that penalty kicks are equally likely to go left, right, or straight. However, goalkeepers often jump to the left or right rather than staying still, even though standing still could be equally effective. This is action bias, where individuals feel compelled to act even when inaction might be just as effective.
In organisations, this bias can manifest when employees attend meetings without actively participating, merely to show they are doing something. It’s important to distinguish between actions that genuinely add value and those that are taken just for the sake of appearing active. In crisis or normal conditions, focus on making data-driven decisions that matter, rather than simply showing action.
There’s a popular saying: “You are the average of the five people you spend the most time with.” This emphasises the importance of your social network. Surround yourself with inspiring and successful individuals. More importantly, ensure that not only do you know influential people, but they also know you. Building a robust social network is the key to personal and professional success.
Q&A
Q: How important is collaboration with government or competitors or other industries during a global crisis?
A: Collaboration is important, but it must be approached carefully. When collaborating with competitors, it’s essential to focus on areas where cooperation is beneficial and aligns with policy-making, while avoiding conflicts of interest.
One relevant example is the hydrogen roadmap in India. The government launched this roadmap, allocating significant funds and outlining a 10-year plan for hydrogen development. However, the government alone cannot fully understand and manage the entire hydrogen value chain. For instance, transporting hydrogen requires carbon fibre tanks, which are a critical and expensive component.
Reliance Industries stepped in and volunteered to collaborate with the government, helping to develop policies for local carbon fibre production in India. Such collaboration is crucial for the success of the hydrogen roadmap.
Q: What have been your learnings from your industry dealing with disruptions?
A: In 2019, I was responsible for BASF’s operations in South Asia, overseeing large plants. Shutting down the plant and halting all activities was a tough decision, especially with running costs of 10 to 20 crore every month without any production or sales. However, in times of crisis and uncertainty, it’s crucial to make decisions promptly, even if they might not be perfect. One key learning is to avoid procrastination. Delaying decisions can exacerbate the crisis. It’s better to take immediate action and correct course if needed, rather than waiting and allowing the situation to worsen.
Q: Leading through chaos or in normal times demands visionary political leadership and governance. Globally, there is a dearth of political leadership. How do we fix it?
A: It’s true that visionary political leadership is crucial, especially in times of chaos. The rise of populism has contributed to societal fragmentation. According to Maslow’s hierarchy of needs, once basic needs like safety, security, food, and shelter are met, people strive for growth and a psychologically safe environment.
Leadership is contextual and evolves over time. For example, in Bangladesh, there was a significant political shift recently. The previous government led by Sheikh Hasina was replaced by an interim government, and many people are pleased with this change. Leadership effectiveness can be subjective; what works for one group may not work for another. We need to focus on nurturing leaders who understand the cultural and societal contexts they operate in. This involves fostering environments that encourage growth, psychological safety, and adaptability.
Q: What methods or framework do you rely on when making critical decisions under immense pressure, and how do you maintain clarity in such situations?
A: I wish there was a single method for making critical decisions under pressure, but the reality is more complex. Leadership has evolved over time. In the past, leadership was often seen as a one-man show, but over the years, it has transitioned to more of an empowerment model. Recently, transformational leadership has become prominent, adapting to situational demands.
When making decisions, it’s essential to embrace the uncertainty and make the best possible choice with the available information. Clarity in decision-making comes through effective communication. Especially in a crisis, over-communication is crucial. Ensuring that all stakeholders are well-informed, repeating key messages, and maintaining transparency are vital for clarity and trust.
Q: From your experience leading diverse teams across multiple geographies, what cultural or regional factors do you consider when leading through a crisis?
A: I have led teams across various geographies, including India, Bangladesh, South Asia, Thailand, Indonesia, Malaysia, Vietnam, Cambodia, Japan, and Korea. There is always a cultural context to consider.
When I was posted in Singapore, leading a function for the entire Asia-Pacific region around 2007 or 2008, I encountered significant challenges. I failed 70 to 80% of the time. However, this experience taught me invaluable lessons about leading teams: the strategies effective in one country might not work in another. What works in India or Thailand may not necessarily work in Japan. The societal needs, beliefs, and the time it takes to build trust vary significantly across regions. Patience and cultural understanding are crucial. If you don’t understand the cultural nuances of a specific geography, your efforts to lead effectively will likely fall short. Adapting your approach to suit the local context is essential for success.
Q: Indians are believed to be brilliant individually but not effective in a group. The Japanese are said to be effective in a group but not brilliant individually. Please give your views.
A: I’m not very familiar with these generalisations. The effectiveness of individuals and groups can often be influenced by cultural factors. One notable difference between Japanese and Indian cultures is their approach to processes and planning. Japan, as a country and organisation, is very process-driven. They tend to spend a significant amount of time on planning—perhaps 70%—and 30% on execution. This meticulous planning ensures precision and efficiency. On the other hand, in India, we often adopt a more flexible and adaptive approach, sometimes referred to as “Jugaad,” where we might spend less time on planning and more on improvisation and problem-solving as we go. Both approaches have their strengths and can be effective in different contexts. It’s not necessarily about one being better than the other but about understanding how these cultural traits influence group dynamics and individual effectiveness.
Q: Can you share an example where a global crisis led BASF to innovate or rethink its business strategy in a way that created new opportunities?
A: There are many examples. One notable instance is the industrialisation of ammonia production, pioneered by the Haber-Bosch process, developed by two scientists who later received the Nobel Prize for their work. This was a significant innovation by BASF. Our company is renowned for its innovative spirit, filing roughly 900 to 1000 patents each year. BASF has three major research centres worldwide—in Germany, Shanghai, and Mumbai—dedicated to inventing solutions for global challenges. These centres enable us to continually innovate and create new opportunities, even in the face of global crises.
Q: How can we identify the better and right perspective when ‘framing effect’ is in play?
A: It’s crucial to understand the data and the statistical context. Every piece of information, whether from a family member, a political leader, or an organisation, is likely to be influenced by the framing effect. As humans, we naturally present information in a way that benefits us or our affiliations.
To combat this, you should:
- Deepen Your Understanding: Learn more about the topic at hand and understand the underlying statistics.
- Seek Multiple Sources: Don’t take any information at face value. Validate it by consulting various sources.
- Critical Thinking: Approach information critically, questioning its validity and the potential biases.
By doing so, you can better navigate through the framing effect and gain a more accurate perspective.
