Diplomacy and Leadership In a Turbulent World
"Leaders in Dubai" 2008 Business Forum
In diplomacy today, we are concerned with conflict, insecurity and inequity. In business, the focus is currently on recession, volatility and the credit crunch. Yet if we take a closer look, the challenges we face and the leadership we need in both fields are not dissimilar. We have more to learn from one another than we think. The world has grown smaller. Information is exchanged in real time and there is so much of it that it threatens to overwhelm us. But unfortunately, wisdom does not travel at quite the same speed as information. All of us need more than ever to take time to reflect - and yet time seems to be the one commodity in short supply.
Leadership in business and diplomacy requires the same qualities. You need to be able to analyse information, assess risk, seize opportunities and balance short-term and long-term priorities. Witness the interesting contrast at the moment between the flight to cash by ordinary investors, panicked by the short-term stock market outlook, and the steady buying of shares by Warren Buffett, who sees good long-term value. You also need to create a suitable working environment and understand the underlying fundamentals of your business. Above all, a good grasp of human psychology is vital. An honest appreciation of your own strengths and weaknesses and an openness to change are invaluable. Good leaders also need to know how to choose a strong team and have the maturity and self-confidence to listen to them. That is a tall order in just one lifetime.
But so much for theory. In the next few minutes, I will discuss some ideas on how we can best navigate our way through these uncertain times, drawing on some of my own experiences heading an organization that has been very much in the public eye for the last 10 years.
Let me start with the importance of building bridges.
In order to engage, you have to be able to reach out to your partners and your adversaries. That means taking the time to understand where they are coming from and treating them with the necessary respect. It means looking for the values that unite us and the common interests we share. Basic values such as honesty, decency and hard work are common to all cultures. Human beings do not always live up to these values, but there is no culture in which dishonesty, cruelty or laziness are celebrated. "Greed is good," said the fictional character GordonGekko in the movie Wall Street. How wrong he was - as has been proven by the current global financial and economic crisis. Behind all the complex explanations of this crisis, including the lack of adequate regulation, lies simple human greed, which, if unchecked, can easily triumph over prudence and basic human decency.
I mention this to illustrate the point that, while the single-minded pursuit of self-interest may seem to work in the short term, it never does in the long term. We live in a globalized world and face problems that require global solutions. We need to work together and engage in sustained dialogue. Here in the Middle East, for example, the Arab-Israeli conflict has festered for generations, not least because of a failure to engage in sustained, meaningful dialogue and to build bridges between the parties, as well as a failure to agree on solutions rooted in fairness and justice. The result is a Middle East in greater turmoil than at any time in recent history.
But recent history also gives us reasons for hope that bridges can be built to overcome centuries of hatred and mistrust. Take Europe. After two horrific world wars, far-sighted statesmen began a process of reconciliation that led to today´s European Union. War between historic rivals like Germany and France is now unthinkable. It took decades to build the confidence and trust. But it happened, to the benefit of everyone. In Northern Ireland, former enemies are now sharing power in a democratically elected government and more than 30 years of bloodshed have come to an end.
No lasting solution to any problem is ever achieved without bridge-building - without all parties reaching out to one another across what may initially appear to be an unbridgeable divide. Festering wounds do not heal by themselves. The earlier dialogue is initiated, the more likely a solution will be found. We will not see a Middle East at peace with itself until there is sustained dialogue between Israelis and Palestinians, between the different factions in Iraq, and between Iran and the United States. It will be messy and frustrating. But make no mistake - no durable solution to any of these problems will come about unless all parties feel that it is based on fairness and equity.
The Public Eye
Leaders in every field live to varying degrees in the public eye. I am quite familiar with the highs and lows of public perceptions and with the vagaries of media coverage. Sometimes, you are portrayed as a hero; at other times, as a zero. The reality, however, is that you are a fallible human being trying to do your best in circumstances not of your own choosing. I have been painted by some as an agent of the West and by others as a partisan defender of Arab and Muslim interests. Clearly, I cannot be both at the same time. The fact that the IAEA and I are attacked from both ends of the spectrum suggests that maybe we are doing our job impartially and professionally.
The key to effectiveness in any such role is the ability to be objective. A leader´s only agenda should be the pursuit of the common good. A leader needs to be a unifier, not a divider. You need to rise above the human proclivity to be subjective and be capable of helping, in an impartial manner, to move parties with different interests towards a common goal. But being impartial does not mean being neutral. You must always side with the facts, with the law and with what is right. However, you should remember that any satisfaction over successes is likely to be tempered by the realization of just how much more is needed.
Three years ago, I was in Ghana for the handover of the country´s second radiotherapy machine. Just think of it: two X-ray machines for 23 million people. This machine will provide potentially life-saving diagnosis and treatment for many thousands of cancer patients. It naturally gave me joy to have played a part in bringing real hope to people in need. But the joy was mixed with sadness because I knew that so many more people would not be given the chance of a new lease on life. In Austria, where I live, there is one radiotherapy machine for around 270,000 people. In Africa, the ratio is roughly one machine for every 10 million people. This gives you a sense of the enormity of the task we face.
As the head of the IAEA, I have a responsibility to our Member States - our stakeholders - to spend their taxpayers´ money effectively and efficiently. Sometimes, those shareholders expect dividends out of proportion to the investments they are willing to make. In other words, they expect us to fulfil the responsibilities they have given us, without providing us with the corresponding legal authority, or the resources and the technology we need. In these circumstances, it is the duty of the chief executive to tell it like it is. Shareholders must be told what they need to hear, not what they want to hear. That is not always an enviable position to be in. But honesty must always take precedence over encouraging false expectations.
For both business and public institutions such as ours, understanding and support from society at large are vital. Companies know that a long-established reputation for quality and reliability can vanish very quickly if, for example, a product suddenly turns out to be unsafe. Likewise, we at the IAEA must be able to demonstrate always that our conclusions - for example on whether a State´s nuclear programme is exclusively peaceful or not - are based entirely on factual data and objective criteria, not on any political motivation. We must report unvarnished what we see. The temptation to take shortcuts or to accommodate certain political agendas must always be resisted.
Governments, like shareholders, have varying and often conflicting expectations about the results they want from those they have entrusted with the management of their assets. Here, again, certain common rules apply. Organizations need to be rule-based, driven by due process and not by the whims of those in charge. Paradoxically, the more a chief executive is seen to play strictly by the rules and to act in the interests of the whole organization, the more credibility and authority he will have. The CEO should never forget that he serves his stakeholders and that it is they who will make the strategic decisions. However, he should at all times give them his best advice.
I have occasionally been criticized by some for allegedly delving into policy matters and speaking outside my "box." My response is always that it is my duty to give the stakeholders - the IAEA Member States - my best advice, based on information available to me and my assessment of it. Unsurprisingly, my advice is sometimes hailed as wise and prudent when it suits some interests, and dismissed as detrimental when it does not. I continue to believe, nonetheless, that my job is to make sure the stakeholders have all the facts and policy implications before them when they make a decision.
An intrinsic part of being a leader, therefore, includes being candid and transparent, presenting the facts without overstating or understating the case and always keeping an eye on the big picture. That sounds easy. At times, however, the pressure from powerful stakeholders to deliver the message they want to hear, rather than the one justified by the facts, can be intense. In January 2003, I told the UN Security Council that we had found no evidence that Iraq had revived its nuclear weapons programme and asked for a few more months to complete our investigations. I said: "These few months would be a valuable investment in peace because they could help us avoid a war." Unfortunately, my urging went unheard and war was launched. The fact that the IAEA was ultimately proved right in its assessment is no consolation when weighed against the tragic loss of life and immense human suffering caused by that conflict. Equally tragic is the fact that the whole region has become less stable and more violent as a result.
Similarly, there was tremendous pressure on the Agency in 2003 to declare that Iran had an ongoing nuclear weapons programme, a conclusion that was not supported by the facts as established by our inspectors. We had to dig in our heels until eventually, in 2007, the U.S. National Intelligence Estimate essentially agreed with our assessment. I like to believe that our stand may have helped to prevent yet another conflagration in the region, which would have had disastrous consequences.
Explaining highly technical issues can be difficult, whether it is Hank Paulson or Ben Bernanke talking about the credit crunch and bank recapitalization or the IAEA going into the details of Iran´s nuclear programme. You need to frame your message in terms of your clients´ concerns and in a way which they will understand. At times, depending on how you present your message, you can either create panic - such as we are now seeing on financial markets - or restore confidence. But the message must always be justified by the facts. A leader should diagnose the problem and offer possible solutions, whether for the short or long term.
In managing conflicts between nations, rule number one must be to engage in dialogue. Engaging does not mean appeasement or rewarding bad behaviour. On the contrary - it is a sign of confidence and strength. It does not mean agreeing with your adversaries or giving in to them. It does mean being prepared to hammer out a hard bargain that meets enough of your concerns and their concerns to make the resulting agreement worth having. You do not have to take anything on trust. But you do have to talk. It has been said many times that the way to make peace is to talk to your enemies, not your friends.
Albert Einstein is credited with saying that insanity is "doing the same thing over and over again and expecting different results." That sentiment should certainly guide us when we try to learn lessons from our experience. We must be willing to take a long hard look at what works and what doesn´t and be willing to change our behaviour.
The key lesson to be learned from history is surely that force does not solve problems. Far from healing old wounds, it opens fresh ones. As the British historian Arnold Toynbee once said: "War is the price paid for failed diplomacy."
A second lesson is that trying to isolate countries with which you have a disagreement leads to deeper entrenchment and empowers hardliners. That leaves us with the often tedious business of diplomacy and negotiation. For diplomacy to succeed, we need to understand that the core values we live by as an international community have become skewed and that it is imperative to restore our moral compass. We need to remember that we are one human family and that all human beings have a right to live in dignity and peace, free from war and free from want, under a global security system rooted in fairness and equity. These are not empty platitudes. If we cannot secure the well-being of the 1.4 billion who live on less than $1.25 per day, and if we do not act to guarantee that the sanctity of human life is valued as highly in Darfur, Congo and Iraq as in Chicago or Stockholm, we will not have peace or security. We must always bear in mind that all drivers of insecurity are intrinsically linked and that insecurity anywhere can easily turn into insecurity everywhere.
To come back to our distorted values. Here in the Middle East, these are reflected in poverty, repression, poor governance and violence. The lack of a comprehensive peace in the region, Israel´s absence from the nuclear non-proliferation regime and the lack of an overall security infrastructure are added factors for instability and catalysts for radicalization. In some quarters, we hear repugnant terms like "Islamofascism" which suggest that all Muslims support terrorism, when the reality is that a small minority of extremists hold a distorted black-and-white view of the world and wrap themselves in the mantle of a great religion as a cover for their heinous crimes. Terms like these are not going to help us build bridges or achieve peace. It is also disconcerting that a U.S. presidential candidate´s fitness for office was questioned by some because of his father´s Muslim faith. It is a tribute to the American people that Barack Obama won - and won big.
Restoring a moral compass and revisiting fundamentals are also now imperative in the business world. We need to recalibrate our regulatory systems to find a more appropriate balance between the role of governments and markets, we need to pay more attention to social and not just economic development, and we need more focus on the real economy, not just the financial sector. It is vital that future financial models should be sustainable socially and environmentally as well as economically.
As I mentioned earlier, the major problems facing the world - whether the current financial crisis, poverty, HIV-AIDS, climate change or arms control - are global problems that require global and collective solutions. Just as the financial crisis is forcing us to re-examine our assumptions about the economy, we also need to re-examine the fundamentals of our collective security. We should work for a system which ensures the security of all and where no country feels the need to be protected by nuclear weapons or other weapons of mass destruction. The financial crisis has - I hope - instilled a degree of humility by making it abundantly clear that, no matter how powerful we are, it is only by acting together that we can overcome the challenges we face.
Let me conclude by returning to the basic theme of this conference - leadership. It is not easy to define leadership, but you know it when you see it. Leadership is about action, not rhetoric. It is about having a clear vision in uncertain times. It is about practising what you preach and leading by example. It is about integrity and courage. It is about sharing credit for success and accepting responsibility for failure.
Leadership is about being willing to acknowledge mistakes and move on. It is about appreciating that you are privileged for a few short years to contribute to the public good. More than anything else, it is leadership that will determine the kind of world we will leave to our children.