Yellow-Light Leadership: How the World’s Best Companies Manage Uncertainty

“our research finds that the CEOs whose companies are best weathering the recent downturn are practicing old-fashioned, pragmatic management by the numbers – what we call yellow-light leadership. This conclusion is based on an onging Booz Allen Hamilton study of about 40 Fortune 500 companies, conducted with the Center for Effective Organizations at the University of Southern California and initiated in 2001.

This finding is significant because it casts doubt on the conventional wisdom that says there are only two models of leadership. One is visionary, or ‘green-light,’ leadership, appropriate to periods of economic growth. The other is crisis, or ‘red-light,’ leadership, best applied when companies, industries, and economies are tumbling. Our ongoing research suggests that while there is value in both the green-light and red-light models, neither extreme is effective in times of uncertainty.”

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