When Nobody Steps Up: The Leadership Vacuum That Turned a Crisis Into a Catastrophe
The greatest danger in any crisis isn’t the crisis itself — it’s the silence where leadership should be.
Every leader will face a moment when the ground shifts beneath them. The market turns. A key client walks. The team fractures. The product fails. In those moments, the instinct to pause, to gather more data, to wait for clarity, to let the storm pass, feels rational. It feels responsible.
But here’s the truth: that pause is often the most dangerous decision a leader can make. Not because action always saves you, but because the absence of leadership in a crisis creates a vacuum. And vacuums get filled by panic, politics, and self-preservation. I’ve seen it happen in startups. I’ve seen it happen in boardrooms. And nearly a century ago, the entire American financial system watched it happen in real time.
Andrew Ross Sorkin’s 1929, a deeply researched account of the greatest crash in Wall Street history, is, on its surface, a book about markets. But underneath the ticker tape and the margin calls, it’s really a story about what happens when the people who are supposed to lead simply don’t. And the lessons it offers are as relevant to a ten-person team as they are to an entire economy.
The Anatomy of a Leadership Vacuum
In the months leading up to the 1929 crash, warning signs were everywhere. The Federal Reserve was internally divided about whether to intervene in a market that was clearly overheated. Paul Warburg, one of the architects of the Fed itself, had been sounding alarms for months. The economist Roger Babson publicly predicted a crash. But these voices were drowned out. Not by counter-arguments, but by silence from the people who mattered most.
President Herbert Hoover considered the growing market mania a “purely psychological” phenomenon and saw no reason to make public statements about it. Secretary of the Treasury Andrew Mellon believed the panic, when it finally came, was a necessary correction, a healthy purge that would strengthen the economy. Richard Whitney, head of the New York Stock Exchange, brushed off concerns from the White House itself, demanding proof of wrongdoing before he’d lift a finger. The Federal Reserve Board in Washington and the Federal Reserve Bank of New York couldn’t agree on basic policy, each waiting for the other to act first.
Think about that for a moment. The president, the treasury secretary, the head of the stock exchange, and the central bank. Every institution that had the authority and the responsibility to lead chose, for different reasons, to do nothing. Each had a justification. Each believed their inaction was the prudent course. And collectively, their restraint turned a painful correction into the most devastating economic catastrophe in American history.
The Comfort of Waiting for Certainty
The trap these leaders fell into is one I see constantly in business, and it’s worth naming directly: the belief that waiting for more information is always the safer bet.
Hoover wanted certainty that the stock market’s troubles would spill into the real economy before he’d act. But by the time that certainty arrived, by the time the Dow had fallen 25 percent and banks were beginning to wobble, the window for decisive action had largely closed. He’d waited for the diagnosis to be undeniable, and by then the patient was already on the table.
Mellon, meanwhile, had an entirely different justification for inaction. He wasn’t uncertain. He was ideologically committed to non-intervention. He believed markets should be allowed to punish excess, that the panic would “purge the rottenness out of the system.” It’s a position that sounds principled in a textbook and looks catastrophic when millions of people lose their savings.
And Whitney at the Exchange? His motivation was the simplest and perhaps the most common: self-interest dressed up as conviction. Any admission that the market had structural problems would threaten the very institution he ran. So he dismissed concerns, deflected responsibility, and waited for someone else to take the risk of acting first.
These aren’t exotic failure modes. They show up in organizations of every size, every day. The CEO who won’t address a toxic executive because the numbers are still strong. The board that tables a strategic pivot because they need “one more quarter of data.” The founder who knows the business model is broken but keeps pushing because admitting it means admitting a mistake. The reasons vary. The result is the same: a vacuum forms, and the people who depend on leadership are left to fend for themselves.
The Contrast: What Decisive Leadership Looks Like
Sorkin’s book offers a powerful counterpoint to the paralysis of 1929, and it comes from an unexpected place: the Panic of 1907.
When the banking system nearly collapsed two decades earlier, J.P. Morgan Sr. was attending a church conference in Virginia. When the crisis hit, he attached his private railcar to a steam engine and rushed back to Manhattan. On a Saturday evening, after more than two dozen bank failures, he gathered the titans of the financial world at his home, locked them in his library, and refused to let them leave until they’d committed to a plan. Morgan played solitaire in the next room while the bankers argued, and by morning, they had drawn a line. They decided which institutions would be saved and which would be allowed to fail.
Was it perfect? No. Was it fair? Debatable. But Morgan understood something that every leader needs to understand: in a crisis, imperfect action beats perfect paralysis. He didn’t wait for consensus. He didn’t wait for government intervention. He made a call, took responsibility for it, and moved.
By 1929, Morgan was dead and there was no one with the will or the authority to play that role. Thomas Lamont, Morgan’s successor at J.P. Morgan & Co., tried to organize a bankers’ pool to stabilize the market on Black Thursday. He gathered the heads of the five largest banks, and they committed $120 million to buy shares in thirty-seven of the most battered stocks. It worked. Briefly. The market rallied for a few hours. Mitchell walked out of the meeting projecting confidence, and the crowd on Wall Street breathed a collective sigh of relief.
But the gesture was too little, too late, and everyone involved knew it. Bernard Baruch, one of the most prominent investors of the era, declined to participate entirely. The era when a single firm could rally the entire market through sheer force of will was over. And nobody had built anything to replace it.
What This Means for Your Team
You don’t have to be running a bank or a government to learn from 1929. The dynamics of a leadership vacuum scale down perfectly to the organizations most of us actually lead. Here’s what I’ve taken from this story and applied in my own work:
First, silence is a message. When a crisis hits and leadership goes quiet, people don’t assume you’re thinking. They assume you’re scared. Or worse, they assume you don’t care. I learned this the hard way in my BodeTree days. There were moments when I thought holding back and “letting things settle” was the mature response. It wasn’t. My silence created space for speculation, anxiety, and the worst kind of office politics: the kind born from fear. Your team doesn’t need you to have all the answers. They need to know you see the problem and you’re engaging with it. That alone changes the dynamic.
Second, beware the ideology of inaction. Mellon’s “let it purge” philosophy sounds like a principled stance. But in practice, it was an excuse to do nothing while people suffered. I see versions of this in business all the time. The leader who insists the market will “correct itself.” The manager who refuses to intervene in a team conflict because “adults should work it out.” The executive who won’t cut a failing product line because it “just needs more time.” Sometimes the principled thing isn’t to stand firm. It’s to act, even when the action is uncomfortable.
Third, self-interest is the enemy of crisis leadership. Whitney couldn’t address the structural problems of the stock exchange because doing so would have threatened his own position. This is perhaps the most insidious form of the leadership vacuum: when the person in charge has a personal incentive to maintain the status quo, even as the status quo is collapsing. If you’re a leader, you need to regularly ask yourself: Am I protecting the organization, or am I protecting myself? The honest answer isn’t always comfortable, but it’s always necessary.
Fourth, don’t wait for the perfect plan. Commit to a direction. Morgan in 1907 didn’t have a perfect plan. He had a decision and the willingness to own it. Lamont in 1929 tried to replicate that approach, but he was too late and lacked the authority to follow through. The lesson isn’t that every bold move works. It’s that the cost of inaction in a crisis almost always exceeds the cost of imperfect action. A team that’s moving in a direction, even if it’s not the optimal direction, can adjust. A team that’s frozen can’t.
Fifth, build the capacity for crisis leadership before the crisis arrives. One of the most important themes in Sorkin’s book is that by 1929, the institutional infrastructure for crisis leadership didn’t exist. Morgan had been a singular figure, and when he died, nothing replaced him. The Federal Reserve was supposed to fill that role but was too fragmented and too young to do so. By the time Roosevelt finally stepped in, closing every bank in America on his first day in office and asserting unprecedented federal authority, years of damage had already been done. The parallel for leaders today is this: don’t wait for a crisis to figure out your decision-making framework, your communication plan, or your chain of command. Those structures need to exist before you need them.
The Real Lesson
The story of 1929 isn’t really about stocks or banks or monetary policy. It’s about what happens when the people who have the authority to lead choose, for reasons that seem perfectly rational in the moment, not to.
Hoover waited for certainty. Mellon waited for the market to heal itself. Whitney waited for someone else to take the risk. The Fed waited for internal consensus. And while they all waited, the crisis metastasized from a market correction into a generational catastrophe that reshaped the American economy and the role of government for decades to come.
Whether we lead companies, teams, or even just ourselves, we face smaller versions of this choice all the time. The crisis doesn’t have to be a stock market crash. It can be a product launch that’s failing, a culture that’s eroding, a strategic bet that’s clearly wrong, or a team member who’s undermining trust. The question is always the same: will you step into the uncertainty and lead, or will you wait for conditions that may never arrive?
The leaders I admire most aren’t the ones who had the best information or the most resources. They’re the ones I try to emulate as I lead B:Side, and the ones I teach my students about at ASU. They understood that in a crisis, the act of leading is itself the most important thing. Not because the leader is always right, but because the alternative, a vacuum where leadership should be, is almost always worse.
The greatest danger isn’t making the wrong call. It’s making no call at all.