O = E + R
where E denotes events, R denotes response, and O denotes outcome.
The idea behind this formula is that while a firm cannot influence events, it can choose how to respond in order to achieve a goal. This formula also indicates that E = O does not exist, which is why groups who believe events determine the outcome choose to respond with a null.
Returning to the formula, the position of the leader is expressed as follows:
‘E + L’ equals ‘O’
Where L indicates the leader’s activity in altering the company’s response to the incident and, as a result, altering the outcome. That explains why, when faced with the identical scenario, firms with good leaders outperform those without.