Lehman Brothers had one of the strongest cultures of collaboration on Wall Street, right up until its collapse. This was deliberate on the part of Dick Fuld, who took over when American Express spun off the firm in 1994. The bank was getting a second chance after its previous implosion, when AmEx acquired the firm in the first place, because the partners couldn't agree on a direction for the firm. Fuld set out to build a culture where partners would be agreeable and loyal, to the point they would enact Fuld's vision together, embracing it as their own.

In the end, it seems that Lehman's management team became too agreeable — and too loyal, content to follow even when they knew better. In the months and years leading up to the most recent financial crisis, dissent wasn't an option even for those insiders who had seen a trunk or a tusk (looming distress signals) but were afraid or insufficiently informed to identify the elephant in the room. In Fuld's view, you were with him or against him, and nobody wanted to be against him. Of course, if you were with him, and if you made it into the top ranks, he took care of you, and you and your family became very wealthy.

To be fair, all of the banks behaved irresponsibly; virtually every risk management team and board of directors across Wall Street couldn't or wouldn't speak up forcefully enough to change the disastrous course of events. (Regular citizens, too, lost their minds.) But Lehman's fall was a particularly high-stakes flop.

The problem is that a lack of discord looks like harmony, even happiness, which in turn suppresses constructive conflict further. And note that research from consultancy eePulse, which counsels companies on how to improve employee satisfaction, shows that the single greatest predictor of poor performance in a business group is a happy workforce. Energy levels are just too low.

Management teams might take pride in a smoothly-run machine, only to end up blindsided when reality doesn't mesh with their harmonious view of events. The challenge is finding a level of discord that raises legitimate concerns, without overwhelming workers.

Brain research backs this up. Dr. Paul Rosch, president of the American Institute of Stress, has demonstrated that individual performance improves as stress increases — but only to a point. Past that point, performance declines precipitously, and if subjected to distress for extended periods of time, people get sick. But within an acceptable range of competition and tension, more of the brain is firing, more pathways are stimulated, and more creative centers are engaged.

Good leaders know how to identify the right range of competition and tension. But too many still put their energies into wrongheaded fights, or choose the right battles and then go about it all wrong. One example of a wrong fight, fought wrong: GM continued to push gas guzzlers despite obvious shifts in the market; its hierarchical structure was incapable of change. (Something Peter Drucker predicted decades ago.) A right fight fought wrong — Carly Fiorina pushing the Compaq deal while at HP.

For a classic example of a right fight, fought right, look at the process Jack Welch conducted in identifying his successor. Each of the three finalists — Bob Nardelli, Jim McNerney, and Jeff Immelt — was impressive in his own right, making it a truly difficult choice. So Welch launched a competition among the three men in which each would lead a major cross-company initiative and train his own replacement, while at the same time continuing to run his own show. He declared that there would be no dirty politics. Inevitably, tensions rose from the executive suite on down, but it was an open and clean fight, playing out over six months, complete with new alliances, speculation, and angling for position.

Was it a fair fight? Not necessarily to the three men, who had different strengths and weaknesses, and only one would come out on top (though the other two quickly got other offers). But in the real world of business, there are winners and losers. It's not fair; it's just life. Was it a good use of company resources? Definitely. GE needed the best possible successor to Welch — and the company got terrific work out of the three as they competed for the job. Was there a better way to do it? I'd argue that GE's approach was more efficient and a better predictor of success than the traditional exhaustive round of interviews.

In short, Welch started a right fight about succession. He consciously raised tensions and he created rules of the game to mitigate the consequences of those tensions. It was a high-stakes decision, worth a right fight.

The concept of constructive conflict is not a new one. Nor is complacency a new problem. The Titanic crew was so confident that the ship was unsinkable and the operation so smoothly run, the team ignored danger signs. But especially now, when we are facing unprecedented change, too many leaders instinctively seek alignment as an end in itself, rather than as a precondition for the real work of leadership — which is to use all of our capacity, including healthy conflict and competition, to create winning, sustainable results. If only the leadership and Board of Directors at Lehman's (or elsewhere on Wall Street, for that matter) had had the guts to rock the boat.

Saj-Nicole Joni is the founder and CEO of Cambridge International Group Ltd.

This may be hard for anyone below 40 to fathom, but companies didn't always fire people to save money. IBM was famous for "full-time employment," but then its first layoffs in the early 90s changed the game forever. Over the last 20 years it has become (supposedly) good management practice to slash people costs — remember the famous cutters like "Chainsaw" Al Dunlop? A company's stock price rose whenever it announced cuts.

But as we face a carbon-constrained future with volatile, rising energy and commodity prices, companies will soon realize that they're often "fatter" in energy and resource waste than in human capital.

I wish things were different today than in Dunlop's time, but when this downturn began, companies raced to cut people ahead of the coming decline in sales and profits. It didn't seem to occur to anyone that layoffs would accelerate the recession as fired employees — also known as consumers — had no money to spend. As we enter what seems to be a jobless recovery, it's past time for us to realize that layoffs are not always the right answer.

I can't say with a straight face that saving energy will eliminate the need for all layoffs. If your sales drop by 50 percent, which has happened to some automakers, you can't afford to keep everyone on the payroll. But layoffs can also cost fundamentally sound companies more than they save. On the heels of the early 2000s recession, Bain & Company conducted a study on the true costs of firing people. Their conclusion: if you refill a job within six to eighteen months, you lose money on the deal. The drag on savings, they said, includes "severance packages, temporary declines in productivity or quality, and rehiring and retraining costs that more than offset the short-term wage savings."

More recently, Fortune reporter Geoff Colvin laid out all the costs of layoffs, which, he points out, companies mistakenly equate with only severance costs. Colvin included brand equity costs, leadership costs, Wall Street costs, rehiring costs, and my personal favorite, morale costs.

To stay strong in tight times, to find opportunities to cut costs in smart ways, and to innovate your way to the future, you'll need everyone on board. So undermining morale may not be a great idea right now. You'll also need people with deep knowledge of the business — and mass layoffs ensure that you lose critical perspectives and information. In many cases, there's another way (or two). Some companies, for example, have been paying everyone a bit less rather than resorting to layoffs.

Others are turning to the task of getting lean and getting creative.

Instead of getting rid of people with solid knowledge of the business, consider moving people to the task of green innovation, both to control costs and to create new products. Draft some under-utilized employees into the task of figuring out customer green needs and rethinking products and services to fill those needs. Move others to focus on operations and finding ways to cut back and save money.

In another recent Fortune article, strategy guru Ram Charan reported that Nalco, a water-treatment and environmental services company, chose a path more along these lines. The company moved a group from one declining part of the business and set them to work on pollution control. And the CEO of a mid-sized consumer products company told me that his IT department had so effectively cut energy costs, it had saved about 15% of the department's cost, or the equivalent of one of the seven employees.

The companies that find a way to conserve cash and keep people engaged and employed will rebound the fastest when the economy turns around. So instead of relying mainly on layoffs to save money, look for resource efficiency opportunities, particularly in how you use energy.

Tom Pincince, the founder of an eco-lighting start-up Digital Lumens, put it to me this way: "I'd rather fire a kilowatt than fire a person."

Intuit just bought Mint.com for $170,000,000. Mint is a web- and phone-based tool with a simple design interface that helps people manage their finances in an integrated way — across all their credit cards and asset accounts. According to the New York Times, they have tracked over $200,000,000,000 in spending and have 1.5 million users, meaning that Intuit is paying over $100 per user.

Why did the company that made its mark with a simple user interface (the very name "Intuit" is a riff on "intuitive") have to buy Mint? Why couldn't they have built it themselves? I've been pondering that question with my colleague, Paul D'Alessandro, and we think it's because it is very hard for a complex organization to build something simple. It is the natural tendency of all firms, product lines, governments and even households to build up too much complexity — complexity that adds little value. As my friend Jim Rogers noted, "Organizations are like households — they tend to fill the attic and basement with too much stuff, and it takes discipline to remove it."

From a human standpoint, it is easier for executives to say "yes" to a new product or feature than to say "no." It takes even more work to kill an existing service or offering. Even Scott Cook, the legendary CEO of Intuit, could not pull it off; and the odd are good that your firm has this problem, too.

So what? Well, the customer suffers. We know from our work in Behavioral Economics that too much clutter and too many choices can freeze customer decision-making. Too much muchness is not enticing. Instead, it causes the customer to feel overwhelmed and walk away. We have simplified decision-making processes with a number of clients — not just the choice model but the total experience — and seen immediate, material increases in revenue because we made the choice process more facile.

Mint embodies this approach. In addition, Mint.com took advantage of a couple very important trends that all firms should be watching:

Increasingly, customers expect everything — in the immortal words of Robert Wodruff, the man who made fizzy sugar water into Coke — to be "within an arm's length of desire". Every competitive product needs to be at people's fingertips, on the phone, on the web, everywhere. Mint was.

Second, many people are increasingly comfortable sharing all kinds of data for the sake of convenience. The assumption is that things in the digital world are no more or less secure than those pieces of information floating around on pieces of paper or in file cabinets. While some folks would no doubt be concerned about the security of any web-based financial planning tool, clearly Mint had no trouble attracting customers who felt that the reward outweighed any potential risk.

Online, poor designs are ignored and only great design bubbles to the surface. We don't need to speak again to the simplicity of Google, or the ease of Twitter — it goes without saying that consumers don't have to put up with anything that is not superior. Better options are a click away.

The questions for your firm are: are you staying complicated to make your managerial life easier? Or do you have the courage to force the simplicity that the market wants?

If the Lehman collapse has taught us anything, it is that the financial industry has a more profound impact on the real economy than many had realized. It has the potential of helping fuel economic growth, raising people's standard of living, self-realization, and inclusion in the process. Or, as we have witnessed over the past two years, it can wipe out trillions of dollars of wealth around the world, bringing capital markets and economies to a brink of a collapse. The conclusion that many people are drawing today is that we need better regulation — and more of it.

Rigorous, consistent, and internationally coordinated regulation will certainly help. But it will not address the fundamental behavioral dynamic at the core of the recent financial crisis. The fact is, executives in financial services are compensated based on ROE, P/E, and other such performance metrics — in absolute terms and relative to peers. Meanwhile, equity analysts and investors look for companies to deliver consistent and growing accounting earnings — irrespective of the prevailing economic and market environment. The net result? Vicious circles that lead to bad decisions and destroy value.

Suppose a publicly traded financial institution — having just witnessed the collapse of Lehman Brothers, Bear Stearns, and AIG — decides to pare down risk and grow less volatile businesses, like wealth management, advisory services, market making, or commercial banking. Meanwhile, its peers are back into the swing of things, loading their balance sheets up with risk in every way imaginable. How long can we expect the firm's executives to stick to their vision before competitive pressures to deliver short-term earnings force them into excessive risk taking as well? How long before boards of directors run out of patience and replace these executives?

As this moment, financial institutions are having a heyday. After years of margin pressures preceding the latest financial crisis, the underlying economics of financial businesses has dramatically improved during the crisis, with yield curves becoming steeper, bid/ask spreads widening, underwriting fees and sales commissions increasing, and so on. But déjà vu is just around the corner. Soon enough, calming markets and competitive pressures of fully-commoditized financial businesses will compress margins and fees — if not to the 2006 level, then close to it. As a result, many financial institutions will go straight back into risk taking, the extent of which will often be misunderstood and mismanaged. The same vicious circle that created today's financial crisis will be repeated.

If this grim prediction comes true, such future crisis — just like the most recent one — will not be a failure of risk management. It will also not be a failure of mathematical models, rogue rocket scientists, or normal distributions, as the Church of Black Swan would like you to believe. It will be a crisis caused by the continuing disconnect between strategic decisions and risk management. In other words, risk practitioners fully understand pros and cons of different risk management models - and what these models can and cannot do. The problems arise when senior financial decision-makers and institutional investors misunderstand or misuse those models as they try to keep up with competition or fight earnings pressures.

The regulatory reforms now being mooted can't easily address these realities. There are a million different ways in which financial institutions can take on risk. Moreover, given the continuing lack of risk-based transparency and departure from mark-to-market accounting, financial markets, investors, and regulators will remain blind to the true riskiness of the balance sheets of financial firms until too late.

The burden on developing a strategic vision for the organization — one that explicitly incorporates risk management and makes use of the lessons learned from this crisis — remains squarely on the shoulders of boards of directors and executives. For them the key challenge is to foster corporate cultures that give risk management an equal seat at the table where strategic decisions are made. Financial institutions — and many non-financial companies — must explicitly acknowledge that risk plays a central role in their business models. Risk is already the key determinant of their ROEs, P/E ratios, earnings volatility, and more broadly, their value creation or destruction over time. The ways in which decisions are made on the most senior levels of financial institutions — and the ways that these organizations are structured and managed — must change to reflect that reality.

Crafting a sound strategic vision for financial service firms will be exceptionally difficult. It will take genuine leadership and resolve. It will need broad systemic knowledge as well as collective openness to new ideas. It will demand a longer-term horizon that fights the focus on short-term accounting earnings. Last but not least, it will require dynamism in the broadest sense of the word. All of this is hard work. But as difficult as these endeavors may be, they are far less painful than the alternative - a Darwinian failure to evolve followed by financial ruin.

If you were at the helm of a public financial institution, how would you resist the misguided short-term earnings expectations of investors and equity analysts — or reckless behaviors of your peers?

Leo M. Tilman is president of L.M. Tilman & Co., a global strategic advisory firm, and teaches finance at Columbia University. He is the author of Financial Darwinism: Create Value or Self-Destruct in a World of Risk (Wiley 2009) and other books.

Featured Guest: Bill Sahlman, Harvard Business School professor and Senior Associate Dean for External Relations.