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September 25, 2008

A Failure of Leadership

I, like pretty much everyone else, have been watching the unraveling of the US financial markets with a mixture of horror and fascination over the past couple of weeks.  

At the risk of being simplistic, it seems to me this is a very straightforward example of greed and short-sightedness: of a great many people over a long period of time focusing primarily on what would serve their own current financial interests vs. the long-term good. 

In an article today, the NYT notes how the Democrats are insisting that the bailout plan include a provision to limit the compensation of senior executives whose companies get government assistance. That this is even a point of debate reinforces my sense that many of the key players have long been acting out of short-term greed, and fully expected to be allowed to continue to do so. 

Now as you faithful readers know, I believe the essence of being strategic is consistently making those core directional choices that will best move you toward your hoped-for future. It seems as though many of these executives' hoped-for future was, "I'll get mine, and I don't much care about anything or anybody else."  If that's so, then they've been strategic - in an extremely limited and self-serving way.   

I believe good leaders are Far-sighted, Passionate, Courageous, Wise, Generous and Trustworthy.  I think it's safe to say that senior executives in the financial sector haven't been demonstrating these qualities. If they had been good leaders, their hoped-for future would have arisen out of that mindset, and would have been something like, "I'll build a sustainably profitable company that benefits our shareholders, employees, customers and me over the long term."  

We're seeing what happens when people in positions of great power are poor leaders who focus primarily on their own self-interest: things blow up, either literally or metaphorically.

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Comments

Excellent post Erika. I agree with what you have but I'd add that we're also seeing what happens when you put people in systems that reward greed and short term results. And there's the issue of twenty years or so of pretending that you can have everything without giving up anything.

Wally,

Way too true, on both counts. I often find myself talking to senior executives about how to re-focus their companies on balancing long- and short-term results. And on recognizing that the essence of strategy is picking your shots. (In other words, not assuming you can have everything!)

Erika

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