In my last post, I enumerated the skills that leaders must possess. In this post, I am going to concentrate on why they don’t, often enough, exhibit those skills. And, in the next (last) post in this series, I am going to provide a short (five items) list of what I believe our leaders need to do to get us on the right track—one that will take us to greatness rather than failure.
So, what are the things that prevent our leaders from being effective:
- Arrogance: This takes many forms. Most of our leaders have achieved a lot in life. Many have, for too long, been told that “they are right” and “they are great”. Their accomplishments reinforce these notions—otherwise why would they be as successful as they are. I have seen this both in business and in politics.
To this point: When I was in college, I worked for a chain of pre-big box consumer electronics stores. The company had been founded and run by an very savvy immigrant. I came to know him fairly well. The chain had 20 stores, he was clearly a success. I noticed that the paperwork (and it really was paper-based) was processed by a room of about 25 ladies who seemed to work from dawn until dusk clearing the transactions through the process. I mentioned that it might be a good time to invest in point-of-sale computer systems as the cost and time was soon going to become a limiting factor the businesses growth and future success. He did not react well to my suggestion and made it clear that he was the brains behind the business (it was his idea and his success) and that I hadn’t even graduated college. He did nothing with my suggestion. And, he was out of business (his competitors were implementing these systems and were more efficient/competitive as a result) within three years.
- Insufficient Training: I am probably overstating the case here, but there was a time when a certain corps was raised and trained for public service. This training included both hard (writing, speaking and analytic capability) and soft skills (negotiation, compromise, listening and most importantly empathy) necessary to lead. The idea of serving the public good had a grander meaning. It didn’t just mean serving those who agreed with you. It meant striving to make things better and representing all the people. That resulted in an attitude that was different than what we see today. My view is that there was a greater willingness to work with the opposition to arrive at a solution that at the very least made everyone equally unhappy😊
- Bifurcation of the Electorate: We live in a society (the U.S.) that is split. And until recently, most of us didn’t even realize it. There are at least two major groups in the U.S. and they disagree (and in some cases only think they disagree) about a good many things. Politicians can take two routes in trying to “win” with a bifurcated electorate. They can move toward the center and hope to draw a large enough population from the center and from the extremes to win. Or, they can move toward the extremes and hope to get the extreme voters and enough of the center to win. The first strategy has an issue. If everyone moves toward the center, how do candidates differentiate themselves? This cause politicians to move toward the extremes.
This whole situation is exacerbated by two factors:
Voters tend to want to live in communities with people who think the same way they do. This means that representatives are likely to (as one might expect) have views that are fully in line with the people they represent and want to support them in the hopes of being reelected;
Elected officials further aggravate the issue by gerrymandering and making the geographies that they represent even more homogeneous than they might otherwise be.
The confluence of these issues makes it harder to compromise or easier to be obstructive (when you aren’t in the position of power) depending on how you care to look at the issue. The bottom line is that the bifurcation of the U.S. electorate and the attendant discord incited by those they elect in an effort to prove themselves worthy of reelection, make it very difficult to get important things done and our leaders do not have the motivation or training to overcome these issues.
This is an issue (especially points one and two) for both business and political leaders. And, it is a problem for businesses whether these issues are manifesting themselves of the business or political fronts. Because political dysfunction hurts business. It not only causes uncertainty (see the EU) that makes it difficult to plan for the future, it means that in too many cases, important things take much to long to be agreed and this puts businesses (which need to be nimble) at a disadvantage when compare to those who have reasonably well functioning governments to deal with.
This is a real problem. And as the title of this series of posts suggests, it doesn’t cause immediate and apparent failure. Failure is achieved incrementally, each time a bad decision (possibly caused by arrogance, or an unwillingness to compromise) gets made. Or even worse, when no decision at all gets made. With no decision, there is no action and (in many cases) no action is just a deferral and it can be very costly to defer.
Take the example of deferred decisions to do maintenance or bridges and roads—because agreement can’t be reached on tax reform and acceptable deficit levels. And, that lack of maintenance has costs. Deferring (time value of money) doesn’t offset the cost of future borrowing in terms of paying for larger bills (due to further deterioration because the maintenance wasn’t done in a timely fashion) and the potential (highly likely) that the cost of capital will be higher in the future.
You just have to change a couple of words and you have the similar example for the business world. Lack of timely investment means that the competition gets a head start. Lack of vision (quality, performance, features) and the resulting lack of timely action on the part of the U.S. automakers left them with product sets that were not competitive. The U.S. automakers just kept producing the same-old/same-old because they didn’t have leaders who were making decisions and pushing the industry into the future. And, this sad state of affairs nearly bankrupted the U.S. auto industry. The several factors, including their near death experience a new generation of leaders and a bunch of European and Asian manufacturers who have opened plants in the U.S. has proven that the problem (as it was often suggested) wasn’t with the labor force, but with the leadership.
My last post in this series gets further into the political side of things than I really ever want to, but I believe that if we don’t fix the political environment, the business environment will become too toxic to overcome the handicap imposed by a dysfunctional government no matter how good the business leadership.
Copyright 2017 Howard Niden