January 03, 2008

Hoping for Cautious Captains

From yesterday's Financial Times:

In politics, business and finance, as on the seas, the hero is the person who tackles a problem, rather than the person whose actions prevent the problem arising. The statesmen we need are those who avert wars and prevent depressions, but such individuals gain little credit.

I thought about posting the entire article written by John Kay. It raises questions about politics and the leaders we choose, businesses and the compensation and stature afforded top executives and even challenges the integrity of modern capitalism and the pursuit of a career therein.

I have not conducted a detailed study, however, it seems that many of the problems in business and politics are faced by the very leaders who created them. President Bush and the Iraq war and bank CEOs and the subprime financial crisis are the most obvious recent examples. The public often praises fortitude and resolve during these events, rather than the intelligence to avoid the situation altogether. (However, in these two events, the failure has been so widespread and pronounced the public has lost its willingness to watch in awe as the leaders charge ever onward. "Stay the course" as a slogan has lost its appeal.)

In business and politics, praise is often directly related to compensation and success. The cautious manager is in danger of producing average results, but will rarely lead a company or country to ruin. Whereas the "bold" leader will more likely achieve stellar results or massive failures. These failures not only affect their reputation and legacy, but also have lasting effects on the citizens and employees who count on their judgement and expertise.

Steady growth and progress in business and politics are admirable goals. However, steady usually isn't associated with fame, fortune and unfettered praise. Consider the potential inverse relationship between these desires and a future leaders results.

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