President Obama is learning early on that it's leadership, stupid! It's all about finding and assembling a great team and leading them, helping them to develop their own "bully pulpits."
In my work I listen to stories of leadership failure day after day. We are witnessing an epidemic of wipeouts; - from the heads of banks and corporations to school superintendents and entrepreneurs. Moreover, there is a growing gap between the owners of knowledge and experience, and the new practioners, shapers of policy, and leaders who carry it out. Not only do practices and knowledge go unshared, but too often bad stuff, as in sloppy or rigid practices, loose ethics, and raw greed get passed along instead.
To make this point, yet another new expose book, House of Cards, by William Cohen, focuses on the demise of Lehman Brothers. It would seem that tips on playing competitive bridge, overweening pride, and short-term plundering were the leadership messages passed on through succession and down the ranks at Lehman.
Each round of historical failures - Keating's S&L's, Solomon Brothers, Enron, Worldcom, Barings Bank, Anderson Accounting, A.I.G, Countrywide, and Merrill Lynch -brings us the same bitter lessons about leadership failures. Whole industries ranging from automobiles to home appliances are simply cannibalized or replaced by hungrier firms with better leaders. It's clearly leadership stupid throughout the world economy.
In the midst of our leadership failures, we are now confronted by economic failure and unfortunately our corrections for economic failure always devolve to the crude instruments of legislation, added bureaucracy, reordering spending and taxing. Please note that none of these improve the quality of leadership. Ironically, we know how to fix core leadership issues and we have the technology to support the fixes. We desperately need a whole new paradigm that allows capitalism to be reborn. Here's a starter list for our future leaders of Capitalism 3.0:
Future Rules of the Road
·True transparency and open source bookkeeping must be available for all stakeholders. Metrics must be based on clear written values as well as objective financial standards and must not be "paid for" by the organizations being measured such as current practices for bonds, boards, "C" level competition.
·Compensation schemes must focus on promoting the organization's stated values and long-term results, including social and environmental impact.
·Action learning and knowledge transfer must be is measurable and again tied directly to stated values and brand enhancement or reputation building.
·Mentoring networks must exist that allow young entrepreneurs to learn from experienced, ethically-sound men and women who have learned hard lessons and survived robustly.
·Learning contracts must replace employment contracts and can be aggregated into learning indexes. We must remember our physics; organizations and leaders not growing are dying. We need to grow lots of learning organizations and to eliminate plundering ones.
Of course all of these reforms need to be backed up by excellent clear public policy and regulation. Tax policy must match and support long-term goals, especially environmental and social responsibility. Most of the monitoring of policy can be achieved by industry - derived aggressive monitoring/accrediting but only after full transparency is achieved. And, of course those leaders who are responsible for legislation, regulation, and oversight must also be educated to become future leaders under The Future Rules of the Road above.
President Obama can lead us toward 3.0 capitalism, but he will need a vast amount of support from followers who are willing and able to contribute to the effort and motivated to break the old. And, he will need a leadership team not wedded to old capitalism.