President Obama's Future Leadership of Capitalism 3.0

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.

Comments

[b160allen]

@Susmita Barua
Anytime anyone gives a suggestion on how to allocate money based on what's good for the "people" quite frankly scares me. You ask how are you to be free? You are free to go out and create and innovate every single day using your unique set of talents and abilities. Playing the victim wont get you very far.

As for the article, love the part about mentoring networks for young entrepreneurs. We need to start teaching innovation again and stop using our colleges as a farm system for corporate America. It's time for Americans to build real tools that they can use to depend on themselves not the government or a big business.

[Susmita Barua]

American academia, media, experts and pop culture icons need to look and think deep outside the box they are in to have a mind-shift about the nature of 'capital' (financial capitalism) in capitalism and why this system is unsustainable mathematically. The big blindspots of capitalism can no longer be covered up under diffrent jargons and labels.

We need to rethink and redefine money, how it ought to be issued and allocated through a sytem that serves we the people, instead of enslaving them in the name of democracy and illusion of free market. How free are we if we are unable to go beyond employment by big institutions so we can pay the mortgage and bills or create right livelihood that gives us joy and meaning?

http://conscious-capitalism.blogspot.com

[jhNY]

American leadership has failed as a class and as a concept. Our primitive desire to place faith in some self-promoter's personality cult has done terrible things in business and in politics here. Leaders very often arise out of our overabundant class of sociopaths. Let us instead return our faith to law.