Leadership

Who should decide upon the leader’s direction? The leader, by definition.

Rule 6 – There is no safety in numbers. The second of the Leadership Rules in Taming Tigers.

Once upon a time, the trend was for leadership by principle and consideration of what the “right path” might be to achieve the grand vision. We voted for people we would trust to make the right call. Often they failed, for sure, but there was a direction and a “lead” provided to the country.

It then became apparent that if your plan was to “market” a party to the highest number of voters, rather than to risk “selling” your vision for the nation to those voters, then leadership by focus groups was a more effective strategy. Let the people tell you what they want to be sold, then sell that. The ideas may be ill-informed, but you’ll win. “Wikigovernment”. Not even Mrs Thatcher would have trusted “the market” in ideas to provide the direction.

In these desperate times, we see an even more philosophically barren level of “leadership by listening to popular opinion – (which has been conceived and gestated by the media pack and then in turn born into reality and reported as fact by the media) – and then responding because you need to be seen to respond”.

Yes, yes, I know it’s always been there – but not to this extent and now it’s getting dangerous – and also interesting learn from.

The government, a team of accomplished, professional vote-winners – is entrusted to run a number of businesses, UK plc being one such. Royal Bank of Scotland Group being another. You and I own shares in both of these – and we need both to flourish.

Now I run a business too and I am also employed by my business. I believe that (one element of) the right path is to reward effort and to reward achievement. If I fail to get that part right, my superstars may become your superstars and I don’t want that to happen. I’ll fight to stop it. Sorry.

Few people feel sympathy towards “fat cat bankers”. But that is not relevant to this post. Leadership and the quest for the right path is our puzzle here.

So in RBS Group there are, I am told, some very profitable divisions run by talented and dedicated people. Let us imagine that the foreign exchange dealing operation is making good money. This is good news for you and good news for me. We NEED to be behind RBS Group’s success, even if our media likes to sell doom to us and many like to consume it. It’s good for our economy and now it’s also good for the provision of government services like hospitals and schools. It’s good for our children’s rate of taxation and national debt.

Let us say that you are a forex dealer at RBS Group.

Let us say that you have lost your bonus for your hard, dedicated work and your achievements within a highly successful business unit and that you are in difficulty because your outgoings are calculated on the basis of your bonus being paid to reward you. Your family is in difficulty as a result. You want to end the difficulties, naturally.

Let us say that another bank, run by professional businesspeople wanting to impress shareholders and not professional vote-winners wanting to impress the media and “the people” is aware of your skills and gives you a call.

Let us say that this is happening today – at this moment – as you read this.

Let us say that you and I are losing our RBS stars to banks to which our children’s rates of personal taxation  are not inextricably linked.

Brains bigger than mine must decide if we need to regulate bounses (this must, of course, be a global regulation rather than UK or read the above suppositions again with the words “Wall Street” or “Frankfurt” inserted before the bank coming to lure away talent and acheivement – and the “global” part is impossible). That may or may not be the “right path”

But to act against one employer <em>in order to be seen to bow to “overwhelming public opinion”</em> is bad leadership. The Tiger is at work. The terror of doing the rational, commercially viable thing is trampled on by the need to please “the people”.

Rule 6. There is no safety in numbers. Sometimes we have to stand firm and do the right thing even when many people who are not responsible for the consequences – have nothing at stake other than pub talk and a column to fill – may criticise us. AP McCoy and Frankie Dettori know that truth and that risk when they take a bold, professional call to kick for home early on a horse against the safe, risk free alternative of running home with the field. That’s partly why they lead their game. It’s partly why it sometimes goes wrong, also.

The people running one of our biggest personal investments do not seem to know that. They are running with the media pack at the very time we need principle and consideration of what the right path may be to rule their actions.

Whether we are leaders of a family, a team, a business or a nation, we all face this same dilemma regularly. Who sets the leader’s direction? Once we have taken the advice, done the consulting, do we have the courage to make the best call we can in the face of criticism and stand by it?

Do we allow the children to feast daily on crisps, cola and satellite TV? Keep ‘em happy and get a new job before problems we created become apparent?

Or do we try to set the path we believe to be right?