Perception and Awareness

Last week, we had a guest speaker from LuckStone providing us with invaluable insights on leadership and its styles. We discovered that leadership is most effective when you have enough SELF-AWARENESS and realize your own behavior styles and the difference between right and wrong.

Self-awareness eliminates your choices which create moment of truth. This moment of truth forces you to make a choice which is usually self-management.

Now you have 2 options or choices to make:
1.) toxic (you act/respond the way you are and who you are)
2.) mission/vision/values (know yourself and act calm representing your organization with a focus on the positive – ADAPTABILITY)

Leading During A Crisis: Lessons from the 2008 Wall Street Meltdown

Today, we sit back and reflect upon the actions taken that caused this meltdown and all we can really see is the leadership failure at the Wall Street. Why? Because these senior managers and executives knew the potential risks with prime and sub-prime mortgages and yet approved the lending to low-income individuals.

At the end of September of this year, The Wall Street Journal sponsored and Yale School of Management co-sponsored a roundtable discussion regarding the financial sector crisis. During the discussion, Yale’s Jeffrey Sonnenfeld shared some leadership lessons that can be summed up into the following five high level leadership lessons:

1. Blaming the System. “We have become political hypochondriacs. We seem eager to declare that the system has come down with some dread disease, to proclaim that an ideological center blessed by the heavens no longer exists, and woe unto us.” In essence, every time something goes wrong in the economy we tend to blame the system; however, the system is controlled and managed by the society or rather said organizational leaders who develop policies and procedures which shape an organization. Policies and procedures either enable or disable an organization. Unfortunately, some leaders do not realize that policies and procedures govern the system and the organization and therefore continue to blame the system for organizational failures.

2. Financial literacy matters but courage and character matters the most in the Wall Street crisis. Instead of blaming the systems for failure, management should and must recognize that taking the accountability and responsibility for failure will ultimately lead to success. The best example is Jamie Diamond at JP Morgan Chase to include a few others. Their leadership recognized that they were doing something wrong and instead of pointing finger and blaming the system, they decided to conduct an organizational assessment and reengineer certain processes and procedures to prevent future failure.

3. Getting caught up in the systematic finger pointing and overregulation which creates additional performance pressures and increases the competitiveness within all industries regardless of size and geographic location. A human resource term often used within an organization is a performance scorecard.

4. Risk management is essential because the goal of any organization should be to minimize the potential levels of risk and determine how to best handle such exposure. Understanding risk form micro level is the key but at Wall Street, many were not able to look and think outside the box causing such failure. Leadership and management must be able to make sound business decisions and fully understand and manage risk.

5. Intentional lack in transparency and accountability. Board decision making was poor and as mentioned previously, the message from the loan officer or leadership to the borrower or consumers and employees was not very clear leading to mixed messages and creating a world of uncertainty.

4Es of and 6 Rules for Successful Leadership

“The day you become a leader, it becomes about them. Your job is to walk around with a can of water in one hand and a can of fertilizer in the other hand. Think of your team as seeds and try to build a garden. It’s about building these people. Only you will know the team,” said Welch.

Business + Strategic Competencies = LEADERSHIP

The New Era of Capitalism??

Over 100 years ago, a Scottish businessman, James Wilson, once pointed out that a melancholy reflection “while wealth and capital have been rapidly increasing” and science and art “working the most surprising miracles”, all classes of people were marked “by characters of uncertainty and insecurity”. Wilson’s solution was freedom. He committed his venture to the struggle not just against the protectionist corn laws but against attempts to raise up “barriers to intercourse, jealousies, animosities and heartburnings between individuals and classes in this country, and again between this country and all others.”

The U.S. government has invested over $250 billion into its banks to save this country from going deeper into “depression.” Other governments in Europe, Asia, and Australia are re-regulating their financial systems to prevent this crisis from escalating further or occurring again on same or similar terms. Over the past 100+ years, capitalism has been beneficial for billions of citizens worldwide. The parts of the world where it has done extremely well have prospered; the parts where it has shrunk have suffered. Capitalism has always created crises, and always will due to the leadership style and the above mentioned variables i.e. jealousies, animosities, etc. The world should use the latest financial crisis, devastating though it is, to learn how to manage it better. Sadly another lesson of history will only be talked about for decades unless our leaders step up and lead by example – but what example??

The Race Is On...

On Sunday, Porsche Automobil Holding SE announced it had 74.1% stake in Volkswagen AG and leaving it just 0.9% short of the 75% level needed to log Volkswagen's revenues and assets in its own books. Porsche vowed to continue with its aggressive move to reach the 75% in 2009 and achieve a “domination agreement” despite the disagreement between its family owners who are indecisive whether or not to support such a move. VW’s leadership continued to welcome Porsche’s investment while the VW’s labor unions “fiercely oppose” Porsche efforts because they see a great deal of threat to workers’ rights. I will continue to follow this development and I am excited to find out what is VW’s priority: 1.) Provide adequate levels of leadership and ensure that employee’s right will be guaranteed and will remain the same, if not better or 2.) Ensure maximum profits through any mean and allow the executive board to continue to receive gigantic paychecks. The race is on between the VW Golf GT and the Porsche GT…TBD who the real winner is…