A crisis of short-term minded leaders: Aprois moi, le deluge
The quote, “Aprois moi, le deluge” is attributed to him. Roughly translated, it means “After me, the deluge”. On one hand it demonstrates a keen understanding of what was about to happen. But, more realistically, this quote is most often used to show how Louis XV, even though he knew what was to happen if the current system did not change, steadfastly refused to make the tough decisions required to bring about that change. Knowing that he could hold on to position and power throughout his reign at least, he ran the French monarchy essentially into the ground. It demonstrates the highest level of selfishness as a leader, focusing only on what happens during the leader’s own tenure and caring nothing at all about what comes after. This is unfortunately true of many politicians and leaders of countries.
The same is true of some leaders of organisations today. They run their companies (or schools, churches, synagogues, political parties, countries, country clubs, franchises, associations, charities, etc) into the ground, in pursuit of a quick buck, or great short term results, with no thought or concern for what happens after they’re gone. This is probably not done consciously or deliberately, but it is nevertheless the outcome.
True leaders seek to be judged by what happens after they have left, not what happens while they are there. When the celebrated Jack Welch left GE, after a quarter century of blistering results, and being named TIME magazine’s “Manager of the Century”, he reportedly told the media that they would only know if he was a truly great leader once his successor, Jeff Immelt had been in the job a few years. Only then would we know how well he had prepared the next leader, and what shape he had left the company in.
In Jim Collins’ best selling book, Good to Great (Random House, 2001), this is one of the key distinguishing factors of what he calls “Level 5” leaders: that they focus on building an enduring organisation that lasts beyond their tenure, rather than focusing on their own career and the company’s success only while they are there.
I am personally not convinced that Collins fully understood this type of leadership. He doesn’t do a great job in the book of explaining it or helping people to know how to attain it. But I do think he has discovered something important, and others will now take his findings and go deeper into this aspect of them. In his research, his team identified five “levels” of leaders: Level 1 is a Highly Capable Individual probably acting in a solo, entrepreneurial capacity, Level 2 is a Contributing Team Member, Level 3 is the Competent Manager able to organise people and resources to accomplish a set task, Level 4 is an Effective Leaderusually leading by sheer force of personality, with an inspiring vision and ego to match and focusing on high performance standards; and Level 5 is the Executive who builds enduring greatness through a “paradoxical blend of personal humility and professional will”, possessing great self-honesty and understanding and emotional intelligence, keeping out of the limelight and setting up their successors for even greater success than they achieved themselves.
Fully developed leaders embody all five levels of leadership, and one does not need to develop from level 1 to level 5 in any sequence. Collins is convinced that level 5 leadership was a critical factor in every one of the “good to great” companies his team analysed.
Leadership is important – the number of books written on the subject, courses run and development programmes put in place bear testimony to this. Having good leadership installed in any organisation is critical to its success. But, as Collins himself points out, there is an inherent danger in the “Leadership is the answer to everything” perspective. It’s the modern equivalent of the”God is the answer to everything” perspective that dominated the Dark Ages, and held back scientific advancement. Before the Enlightenment, people ascribe all events they didn’t understand to God. Why did the crops fail? God did it. Why did we have a tsunami? God did it. What makes the sunrise? God. Through the Enlightenment, we began the search for a more scientific understanding – physics, chemistry, biology, astronomy, and so on. We didn’t become atheists,but we did gain a deeper understanding of how the universe works.
Similarly, every time we attribute everything to “leadership” we’re making the same mistake. We’re simply admitting our ignorance. As Collins explains, “Not that we should become leadership atheists (leadership does matter), but every time we throw it ends up in frustration – reverting back to ‘Well, the answer must be Leadership!’ – we present ourselves from gaining deeper, more scientific understanding about what makes great companies tick.”
Part of the problem is that we do not design an entire system that supports and attracts the type of leaders we really need. Shareholders and boards of directors place immense pressure on senior executives to deliver on short-term goals, often at the expense of good strategic thinking.When you’re judged each day by the daily closing price of your stock market ticker, it’s no wonder good leadership seems so rare.
Executive remuneration also often mitigates against the emergence of Level 5 leadership.How leaders are paid and earn bonuses is often a mystery as companies that have posted serious losses regularly reward their CEOs and senior Execs with bonuses in the same year the company loses millions. This outrageous practice causes an outcry every time it happens and yet it continues to happen. CEO pay often bears no relation to reality at all.
The obvious starting point is to link senior executives’ pay to actual company performance on a year by year basis. But even that would encourage short-term thinking. A much better solution, would be to pay out bonuses to senior executives after they have left the company. In fact, it would make real sense to link the pension payments of retired Execs to the ongoing performance of the companies they retired from. This would give real financial incentive for them to act like level 5 leaders while they have the reins of power.
However each organisation chooses to do it, the fact remains that it must be done – we must incentivise the right behaviour in our leaders. If we do not, it should be no surprise to us that whether consciously or subconsciously they are tempted to say, “Aprois moi, le deluge”.