While I am certainly not a financial guru or any sort, I believe we have a long way to go before the US economy recovers. What does this have to do with leadership? Well, just about everything. As we look at what is happening to our economy today it doesn’t take a rocket scientist to see how we got into this mess. We got into this mess because managers (I use this word intentionally) in many sectors of the economy made really bad financial decisions.
Who was involved? Well, let’s not go there. Instead. let’s look at what YOU need to do in the future to enable you to be financially successful. A cardinal rule of Leadership is that a leader makes financially sound decisions. While easy to say, what does this mean?
Let me turn to Ben Ingram for some help here. Ben Ingram was a financial guru who passed away in 1976. He was a firm believer in value investing and his advice can be used as a guide for how we should lead financially. In his book “Security Analysis” Ben wrote, “An investment operation is one which, upon thorough analysis, promises safety of principle and a satisfactory return. Operations not meeting these requirements are speculative.”
What helped push our economy over the edge, was too many managers not making financially sound decisions. Too much speculation and not enough concern for safety of assets. All business carries risk to some extent, so does life for that matter. But what are doing to ensure that you are making business decisions that have an acceptable level of risk?
I would like to wave my magic wand and give you the answer… the best practice. But I don’t have one. I can tell you this though – Groupthink and the inability of many leaders to be open and honest with their staffs got in the way.
Your take away – As a leader, you must sit down and openly discuss this with your staff. Look for ways to balance the decision making process so that risks can be properly identified and good business decisions can be made.
Stay tuned… my next posting will be about becoming financially sound yourself.
All the best,
All the time