This is the sixth in a series of posts which articulate fundamental shifts in leadership paradigms from the 20th to the 21st century.
There are a number of problems that come with the 20th Century habit of prioritizing short-term gains for shareholders. The profit formula is simple – increase income and decrease expense – the wider the gap, the greater the profit. Let’s assume for the moment that most shareholders intend to increase income by offering a value-for-money product or service. On the income side, they increase it by selling more or selling what they sell for more. Again, a relatively simple formula. It’s on the expenses side that things get a little more complicated and leadership choices become more interesting. When shareholders are looking for short-term gains, expenses get cut to the bone and investment in future profitability is non-existent. In the most extreme instances, leaders are hands hired at the cheapest possible rate to ensure efficient use of resources and resources must be secured at the lowest possible cost in time, money or effort. Exploitation is an almost inevitable outcome.
In the 21st Century it has become increasingly unacceptable for shareholders to rape and abuse people and planet for personal or organisational profit. There is a growing awareness of the distinction between ethical , socially-responsible business and legitimised organisational theft and criminality. Effective leaders are aware that when their organisational impact is negative, the system will kick back at the organisation – maybe not immediately and maybe not terminally, but ultimately. In contrast to this perspective, they understand that there is much to be gained from enriching the whole ecosystem – growing people, growing infrastructure and growing potential.
Astute Leaders have an investment mindset. They create significantly greater future value through developing a rich and empowered stakeholder ecosystem. They invest in people, places and systems for maximum benefit to all.
Reflection question: As an Astute Leader, how can you develop future potential internally and a rich, healthy and cooperative context in which to grow a stronger, more powerful and more positively impactful organisation? I’d love to hear your thoughts.
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