Leadership is complex but necessary

By DAVID MOON, Moon Capital Management, LLC
March 27, 2011

Peter McArthur once said that every successful enterprise requires three men – a dreamer, a businessman and an SOB. The language may sound harsh, but his sentiment is that leadership is a complex thing. It is not taking a staff vote or holding workshops in a time of crisis. Nor is it yelling at secretaries when your car runs out of gas.

It is a complex fusion of strength and humility, decisiveness and deference. It is a clear vision of direction, with singleness of purpose.

And it is all of that wrapped in a quiet cloak of a commitment to doing the right thing.

Too often we misinterpret one of those qualities as leadership, when it is little more than braggadocious or self-promotion. The egomaniac CEO who dictates what color nametags the stock boys wear is not demonstrating leadership. Nor is the man who hires a PR firm for personal promotion.

Those who knew him described Bernie Madoff as a great philanthropist and a pillar of his religious community. He gave millions to hospitals, universities and theaters. Closer to home, Gatlinburg Ponzi schemer, Dennis Bolze, gave money to all sorts of local charities, including the University of Tennessee Athletic Department.

It is easy to build an edifice with someone else’s money, accepting false praise for your great leadership skills.

Consider the executive who is highly effective at raising and spending other people’s money. We may repeatedly elect that person to Congress or place him in other positions of public responsibility, but that is no commentary on his competence or ability to hire excellent employees, inspire them or effectively manage them.

I used to think that people were either good or bad. Over the years I have seen people wander back and forth along a spectrum. Seemingly “good people” have stepped across lines to do things that shocked me – until circumstances or some leaderful influence in their life jerked them back into place. It might have been a parent, boss or other mentor.

That is leadership.

Warren Buffett once said that you can’t make a good deal with a bad person. Character in business is important, particularly at a management level where you have influence and presumably inspiration over others. A leader is responsible for instilling a culture of character and corporate compliance at his company.

The problem is that people don’t wear shirts that announce, “hey, I’m a bad guy” so everyone will know it. A bigger problem is that some people may not even know who they are themselves. They may have spent their entire lives kidding others so much that they’ve even fooled themselves into thinking they are something they are not.

If the best thing you can say about a corporate executive is that he goes to church every Sunday, makes a fine family portrait and donates his time at the United Way you really haven’t said much at all about his competence, and you certainly have said nothing about his leadership ability.

Some men must look into the abyss to see themselves. Others look into the mirror and see their phony press clippings.

David Moon is president of Moon Capital Management, a Knoxville-based investment management firm. This article originally appeared in the News Sentinel (Knoxville, TN).

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