Leadership and the European Debt Crisis

As the debt crisis in Europe worsens, there are questions that must be asked: “Where was the leadership?” “Why was there no accountability?” “How could things have gotten this far?”

It’s too easy to say that the leadership of the several economically troubled countries are simply politicians whose only goal in life is to be re-elected, keep their party in power…in essence keep their jobs.  After all, leaders of business have constituencies they are responsible to as well.

Perhaps it would be useful to examine some of the business leader’s key characteristics.  Then, you can decide for yourself whether the heads of state for those countries in deep financial difficulty measure up.

How about we start with communication.  Business leaders can’t hide, results speak for themselves and I’m not just referring to the income statement…there are lots of other metrics: market share, competitor success, product quality, employee satisfaction to name a few.  So, whether it’s a shareowner, a board of directors or one’s own employee body; you’ve got to stand in there and, if the news is negative, present a convincing recovery plan to inspire confidence in your “constituents.”  I could have this wrong, but to me political leaders present what’s good about their program, but put just as much effort into trashing that of their opponent.

Consistency is a critically important leadership trait for a business leader.  If people don’t know what to expect from you, don’t have confidence you’ll do the right thing the first time and every time; you won’t be in the job long.  Politicians are known for consistency in a way.  You can pretty much count on them to do the expedient, popular thing – whatever it takes to garner votes.

We could go on and on, but permit me to leave you with a final thought.  Business leaders’ performance is evaluated every quarter with some focus on annual results as well.  Miss an anticipated result, come in under plan; you’re likely not to be in the job for long.  There’s no four or six year term guaranteed.

No, wonder Europe is in so much trouble!  Business and politics share objectives, the welfare of the constituents, but the rules are dramatically different.