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LEADERSHIP: GOING BACK TO GO FORWARD
Australia’s Prime Minister, Treasurer and hapless Government have locked themselves in a citadel of denial. They’re defending a resources super-profits tax, that’s been ill-conceived and badly introduced. The local media are full of it – as are key overseas financial reports. In Australia, not only mining people but also ex Labor Ministers, retired public servants, industry analysts and “friends” of Labor are trying to make the Government see sense. The tax, as proposed, is a national risk. Other countries are welcoming it as reducing Australia’s competitiveness in both attracting investment and exporting minerals. This same week, I’ve had a client CEO attempt a similar denial. Here are some thoughts on getting free.
The CEO runs a venture capital company. She’s denying the urging of both her largest shareholder and senior staff that the firm is over-stretched with too many investments at a time when funding is scarce, investee-company growth is challenged and IPOs near impossible.
I feel some sympathy; I’ve been there myself. I’d initiated a restructure of an organisation I was running. Parts of the change were good, but not the underlying logic of the biggest part. I was convinced of my plan and persisted for a couple of months. Ultimately, I recognised that I was beating a dead horse. Regardless of right or wrong, I’d lost the hearts and minds of my people. And now, the harder I pushed, the greater their resistance.
I decided to admit my error and recommended we remove the offending elements. I did this with considerable concern for my personal position. However, with almost no delay, people swung in behind the revised plan – and were more generous to me than I deserved.
Above, I referred to a “citadel of denial”. In earlier centuries, when a besieged city was about to fall, the local lord and his closest colleagues would retire to the central citadel to make a final stand. However, once the enemy breached the outer walls and stormed the town, the game was basically over. They could starve or burn the last of the defenders into submission.
Denial is at best a citadel and, to use another architectural metaphor, at worst a pretentious folly. The only thing a leader must have is followers. Your task, therefore, is to work out what you need to do so people will give your project the backing, energy and enthusiasm it needs. If you fail to do so, eventually their resistance will beat your denial – whether you’re a Prime Minister or CEO. Wise up, admit you got it wrong, and start again.
Categories for this Potshot:
Great-leader Potshots, Create goal alignment, Lift organisational will, Build teams and relationships, Build competitive advantage, Recognise internal limits, Engage people, Be EQ-effective, Build teamwork,
Dr. Timothy Pascoe AM
PhD (Cambridge), MBA (Harvard), BE & BEc (Adelaide)
Creator, V|E|C|T|O|R Leadership®
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Comments (5)
Ken - date: 2010/06/08 05:13 pm
Dear Timothy,
Yes, badly handled because the strength of the opposition was underestimated, but why do you not acknowledge that excessively high mining profits on Australian irreplaceable diminishing mineral assets need to be shared with the population as a whole and how else can this be done other than by taxation ? Where should our first priority be,
Australian national interests or foreign and Australian shareholders of
BHP and Rio Tinto etc. ?
Remember that Spain was once the most wealthy country in Europe. Then the South American gold ran out and they have been poor ever since. The notorious ruthlessness of mining companies generally are now on show against the background of a history of environmental slackness and irresponsibility in many parts of the world, especially in third world countries with weak and corrupt governments.
Ensuring a fair tax judged by international standards of taxation the
fruits of which are used for the Australian people as a whole seems to
me to be entirely reasonable.
Regards,
Ken.
PS. I hold shares in both Rio Tinto and BHP.
Timothy Pascoe - date: 2010/06/08 02:55 pm
JP asks what you do if your plan is right but unpopular. This brings to mind that old equation E = Q x A. The Effectiveness of a decision is the multiple of its Quality and its Acceptance.
In the case of the resources tax, there are miners as well as others, who say the basic concept is OK but the assumptions need to be adjusted. However, even if this is done, Rudd and Co. will still pay the price of a poorly introduced policy. Their Q was below par - though capable of correction. Their A was super low since they failed to consult before - and even after and, may by now be beyond repair.
Its implicit in the formula that being right is only one element. And, what I believe is right may not be in the eyes of others. But, if I make a decision, which is reasonably sensible and I have taken the trouble to consult and also explain why and how Ive arrived at my decision, people may well accept it - and support what Im proposing.
In the end, leadership (like politics) is the art of the possible. Theres no point in being right unless you can convince others to accept what youre proposing. The kings of old, like the Red Queen in Alice in Wonderland, could meet resistance with a shout of Off with their heads! but today that doesnt work - except in places where I would rather not live.
JP - date: 2010/06/07 09:23 pm
Timothy, this situation raises a question: what does a leader do if their plan _is_ sound, but is unpopular? If something is unpopular but really does need to be done, then what should a leader do?
Timothy Pascoe - date: 2010/06/07 11:05 am
Dear All,
I apologise to those of you who came to this Potshot via our weekly email. The first paragraph that appeared in that email contained a repeated typo - Labour instead of Labor.
For all of us, as leaders, vigilance is the order of the day every day - whether in what we write or what we do.
Again my apologies.
Timothy Pascoe - date: 2010/06/08 08:18 pm
Dear Ken,
My point is not to argue against the tax - only its current nonsensical
structure and assumptions, plus the counter-productive way it was
introduced. Thats the leadership issue.
The more sensible mining people are also not arguing against the idea but
the same issues as above.
Im more optimistic than you about the continuing availability of
resources - not least as the ones we want change over time and new
technology opens up ever more opportunities.
Forty years ago, the Club of Rome argued that we were doomed because
resources of various kinds were running out. Some of the same people are
now the environmental hysterics.
In Spains case, it wasnt the resources that ran out so much as Spains
access to them and the way they ran their country - squandering their wealth
as the richest always do: all part of Schumpeters creative destruction. I
welcome rather than regret that.
Optimists (like me) are not right more often than pessimists, they just live
happier lives!
Timothy