Nature hates a vacuum. And where there is a vacuum, nature, including human nature, will move aggressively to fill it.
Recent weeks have seen much wailing and gnashing of teeth over the government move to cap executive pay at companies that still have bailout money. While I tend to be a free markets guy by nature, I can’t help but wondering, “Where were the boards of directors of these companies?”
Big pay packages for executives who are leading companies hemorrhaging money have become commonplace. “We need the talent to get out of this mess” goes the argument. But these aren’t people whose quality of life, ability to fund their children’s education or retirement depends on their salary. If the return to shareholders is long term, why isn’t the benefit to executives long term?
The comfortable — and dangerous — philosophy of “we always have done it this way” clearly hasn’t worked. If the governing bodies of organizations asked harder questions and governed more actively, then government wouldn’t have to fill the leadership vacuum.
What questions did the board of Bank of America fail to ask that would have changed its way of governing? What questions are leaders not asking because an answer would mean letting go of “we have always done it this way”?
What questions are you and your team failing to ask because the answers might upset the direction of the organization or project you lead, and at what cost to your organization?
Neglecting to ask the right, sometimes the hard, questions has cost billions of dollars in lost productivity and immeasurable organizational pain. Often the mirage of the easy road is the beginning of the end. If that seems to strong a statement or if you are certain that you are courageously asking all the hard questions, pick up a copy of Jim Collins’ latest, How the Mighty Fall (link to the right). The roots of major collapse, according to Collins’ research, are found in a time when the company is growing, busy, profitable and perhaps a little too certain of themselves.
No organization survives and prospers under a leader who is unwilling to let go of habit, inertia and the false safety of “We have always done it that way.”
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