New Year’s Resolution for Authentic Leaders

In the past, I’ve considered New Year’s resolutions kind of annoying. They simply didn’t work, or maybe I should say, I simply didn’t work with them. The excitement over the new plan whereby I would follow a new path in life as of the 1st of January was wearing off pretty quickly and soon I was stuck with the frustration over my own lack of discipline, or the strength of my old habits. The other option seemed much more attractive: don’t make New Year’s resolutions in the first place! Don’t bother with thinking about values and goals if you already know that you won’t be able to keep to them, I told myself. But that was taking the easy way out; secretly I knew that real change and positive development would not happen if not instigated consciously by me. Secondly, following through with any new plan is more difficult and important than I realized at first, but it is an indispensable part of becoming an authentic leader.

Particularly when experiencing severe problems, or after big scandals, people want radical change, immediately. Or so they say, because it seems as if they didn’t. The authors of the True North Blog summarized the gist of the two major corporate scandals of the past decades, Enron and the current Mortgage Crisis, in their article “Since Enron, little has changed.”

“Enron’s board ratified a cocktail of financial incentives and compensation contracts that promoted reckless gambling with shareholder money….Lacking the recapture of bonus payments for unprofitable contracts, executives had little accountability in deploying shareholder capital. Finally, short-term quantitative criteria displaced qualitative measures of executive performance.”

And then they go on to describe what happened rather recently:

“….In the current subprime crisis, mortgage bankers and some commercial bankers utilized similar incentives to achieve short-term gains….The result of these perverse incentives was as predictable for these bankers as it was at Enron: excessive risk-taking was rewarded to achieve short-term gains.”

The lack of our ability to learn, adapt and change, however, is omnipresent. Think back at the news about a major decrease in sales of SUVs in the USA. When gas prices were high, Americans stopped buying large cars. A lot of talk was heard about the future of energy efficient cars, the urgency to stop drilling for oil and instead invest in research for fuel alternatives. Great, the Europeans thought (who by the way pay about double the price for gas anyway), the Americans will soon adapt the view that smaller cars are cool and in turn care more for the environment. Maybe they did, but not for long because in autumn this year we read on the news:

“Despite the down economy, falling gas prices have driven consumers back to the sport utility vehicles they once gave the cold shoulder” (ref)

“And while automakers continue to shut down SUV production, some dealers say that even interest in conspicuous consumption machines like the Escalade began to rise once gas fell back below $3.50 a gallon.” (ref)

So, why are we shocked about corporate scandals, and more so if these same destructive behaviors are repeated over and over again? Why is it so hard for humans to reconsider their worldview, decide on new strategies and actually stick to them? Because the desire to change for the better, paired with the awareness of failure is part of the human condition.

Suggested New Year's Resolution for 2009

Learning means to challenge existing habits, ideas, opinions and practices; it takes awareness of one's  own way of working and its impact on the environment.  People make the same mistakes twice because they either lack this awareness of their own actions, or they don't manage to pull through with new plans, or they simply don't care. Effective leaders are aware of the fact that most people have trouble changing, but they know about the positive influence their behaviors can have. By  testing their own standpoints regularly and acting in accordance with their (adapted) values, they can set the stage for long lasting change by inspiring people to do the same.

We expect leaders to be different and so they should be: ideally, they can be role models for change. The academic literature on Authentic Leadership is very clear on the quality of 'consistent authentic behavior', referring to the small gap between values and actions of authentic leaders; it ‘simply’ means: figure out the principles according to which you want to lead, and follow through on them, every day. - "Nothing New there!" You say? - "Very true", I say, "and the proof of the pudding is in the eating..."

It is a tough exercise, to reconsider current stand points, to find new ideals and to actually act upon them over a long period of time. For everyone who wants to become an authentic leader, however, this could be their New Years Resolution for 2009. It certainly will be one of mine.

Happy, Healthy and Successful New Year 2009 to you all!