Companies Run the Way They Are Led

Posted: May 18, 2010 in On Target
Tags: , , , ,

BP’s Gulf of Mexico oil disaster and the wave of losses and government scrutiny that have washed over Wall Street in the last year and a half have something in common. Both situations demonstrate how the leaders of these companies – BP, Goldman Sachs, Lehman Brothers, and others – have been ultimately responsible for the creation and encouragement of a culture of risky behaviour without accountability.

As one of my NCOs used to say when I was in the army, “A unit runs the way the commander wants it to be run.” We therefore shouldn’t be surprised by the lack of ethics and “cowboy” mentality prevalent in some companies. The senior leadership of many, if not most, of these businesses has given license to key employees to behave in that way. If you expect and encourage needlessly risky behaviour, then you shouldn’t be surprised when that’s what you get. This is the antithesis of true entrepreneurship, which involves people that are risking their own capital and their own hide, but who are much more responsible in taking prudent risks, ones that can be justified to themselves, their families, their partners and their employees.

© 2010 Richard Martin

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