The Most Common Leadership Failure
The executives who run the auto companies can't be faulted for lack of intelligence, negotiating skill, drive or even creativity. Their failing is the most common of all leadership failings: failure to marshal support for investments that won't pay off until the long-term. For decades the temptation of short-term profit won out over the need to innovate and invest in ways that would build their long-term competitive strengths.
Warren Buffet, in one of his letters to his Berkshire Hathaway shareholders, once wrote:
Every day, in countless ways, the competitive position of each of our businesses grows either weaker or stronger.... When our long-term competitive position improves.... we describe the phenomenon as "widening the moat." And doing that is essential if we are to have the kind of business we want a decade or two from now. We always, of course, hope to earn more money in the short-term. But when short-term and long-term conflict, widening the moat must take precedence.
U.S. auto executives let their competitors widen the moat instead and now that their own options have narrowed they need their customers and taxpayers to carry them across it. Their critical value to our economy dictates that we find a way to do that, but it is the least efficient and effective of the many options once, but no longer, available.
Posted by: email@example.com | December 10, 2008 4:49 AM
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