Posted: May 2009 by Dr. Nabil Elias

The Twenty-First Century began with great expectations and high hopes, but soon was marred by accelerated acts of terrorism followed by the manifestation of unsustainable organizational cultures of greed, arrogance, and self-aggrandizement. Issues of corporate governance, board independence, ethics, excessive executive compensation, wrongdoings, financial restatements, and environmental laxity, extensively covered in daily news.  Several CEOs, CFOs, and other C-suite executives along with prominent politicians and leaders of society have become disgraced.  Although this was not characteristic of all corporations, the public lost faith in its leaders.  There is no doubt that the fiscal deficit, the environmental deficit, and the social deficit, are only manifestations of the leadership deficit.

Leadership that is steeped in arrogance, excessive control, untruths, half-truths, bullying, self-centeredness, OKIYDGC culture (OK If You Don’t Get Caught), swindling from shareholders and employees, unsustainable rapacious exploitation of resources, and other illegal behavior, has brought untold misery to society worldwide.  It is not that leaders necessarily do not want to be responsible and effective, as the majority of them do.  But the predominant OKIYDGC corporate culture and groupthink have legitimized wrong doings.  Some icons of extreme success face criminal charges, some are behind bars, and some are losing their grip on their business empires.  When rampant power grabbing, unbridled greed, and complete indifference about others become the values of business, it’s time to go back to fundamentals. History is replete with arrogant and selfish leaders and leaders who were admired because of their selfless devotion to bettering the lives of others.

The consequences of the leadership deficit, aside from short term financial and power gains, are not only the loss of profits and the consequent effects on shareholders, creditors, and employees but also the degradation of the human, intellectual, social and environmental capital and the drainage of the latent energies and resources of the organization’s stakeholders. Addressing the leadership deficit is the challenge of every leader, every director, every organization, and every institution of higher learning that train future leaders.  The current view of leadership must fundamentally change not only to restore trust and confidence in organizations, but also to make them more responsible and responsive to societal needs.  The prevailing perceptions of the false dichotomies between profit, on the one hand, and social, human, or environmental responsibility, on the other, must be replaced by the emergent concept of leadership that is integrative in its views, visionary in its direction, caring in its approach, transparent in its stewardship, and honest in its dealings.  Far from the OKIYDGC culture and the unethical and illegal actions it engenders, effective leaders must set the tone for their organizations to do what is right.  We need leaders who are visionary, steady, and fair; leaders that can engender trust and tap the latent organizational knowledge and talent; leaders that see their work as a service not only to their shareholders, or direct stakeholders, but also to humanity at large.

Small countries with small economies have, for generations, experienced the effects that a single company can have on the lives of many of its citizens and the havoc it can create in their national economies.  When the largest economy in the world is experiencing, for the first time in its history, the TBTF phenomenon (too big to fail), it is time for the leadership in all large organizations to own up to its responsibility. Far from growth and control being the ultimate goal of a CEO, responsible leadership should manage a transformative process of scaling down the size of each business through spin-offs, sale, or reorganization to create sustainable leadership of sustainable organizations in a sustainable society.

I would like to hear your views regarding the leadership deficit and organizational transformation toward sustainability, particularly if you are engaged in this process or are considering these issues. Please contact me to further explore these topics or for details of leadership initiatives that address the concerns I have highlighted.