Bad leadership – what the state can apparently (still) afford would ruin a company.

Just imagine that you are about to buy a new mobile phone and it is not as easy as you thought it would be, quite the opposite. The number of products on offer is generous, the budget rather limited, the decision-making process worrying. Only one thing can save you when you are spoilt for choice – professional advice. That is the reason why you are on your way to the store. After a long wait it is finally your turn and you are looking forward to meeting the employee who is walking towards you.

– “I’d like to know which features distinguish the mobiles X and Y from one anotherˮ, you ask expectantly.
– “I don’t know anything about the products nor do my colleagues; our management is currently conducting a management experiment – technical expertise is not a must for us. But my boss will certainly help you – he’s supposed to know the store well.” That is the employee’s answer. Are you confused?

The boss appears, introduces himself politely, presents the latest products, makes small talk and initially you think to yourself, “Such a competent professional! His impeccable appearance and skillful communication inspire me with confidence. I think that I’m in good hands.ˮ But he keeps on talking and you somehow lose patience… You repeat the question about the features. After all you are looking for a solution!

The communication continues as follows:
–  “Oh, you can find the technical details on our website,ˮ he says turning a deaf ear to your question.
–  “But I’ve come to the store especially because I need professional help in making a decision. It’s precisely these technical details that are important to me.”
–  “Unfortunately, that’s not my core area. I only took over this management function yesterday and I actually come from a different business segment – from the kitchen appliance industry.ˮ
–  “Then why are you in charge of a mobile phone store?ˮ
–  “Because I was asked and I have the skills!ˮ
–  “What skills are those exactly?ˮ
–  “Communication, customer orientation, flexibility, leadership …ˮ
– “But you don’t know the answers to your customers’ questions! Who can answer them?ˮ
– “My supervisor … perhaps.ˮ
– “Perhaps???ˮ
– “Well, he’s new here, too.ˮ
– “Oh yes, the experiment! Where does he come from?ˮ
– “He’s from the automobile industry.ˮ
– “Somebody must know their way around here! Please call your supervisor! I want to speak to him immediately.ˮ
– “I’m sorry, that’s impossible. He’s at a trade fair at the moment – presenting our products…ˮ

Corporate management vs. state leadership

Would you visit this store again? Would you recommend it to others? I wouldn’t.

You are probably already thinking that you have never experienced a situation like that in a real store. But you have seen it in top politics – it is everywhere. Incompetent politicians in top positions who are not up to their tasks, who do not know the solutions to the problems of their “customersˮ – the citizens – and who do not do their job well are not uncommon.

How often in the last 3 years have you had the impression that people who head institutions, ministries and even governments have no other “competences” apart from stage-managing themselves, talking about things they have no idea about and making promises that they cannot keep? And how can one keep promises that are not meant seriously or which are not realistic at all?

Crises in recent years have revealed that leading with competence and responsibility has become a “rare commodity” in Europe, as has long-term vision with a sense of reality and strategic action. Instead, we get served a lot of PR and a lot of experiments – at our expense.

Why bad leadership harms companies more than the state?

Now the question arises as to how a state can afford that? If companies were run the way some ministries/governments are, they would have gone bankrupt a long time ago.

The fact that states are more crisis-resistant than companies is mainly due to 2 things:
1. almost infinite resources and
2. a lack of competition.

1. Resources

States have considerably more resources than do companies. Not just small and medium-sized companies but large companies, too have fewer reserves that they can access when their financial position becomes critical/dramatic.

The state is like a giant whose body – the state’s assets – has been growing for centuries. “Food” – the source of revenue – is continually pumped through its arteries to nourish it. If it lacks natural nourishment, it is kept alive artificially – through national debt. In addition, state property enjoys special legal protection and privileges that make it virtually untouchable.

In principle the state does not have to do anything other than:
• manage its assets and
• keep the taxpayers (US!) in check. So that the food keeps flowing into its body.

Unlike the state, private companies are on their own. They have to fight for their business every day by satisfying existing customers and acquiring new ones. They must improve their products and services constantly and develop new ones, adjust prices, keep debt to a minimum, take care of their own employees and feed the giant – with taxes. Failure is not an option for entrepreneurs and responsible managers.

2. Competition

… the state has none, at least not in its own country. Its only “customersˮ are its own citizens, who put up with a lot and for a long time (as history shows) and only become dissatisfied when they experience the bad state leadership in their everyday lives – through a deterioration in living conditions caused by inflation, higher prices and poor supply.

The “awakening” often takes place very late and even then, the citizens cannot take corrective action directly, but can only wait until the next elections… i.e., for years.

If a company were to treat its customers the same way as in my story, the customers would complain immediately and choose another provider who is genuinely interested and capable of solving their problems. A management that fosters superficiality and incompetence at executive level sends customers directly to the competition.

What kind of leadership do companies (private companies in particular) need in the current times of crisis?

Competent and responsible leadership that decides and acts prudently and is prepared to accept conscious, calculated risks in order to make the company sustainable in the long term.

Decision-making competence – with a cool head and a sense of reality

We have been living in permanent crisis mode for years – right now many decisions have to be made, often quickly and under pressure. Even not making a decision or postponing it can have substantial consequences.

In business, poor decisions carry the risk of destabilizing the business and even ruining companies. The basis for the decision-making has to be analyzed thoroughly, arguments weighed well, and implementation measures well thought out. Especially in times of crisis it is necessary to be able to handle pressure and not make rash decisions that cause more problems than they solve. Nevertheless, it is important to act rather than deciding nothing out of fear.

For every decision the following applies: Good decisions require a solid base of expertise. That is why it is extremely important – especially in times of crisis – to have competent managers in key positions. The  personality of the manager is also important for success and stability.

Leadership with competence – from head to toe

Leaders with solid skills and experience:

• prioritize objective solutions ahead of company politics,
• assess the situation well and weigh the impact of their decisions realistically,
• strengthen trust within the company – employees are more likely to follow competent leaders than sham leaders,
• strengthen trust in the company – customers prefer to do business with competent business partners.

If there is not sufficient expertise within the company or if it is not available quickly enough, it makes sense to get it externally. But from where it really exists and not as an alibi.

When leadership fails – state vs. company

Apparently, the state can (still!) afford bad leadership.

The fact that states are more crisis-resistant than companies is an advantage for bad leadership and a disadvantage for those who are led. It takes a long time for the consequences to hit the people in their daily lives. Time passes before the country is weakened, the national economy has shrunk, the people are made to suffer. Our time. Governments come and go – we and our children pay the bills.

Wanting to run a country like a start-up may win votes in an election. But reality catches up with us all, in everyday life at the latest.

Good companies cannot afford to have incompetent managers who neither know their own job nor can do it well. Were managers and employees to behave as unprofessionally as in my short satire, the business would go down the drain.

If management fails to fill management positions with the right people this is reflected in the results – dissatisfied customers and employees switch to the competition, sales fall, the company shrinks and ultimately disappears from the market.

Would you, as a member of the company’s management, like to counteract this?

Do it better than the state!

• Strengthen the leadership culture in your company now!
• Fill key positions consistently with professionally and socially competent managers!

In clear terms this means:

1. Identify, retain and support the competent leaders you already have – both financially and mentally.
2. Get those you still need.
3. Invest in those with future potential.
4. Economize on the others.

Role model – solid entrepreneurial thinking and action

CONCLUSION: We have known for a long time that the state is not a role model for entrepreneurs and the last few years have made this clear once again. It is, however, important not to fall into a state of shock or despair but to take the helm again ourselves.

Companies have a social responsibility and must therefore take an active role and speak with a clear voice.

Keyword crisis mode – let’s stop this crisis thinking and start active action! We actually have to overcompensate the incompetence of the state. So, look for qualified people and invest in them – now is the wrong time to cut corners.

It may cost money at the beginning. But I promise you that it will save your company the expense of wrong decisions in the long run, strengthen your company and make it fit for the future.

I am there for you with all my experience and competence from over 20 years of leadership know-how.