Its a maxim, a true saying, that if you want quality, you have to pay for it... We pay good money for supposedly good leaders. Otherwise we get... monkeys.
Thus companies and corporations pay exorbitant amounts to their CEOs, MDs, and (some) Government leaders do likewise. And if the company does well - and produces an outstanding profit -surely you have reward the leaders responsible!
Yeah, well that worked in America recently, didn't it? The boss of Lehman Brothers earned 500 million dollars in bonuses during his 20 year tenure. Let me spell that out:
Richard Felds, CEO of Lehman Brothers, earned $500,000,000,000.00+ in bonuses and pay. And during his watch, the 150 year old company, made outstanding profit margins - then went bankrupt. WTF?
Franklin Raines, the chairman of US Federal Mortgage giant, Freddie Mac, quit from regulators queried him on accounting irregularities that led to executives being paid bonuses. In other words, he (may have) overstated earnings so that he could get paid a bigger bonus. The regulators are now suing Raines to recover the 90 million dollars ($90,000,000) that he received in bonuses due to his creative accounting system. Well, the company has gone bust. But does he care?
Its not just in America. Over in Australia, sometime back, the boss of NAB walked off with 17 million dollars in severance pay, after backing a scheme that lost that bank 100 million dollars or more. Argh, that's better than robbing the bank.
In the olden days, such losses would have resulted in a coup. And the person in charge getting his head handed back to him in a platter. These days, head hunters find him another cushy job. Frankly, these idiots ought to be tarred and feathered - and have their bonuses rescinded.
The heart of the problem - is the lack of accountability in the system. And a system which is corrupted from within. How can you reward leaders with cash for short term successes? How easy would it be for some smart person to manipulate the accounts so that this financial year - they would record a massive profit instead of a loss. The share holders pay him a big pay out and he rides off as fast as possible into the sunset before anyone finds out. The smarter ones will hide the losses and milk the company for all its worth like parasites. Do they care? No, they get paid in cash or shares which they can immediate sell.
There is no incentive for the leaders to put into place - strategies - that will benefit the company in the long term. What all corporations should do is to pay all executives the bulk of their salaries/bonuses with non-saleable shares in the companies. They get their rewards in annual dividends but not in one big lump sum. You have to get executives to have a vested interest in the long-term future of the company, otherwise this sort of rorting would continue.
People also have got to get it out of their heads - the hero principle, ie. that it will take a single Bruce Lee or Rambo to defeat the enemy army. Yes, in Hollywood with stunt actors and a script that guarantees victory. But in real life, not so simple.
True, a Great leader can do Great things. Military history is replete with examples. Napoleon, Alexander the Great, Hannibal, Genghis Khan, etc.. But people fail to see the obvious. They all ultimately failed to establish anything permanent.
Let me put it another way - without a good system - long term success cannot be established.
You need a good ethical corporate culture that rewards initiative, merit, cooperation and capacity to adapt and learn, to innovate - at all levels, workers, middle managers, logistic staff, for any organization to have long term staying and success power.
Example: the Great Carthaginian General Hannibal - he was truly a gifted warlord. His adhoc group of soldiers and mercenaries fought Roman armies twice their size and defeated them. In three big battles - ending with the climatic Battle of Cannae - he practically wiped out Rome's Armies. However, the Carthage Govt was corrupt. They refused to send reinforcements to Hannibal because they feared he would grow too powerful.
Rome - meanwhile - learnt from its mistakes - reorganized its army, got rid of its incompetent commanders and eventually defeated Hannibal. That's what makes a system great - that it can learn and innovate from its mistakes. From then on - Rome went from strength to strength - and eventually conquering the whole of Europe (that was worth conquering). It established an Empire and Civilization that still has an influence on us after over two thousand years. Carpe Diem!
But how was it possible? Through the efforts of one man. No, it was the system from the ordinary legionaries, to the Centurions, to the engineers, etc... A good system channels the efforts and skills of every individual. With it - Rome took on the barbarians who were still fighting as individuals. The Romans fought as a well trained team with a plan. A good plan. One legion, one thousand Roman soldiers, would fight against 50,000 barbarians - and win.
But continuous success makes the system - ironically - weak to corruption. People take things for granted. The leaders learn to manipulate the system - entrench themselves in positions of power, and reward themselves and their families whilst squeezing out the lower and middle classes.
They use the claim - if you pay good money - lots of money - you will get better leaders. And thus Rome was saddled with fat cat Emperors like Nero who rewarded themselves lavishly and cared only for short term glory, and personal selfish triumphs. If they didn't win the battle - they'd get the historians to spin glorious exploits. The Romans got tired of fighting in the army - and paid foreigners to fight for them. Pay them well.
Eventually the culture of corruption irresistibly spreads downwards. And finally when the whole organization is corrupt - it will be unable to withstand any major threat.
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