WORLD ACADEMY OF INFORMATICS AND MANAGEMENT SCIENCES
ISSN : 2278-1315
do it and how do our clients benefit anyway? These are
HOW IMPORTANT IS VIRTUE IN MODERN
typical rejections to requests from finance teams wanting to
LEADERSHIP?
upgrade their technology, delegates to the World Congress
By: Jo Owen, Auvian Press
of Accountants (WCOA) heard on November 5, 2018).
If capitalism is to be sustained, good leaders must rise to the
How do finance teams make an argument for an automation
challenge of striking the right balance between effectiveness
project? How do they gain consensus from within their
and virtue
organization?
I have spent more time than is wise with tribes around the
First, create awareness of the challenges, says Thomson
world. In tribal societies, the leader leads for the benefit of the
Reuters Director of Sales and Customer Success, David
community. In the struggle to survive, tribes cannot afford to
Allen.
have leaders who are in it for themselves. Capitalism has
“Document the challenges your team faces on a day-to-day
changed all that. The main role of a business leader today is
basis”, he told delegates in Sydney at the World Congress of
not to serve the community.
Accountants (WCOA).
From the earliest days of capital- ism, there has been a
A compelling business case needs to drive the point that
struggle over the purpose of leadership: who does the
new technology will be “a must have” rather than a “nice to
capitalist leader serve? Do leaders serve themselves or the
have”, says Allen.
community? The fundamental battle is whether good leaders
Arguments can be made around minimizing time spent on
are simply effective or whether good leaders are virtuous.
compliance, leaving time to focus on strategy or that the
Ideally, good leaders are both effective and virtuous. Ideally,
technology can be scaled to keep up with an increasing pace
there would not be war, famine, disease and poverty. As
of change.
leaders we may strive for the ideal but meanwhile we have to
It will deliver more accurate data and therefore improve
deal with reality.
analytic capability and enable peer group benchmarking.
The brilliant success of capitalism in creating wealth has dark
Bad systems have an impact on morale, output of data and
foundations. President Roosevelt raged against the
how the business presents in the market, Allen adds.
“malefactors of great wealth”. These are the leaders who built
“If you have bad systems you need good people to be able to
the dark satanic mills of the Industrial Revolution, and made
work around those systems and those good people will not
great fortunes in the process.
last if those systems continue to be bad”, he says.
In 1835 Balzac wrote: “behind every great fortune lies a great
Allen says in marshaling their arguments, the finance team
crime”, a phrase repeated in The Godfather. The rage against
should:
the rich is not a new phenomenon.
a. Outline the need and opportunities from the project
The “greed is good” form of leadership continues. It is given
b. Define the cost
ample justification by the shareholder value revolution started
c. Define the solution and how to measure success
in the 1980s by Professor Alfred Rappaport of Kellogg GSM.
d. Describe the implementation plan and risks
Originally, this was intended to align leaders’ and
e. Outline what is required and how it could be
shareholders’ incentives. It supported the legal fiction that
funded
leaders serve shareholders.
f. Describe the support needed to ensure success.
In many firms, leaders serve themselves. They may not build
The planning process needs to identify all the stakeholders
dark satanic mills any more, but they will do what it takes to
and their drivers. The IT department wants to be involved
maximize their own wealth. They will happily make taxable
from the start because it needs to plan for projects. Legal
profits disappear into tax havens and grind zero hour
teams need to be informed because they will be dealing with
employees down with algorithms that make old fashioned
the deliverables in contracts.
time and motion managers look benign.
Allen says procurement departments are increasingly
But capitalism has also always had ‘enlightened’ leaders who
involved in all deals, ensuring due diligence has been done.
looked beyond money to moral purpose. The great Quaker
Missing steps such as working with one only vendor “can
families of the 19th century are prime examples. The Fry,
really set you back” when procurement wants three quotes.
Rowntree and Cadbury dynasties all set up chocolate
He suggests writing an RFI, or request for information, to
businesses as part of the temperance drive: being a chocoholic
send out to potential vendors, detailing your requirements,
was deemed to be better than being an alcoholic. Their moral
particularly what is essential. Using an RFI means the
purpose extended to the way they treated their workers by
vendors must give a fairly standardized response to the
creating model towns such as Bourneville.
questions and enables you to refine what is important to you
In the 21st century the battle between effectiveness and virtue
early.
has intensified for three reasons. Each reason has
Identify advocates within your organization, who will
consequences for the future of leadership and business.
typically be outside your team but ready to work with you
Externalities Society is becoming less tolerant of the problem
closely and argue your case at management meetings.
of ‘private profit, public loss’. This ranges from bailing out
"Bring in your legal team early. They will make sure vendor
bankers from the public purse to remediating the problems of
promises are captured in your contract", Allen says.
pollution. The result is, inevitably, ever more regulation to
When you are eventually pitching to the CFO or Managing
control these excesses.
Director and the discussion is going well, he says someone
You can regulate compliance, not virtue. Inequality Fifty
will ask, “What’s in it for our customer?”
years ago CEOs of S&P 500 firms earned 20 times as much as
“It is really important at that point that your answer is
the average worker; now they earn 270 times as much. If real
backed by an advocate within the business”.
average earnings were rising fast this might not have
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