One of the most important qualities in good business leaders is organizational and social skills, that is, the ability to rally a diverse set of people to attack and solve the complex problems that all institutions face. Wikipedia emphasizes this point in its definition of leadership “ . . . as the process of social influence in which one person can enlist the aid and support of others in the accomplishment of a common task . . .”
Social leadership qualities are particularly important in today’s increasingly distributed organizations, where many, if not most of the people that leaders have to bring together do not work for them. For example, a matrix organization led by a small team is often the most practical way to launch a new company-wide venture, especially one based on a disruptive innovation that doesn’t yet have a natural home within the existing organization.
Moreover, as enterprises increasingly rely on business partners for many functions once done in-house, one of the major organizational challenges is how best to manage the evolving virtual enterprise in such a distributed model. Good business leaders thus have to be effective at managing their distributed operations across a network of interconnected companies - a veritable business ecosystem. They must be able to have good working relationships with the people in these companies - some of whom might be competitors as well as partners - and be able to collaborate and compromise with them as appropriate.
I thought of the qualities it takes to be an effective leader of a complex organization, whether in business or government, when reading about the attacks on President Obama for the compromises he made with Congressional Republicans on the extension of the Bush tax cuts. As with the health care overhaul passed earlier this year, few people were happy with the overall tax cut bill. I personally agree that extending the cuts for the highest income levels makes little sense. Those monies could have helped fund high priority projects, such as badly needed improvements to the nation's infrastructure or increased investments in research and innovation.
When it comes to complex bills, in which different factions generally hold widely different positions, considerable compromise is required to achieve a bill that commands enough support to finally pass. The key question we should ask is whether the compromise bill, imperfect as it might be, is better than no bill at all.
That’s the question I asked myself with the health care reform bill. I concluded that the status quo was unacceptable, and years from now the country will be better off as a result of our having passed health care reform in March of 2010, much as the US is better off for having passed the Social Security Act in 1935, and the Medicare and Medicaid Act in 1965.
As a natural consequence of the increased polarization of the two parties since the 1980s, we are living through times of considerable political volatility. Before that time, each party had more of an ideological mix, and it was more common for like-minded politicians in each party to collaborate, compromise and get things done.
Such collaboration and compromise across party lines is rarer now, and as a result, politics is often driven toward the more ideological edges rather than the middle. Many, in fact, are strongly opposed to the give-and-take, compromise and triangulation needed to find a common middle ground between competing points of view. Consequently, we have a political system that is not only volatile but often gridlocked.
“ ... the tax deal approved by the House late Thursday has given rise to an emotional debate among Democrats in Washington and online. Is President Obama himself a triangulator? Has he become the kind of compromiser he once disdained? Perhaps the better question might be: So what if he has?”
With both conservatives and liberal politicians, the tension is between holding out for one’s ideological principles versus doing the best you can within your existing constraints. But this tension is at the very core of politics: “a process by which groups of people make collective decisions.” As Bai points out, this is what governance is all about.
“In striking his tax deal - which extended cuts for the highest income levels and reinstated the estate tax at a much lower rate than sought by liberals, while also extending unemployment benefits and establishing a new payroll tax holiday - Mr. Obama effectively said that the perfect could not be the enemy of the better, and that this was the best he could do.”
“The problem with this definition of triangulation, though, is that it comes awfully close to an indictment of governing, generally. Some political compromises, of course, are craven or even disastrous; there’s a reason that the words “appeasement” and “Yalta” remain part of the lexicon. But to disdain pragmatic compromise is to become unyielding and self-satisfied in the service of theory, rather than creative in the service of your agenda.”
It is thus not surprising that governing - being responsible for actually running a city, state or country - tends to make political leaders more pragmatic. The most polarizing national politicians have typically been legislators, like Newt Gingrich, not presidents, governors or mayors. When Sarah Palin chose to become an author, media personality and leader of the more ideological wing of the Republican Party, she resigned her position as governor of Alaska, because running the state would get in the way of appealing to her national base.
Those of us who want President Obama to improve his relationship with the business community and bring more people with actual business experience into his administration are hoping that such steps will make the President more pragmatic and better able to address the very complex problems the nation faces. We are hoping that such steps will make him a more effective leader, better able to get things done.
And, as Matt Bai points out at the end of his column: “Such compromises [like the tax deal], ideal or not, are the building blocks of responsible governance. If that makes Mr. Obama some kind of triangulator, then it could also make him a successful president.”