Why I Hate “Leadership Vision”
by Miki SaxonThe leadership industry dotes on the idea that visions are what make leaders, since they influence people, and that visionaries aren’t like you and me and require special handling.
It’s CEO visions—those rosy predictions, high hopes and self-deluding prophesies—that fill annual reports that sway analysts.
From Business Week: Are stock analysts swayed by an annual report’s CEO letter to stockholders? Yes, concludes a forthcoming study in Organization Science. Researchers from Pennsylvania State University and other schools looked at 367 shareholder letters written by new CEOs from 1990 to 1999—giving each leader a “charismatic vision” score. To assign ratings, they scrutinized the texts for moral, ideological, and emotional characterizations of future plans and past mistakes. They also counted the number of times such words as “believe” and “commitment” appeared—along with team-oriented terms like “we” and “our.” Their finding: the more charismatic the text, defined in this way, the more likely analysts were to issue a “buy” for the company. Such language also led to off-the-mark earnings forecasts from analysts. While the decade studied coincided with the dot-com era, when analysts often said “buy,” Penn State management professor and co-author Vilmos Misangyi believes the findings also apply to the current economy, as uncertainties may prompt a strong reliance on a business leaders’ words. “If anything,” he says, “I would expect stronger effects today.”
Keep that in mind when you invest the paltry amount you have left after the most recent Wall Street vision decimated the economy.
Why is it that we accept as intelligent gospel visions of credit default swaps and derivatives from guys in $3000 suits, but would consider the same ideas as ravings if they came from a smelly guy wearing dirty clothes?
How much of so-called leadership vision is form and how much substance (or the result of a substance)?
And even when the substance is there, what is it worth when it’s left as a vision with no operational plan?
Read this post from Steve Roesler for a great example of vision sans plan.
Your comments—priceless
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Image credit: sjtodey on sxc.hu
August 7th, 2009 at 8:17 am
This is a good article. It’s a fine example of why people should learn to invest on their own using a fundamentals driven investment process based on the underlying value of the company … or find a source of investment advice that is based on such.
It’s not just the analysts; but, the mutual funds so many people are pumping their money into, that invest based on such “charismatic vision.”
August 7th, 2009 at 9:46 am
Hi Jacob, what you say is so true. Vision isn’t a reason to invest money, nor is it a reason to invest self.
Vision can be from a mind with the ability to make it happen (Steve Jobs, Jeff Bezos), a mind driven by greed (Richard Fuld, Jeff Skilling), a mind driven by love for the sound of its own voice, or a controlled substance.
It’s our responsibility, whether investing or working, to decided which is which and not just buy in blindly.
Thanks for stopping by, it’s always nice to meet new readers.