I’ve had the great good fortune to spend a lot of time recently researching and writing about one of America’s great leaders: Dwight D. Eisenhower, known to one and all as “Ike.”
The premise of my book, LEAD LIKE IKE: Ten Business Strategies from the CEO of D-Day is that no one ever had to run a bigger business project under harsher pressure than Ike did when he and his Allied forces invaded Normandy on June 6, 1944. Given that a lot of folks in the business world are experiencing a lot of pressure these days, it seemed that we could learn a lot from the ultimate high-stakes manager.
Today’s lesson regards regulatory pressure. Rep. Barney Franks (D-Mass.) and Sen. Christopher Dodd (D-Conn.) have been pushing for regulatory reform since at least 2008 that would clamp down not just on investment banks but any corporation that trades shares on one of the stock exchanges. Then-Senator Barak Obama agreed with them, and just last month President Obama announced reforms that would go even further.
I won’t bore you with the details of the new and revised regulations. Let’s just summarize this way: Liberals and most Democrats favor the regulations. Most businesses and Republicans do not. The latter duo has fought tooth and nail to stop any reform, acting as if the market meltdown of late 2008 and the subsequent, gigantic Federal bailout never happened. Their attitude seems to be if we promise not to misbehave in the future, isn’t that enough?
While nothing in politics is inevitable, it seems likely that some form of new regulation will come to pass. Probably nowhere near as tough as Messers. Obama, Frank, and Dodd would like, but nowhere near as easy-going as Republicans and the folks in Corporate America would like either.
Instead of opposing every measure of regulation, maybe the anti-reform duo would be better off if they joined the reform team.
When Ike first took the job as CEO of D-Day, his board of directors (FDR, Churchill, Stalin, and the senior military commanders of the U.S. and the U.K.) wanted him to invade north Africa. Ike hated the idea — he was sure it would delay the invasion of France and hinder the ultimate success of his organization. But once it became clear that he was going to invade north Africa, Ike went at it with all of his considerable energy and intellect. The invasion was a success and provided valuable learning and experience for Ike and his organization.
If Ike had behaved like the anti-reformers, he would have lobbied his bosses, and lobbied some more, and used every delaying tactic in the book to avoid the African invasion. By the time he finally was forced to invade, it might have been much, much later and with a halfhearted effort. The subsequent invasion of Normandy might not have taken place until 1945 or even later. And the cost wouldn’t have been measured in lost profits but in death.
Back in the early 1930s, FDR and a Democratically controlled Congress created a number of securities exchange regulations and the SEC. Before those reforms were in place, 10% or less of the U.S. population held shares of stock. At the end of the 20th Century, 52% of the country’s population were shareholders. Now it took a long time for that growth in stock ownership to happen, but would it have happened at all if the reforms hadn’t been imposed creating fair and open markets? If through all the decades after the start of the Great Depression, folks on Main Street felt the markets were a fixed game — would stock ownership be so widespread? Would Corporate America be tapping into the huge, available funds of American Moms and Pops?
So, the moral of this story is: Be Like Ike. Don’t fight the inevitable. Join the team and make the best results happen.