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PROFIT, SOCIAL RESPONSIBILITY & CORPORATE PERFORMANCE:A Collection of Essays Using the Finance Industry as the CaseTable of Contents
Predator Prey Symbiosis: Crisis, Leadership and Values
 
2Burn the Witches: Private Outrage, Public Policy and Butterfly Effects 5Helmet Laws vs. Adult Supervision: Re-Regulation & Finance Industry Futures 9Firestorms, Finance, Futures: From Sociopathic Dysfunction to Value Creation 12Leaders, Leadership & Culture: Crisis, Values and Performance 16READINGS COLLECTIONS 20
 
Profit, Performance and Social Responsibilities
Page 2 of 24
March 08, 2009
Predator Prey Symbiosis: Crisis, Leadership and Values
http://llinlithgow.com/bizzX/2009/03/crisis_leadership_leaders_and.html
 This post is something of a bookend for the last one (
GoodBoats, Good Captains: Applying the Investment Mantra forProfit
) which dealt with screening and analyzing companiesthat are likely to do well. If it wasn't perfectly clear a criticalfactor is the honesty, integrity and leadership of management,particularly the executive team as a whole. Here we're goingto dive a tad deeply into the consequences and causes of badmanagement. In the readings we use the terrible example ofthe sturm und drang over Wall Street bonuses as our jumpingoff point for a deeper exploration of executive leadership.Make no mistake about it - it's a critical factor, Wall St. as awhole with some major exceptions violated both fundamentalprinciples and their own long-term self-interest and broke therules of social responsibility. A strong, even harsh conclusion? Perhaps but we think if you'll follow us thru on thearguments the logic is worth considering. And matters asmuch to you as a tribesman voting on who will be the tribalwarchief and take responsibility for his life. The cartoon, drawn from this week's Economist on the implosion ofBear captures the situation without further discussion IOHO.
Predators vs Prey: a Balanced Ecology
We entitle this post Predator vs Prey because the thinking inpopulation biology and ecology that describes the interactionsbetween predators and prey nice represents the inter-actionsbetween aggressive pursuit of profit and a focus on careful,cautious focus on value. Think of the blind pursuit of profit, inthe short-term, as being the rough equivalent of a predatorspecies so blinded by kill-lust that it reduces the prey speciesbelow a sustainable minimum. These charts are drawn fromthe Wikpedia discussion of the Volterra-Lotke equations on P-P interactions; one of the first and sustained excursions intomathematical biology and still in use today to some extent.The top chart shows how the cycles in population of the twospecies interact over time. When the prey population gets toolarge because there predator species is too small there is apopulation explosion followed by a surge in predators. In otherwords when the picking's get too easy the predators get moreaggressive. The problem of course, say in the secondcomponent, is that if the population of prey falls below minimallevels the population won't renew itself and the entire systemcollapses. Hmm...making more sense now.
 
Profit, Performance and Social Responsibilities
Page 3 of 24
Looking for the Balance
In any human socionomic ecology mostfolks would like to have a decent job (fairday's work for a fair wage) but the systemas a whole requires people who are willingto be both aggressive and step up and takeresponsibility for companies and otherorganizations and institutions. For a healthyinstitution or a healthy total system the twopopulations need to be in some sort ofbalance or excess complacency willcollapse it while excess aggression willdestroy it. The key driving questions are thetradeoffs between Interests and Focus (ortimeframe). Most folks can get away withmost of their efforts directed in the short-term and their own narrow self-interests. Ilike to think of us as Hobbits.Then there are those who focus on the BigPicture, that is on broad interests but don't inject a strong sense of reality into their thinking. Contrawise there arethose who's focus is strictly on their own short-term self-interest and aggressive and responsible behavior seguesinto excess predation. What's required is a large enough portion of the population who aggressively pursue abroader set of interests. This is the group one would choose executives from - those prepared to act in theinstitution's broad interests, balance them against their own immediate gains and be prepared to sacrifice forlongevity, stability and prosperity.
Leadership is NOT an Accident
Lest you think we're talking outof our hat on this we point youto the feel-good story of theyear - the landing of Flight 1549in the Hudson. We've all cometo know, at this point, howmuch of a miracle that was. Butif you click on the graphic you'llbe treated to a 2 minutesimulation that plays out in real-time to give you an idea of justhow little time these guys hadto make the right decisions inno time at all.That capability was not createdby accident but was the resultof years of training, experience,thinking things thru andpreparing for that one momentwhen it was all on the line. Incrisis we all react as we'retrained, whatever the source of
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uploaded a new revision for this document (#2)

11 / 19 / 2009

uploaded a new revision for this document (#1)

11 / 19 / 2009
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