Many analysts have suggested stocks that could benefit from President Obama's policies. But would it be better to find CEOs who lead people in a manner that's similar to his approach? If you believe that the president sets the tone for the rest of the country, the answer may be yes. Under a CEO who thinks of himself as the decider, investing in companies whose CEOs who lead by command-and-control might make sense.
But Obama's approach is different -- he inspires people, surrounds himself with the best, and listens to them before forming his opinions. And rather than trying to divide the world between those who agree and oppose him, Obama tries to find the center of an issue to bring along as many people as he can. I wonder whether this more self-effacing approach to leadership comes from the Midwest where patting yourself on the back is considered poor form.
Are there any CEOs who follow this approach to leadership? I can think of one -- but there may be others. James McNerney, Boeing (NYSE: BA) CEO, seems to follow the Obama approach to leadership in many respects. While McNerney may not have Obama's eloquence (and very few do), he does have an ability to put people at ease and encourages them to debate issues and find solutions to their problems instead of waiting for him to give them the answer.
This approach is as good for business as it is for government. How so? It's simple really. If you believe that people are smart then it makes sense that putting their minds together to grapple with a problem will yield greater insight and better solutions.
Moreover, by working on solutions themselves, instead of waiting for their leader to decide, people own the solution and they work harder to make it work. Finally, this approach is better because it makes people far more productive -- they are worth much more if they use their brains than if they get paid to sit at their desks and wait to take orders from the person in charge.
While the fit between the president's and CEOs' leadership styles should not be the sole basis for investing in stocks, I think it can provide a useful starting point -- particularly when a change in leadership opens up opportunities for new leadership styles.
Peter Cohan is President of Peter S. Cohan & Associates. He also teaches management at Babson College and edits The Cohan Letter
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Reader Comments (Page 1 of 1)
11-09-2008 @ 2:12PM
Lelia Thomas said...
It would seem to me that it is a bit early to be making statements like, "Obama's approach is different -- he inspires people, surrounds himself with the best, and listens to them before forming his opinions." Obama has not yet even chosen his entire legion of cabinet members, much less made many, if any, choices that have actually changed anything in America. I'm not saying he won't, but I am saying it is extraordinarily early to say that his leading style is superb, considering we have not seen him in action in one of the most prestigious jobs in the world. I cannot, however, say that I am very surprised that an academic would jump to conclusions that may or may not ultimately be true.
I agree with you that it would be good if more top level businessmen acted more ethically across the board. However, it is not a requirement that they be mindful leaders to make good products; they just have to be leaders, period. (Although, more assuredly, it would benefit their business if they were kinder and more thoughtful.)
What will be interesting in all this will be whether we see our prices at stores rise dramatically, because Obama will be taxing the hell out of the big moneymakers. Obama's economic policy, while a little better than McCain's (I thought), was precisely why I didn't vote for him and voted third party instead.
Only time will tell if Obama's true leadership skills are any good and whether his ideas are going to help, keep the same or hinder business.
11-10-2008 @ 12:03AM
Gary E. Sattler said...
What does it say, to the discerning thinker, that Obama's choice for Chief of Staff is described with words like "foul mouthed" and "ferocious."
Obama has promised to heal the divide between the parties. Is Rahm Emanuel the right guy to accomplish that?
Or will we see more partisan fighting in the prospering of a socialist Obama agenda?
http://www.reuters.com/article/topNews/idUSTRE4A57H420081106?feedType=RSS&feedName=topNews
11-09-2008 @ 10:38PM
Iridium said...
Wow just wow. If you mean CEOs that make lots of empty promises and tell people that they are going to work for them. Then behind close doors you work as hard as possible to screw them over while enriching yourself and your closest friends. Well then Obama and people like him are your guys.
I think we already have plenty of CEOs like Obama. That is one reason why we are in the posistion we are. Being an eloquent speaker usually leads to being able to mislead people very well. People become so enamored with your ability to speak to them that they forget to actually look beyond the words.
11-10-2008 @ 2:05AM
Linda said...
Considering he continues to talk about about what dog he'd like to have in the white house is further example of just talk. The critical Economic Summit was no place for such trivial issue when so many face loss of their homes or jobs. Diversion from REAL ISSUES ... just like the campaign season. Seems it is his hot topic .... and yet just another decision he seems to talk about yet can't seem to make. Some leader.
11-10-2008 @ 8:16AM
Jason Flare said...
Peter Cohan, please say you are kidding about Obama's leadership style. The, "Yes We Can" slogan is one of the most disempowering slogans to come down the pike in years. Remember JFK's was, "Ask not what YOU..." The YOU being being understood as singular by the listener. The WE in, "Yes We Can," leaves a world of room to blame someone else. But of course, time will tell.
11-21-2008 @ 1:18AM
jay said...
I agree with gary. I"m an obama supporter, but that was a horrible choice for a chief of staff.
I mean ffs, the guys DAD was in a militant zionist group labeled as a "TERRORIST ORGANIZATION" by the U.K. for killing lots of British citizens and palestinians in multiple terrorist attacks.
I don't think a "foul mouthed" "ferocious" politician raised by a father like I described above is what we need in a position like that to help heal our relations with the middle east and to bring both parties together to help heal our own country and bring it back to prosperity and power.
1-05-2009 @ 12:01PM
Connie said...
It's obvious that No Drama Obama practices The Seven Habits of Highly Effective People. Unfortunately, he can't perform miracles. There will be massive job losses in the coming months. We have no one to blame except ourselves. Past generations funded wars with savings bonds and planting gardens. Our generation had tax cuts and disposable everything. Obama has a narrow window of time to prevent total financial collapse. He has a job few can possibly do. Hopefully, he can pull together our best and brightest people. We don't have another four years to waste.