Brexit : An Important Learning for Leadership
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Brexit : An Important Learning for Leadership

Brexit has raised a very important management issue - whether leaders should ask for a referendum, when posed with  difficult decisions.

Most great leaders in corporate life will sometimes have to take a difficult decision for their companies based on facts.  If the decision is likely to be controversial does it mean that an easy way out is to be democratic and ask the company to vote?

Referendums are double edged swords that are not worth taking a gamble.  While putting a referendum to vote itself is a high democratic  process, one has to assume that very often people don't know what is good for their own company or country.  This is because leaders have better information about the results of a decision than are the ordinary people, who may take decisions based on emotion.

Brexit is a case study on why leaders should not put referendums for a vote.  Being democratic may not always be the best thing for any company or country.  If one analyses how the vote for Brexit was distributed this comes clearer.

Source : yougov.co.uk

As the chart shows the people who voted to leave the European Union don't have to live with the impact of this decision for very long.  In fact the result of the decision really impacts the people who have to live with this decision for the next 52-69 years.  So in a case like this the decision is unfair to those who have to live with the effect of the Brexit vote.Also according to yougov more people came out to vote in the 'Leave' areas tilting the decision in their favour.  Another uncontrollable but unfortunate fact. 

As with countries, so with companies

I have often seen CEOs who are not willing to take a strong decision put something to vote on the conference table trying to make it a senior management decision for example.  Should something go wrong for the  CEO he can claim that everybody decided and it was not his decisions alone. By putting a difficult decision to vote, the CEO absolves himself of the negative effects of the final decision taken.  On  one hand he can claim that he was being very democratic and therefore would be difficult to fault.  But often, it only shows that he was bad at taking  difficult decisions and leading the company.

Brexit also raises the important question of whether countries can't think like companies.  De-merging is perhaps a more difficult and painful process, than merging. Besides commercial issues become more important than ideological issues when companies take similar decisions.  In a company decision emotion has no place or weight.  But perhaps in country decisions, emotions come into play.

Why we  elect Leaders

 Why do we elect people to represent us at any level of government? The answers are probably myriad, but most of them would seem to include the passage of legislation that permits our elected government to act on our behalf. We all have preferences for how government should work and what legislation we would like to see passed. Sometimes our governmental bodies meet our expectations and sometimes they don't. This is part of being part of a democracy. The phrase "you win some, you lose some" is an apt description of how voters view government.

So when we elect leaders, we should trust them to take decisions on our behalf rather than want to take them ourselves.  This is because we may not be the best informed or educated on the matters affecting every issue.   We expect our government or our CEO or board of directors to be the best informed on all matter. They are the panel of experts. And they need to decide for us.  

Leaders and Managers

But if a leader is ideologically lite then often he is not the type to make a large sacrifice.  True leaders are willing to weather the storm and lead a revolution for something they believe in ( Mahatma Gandhi, Nelson Mandela & Martin Luther King )  Good managers like to walk the middle path, thinking that they might become more popular.  They are good at achieving a balance of opinion. More often than not they are not willing to take a decision, and then the situation usually tides over and people forget that a decision hadn't been taken.  Because usually it creates a new situation that needs a new decision.   

Company gain before personal gain

The other redeeming quality of a great leader is that he will put his company's interests before his own.  And while he may be willing to take a gamble, he will not gamble his company's future for a possible benefit to his own future.  Most greater leaders put their company's or country's interest before any personal or selfish interest.

To conclude,  asking for a referendum only means that you have delegated your decision to the people and absolved yourself of the implications - a weak way of solving a difficult problem.  Certainly not the quality of a great leader, but could well be how the weak but adept manager is known to handle difficult situations.

 

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Also read my post on Brexit The Majority Fallacy

I don't think Cameron was seeking a referendum for the democratic reasons you say. He sought one to keep the extreme wing of his own party happy. That is why he could not possibly continue once he had lost the vote. As regards sovereignty, should we also demand full sovereignty over defence and foreign policy and leave NATO?

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Robert Gregory

Independent Consultant, Lecturer, Leadership Coach.

7y

true lesson on immoral discredited leadership (indluencing followership) all the major "leaders" of Brexit have abandoned their leadership positions, having led the people into the uncharted wilderness left them on their own. Their claims about money redirected to National Health proven untrue, their "immigrant" cause of Btitish unemployment proven false. The value of the Pound falling to lowest in 31 years, disinvestment in the British economy, increased unemployment sure to follow, possible breakup of the United Kingdom, possible destruction of the EU, whose original purpose was to bring lasting PEACE between waring European powers who started two world wars in the first half of the last century. What does this "leadership" stand for that touches, moves and inspires people with hope for their future?

Nupur Mukherjee

Board Committee Advisor |Ex. MD SCB, Barclays, HSBC | Independent Director NBFC | Large Enterprise GENAI Expert | ML | SAP| Data Engg |Digital |Predictive Analytics | ESG Green Energy, Adv.BRSR Agro CarbonCredit Expert

7y

I agree with Rodrigo that the BREXIT is a wake up call for the EU. However if you close watch the demographics and the poll results, the tiny margin that voted for the exit , could have been overly influenced by fear psychosis (Turks are invading) , that was proliferated by the member of the Exit Group lobby , in a social outreach blitzkrieg , initiating fear psychosis and uncertainty. For those in India , this is very similar to the Modi wave that we witnessed 2 years back and similar to the what Donald Trump is doing in US. Social mind mining strategy studies show that the millennials or 1980's groups are less susceptible to social mind mining , since their generation has undergone several iterations of changes and they are more amenable. The real group that is still susceptible to such suggestions are in the age group of 45-65+ , which is exactly the age group that voted for BREXIT. Sadly none of the citizens in the demographics , would be in the working /contributing population group bearing the full brunt of the EU exit. I am really hoping for a second referendum. As they in leadership , if you mess up once , have the spine to own up and correct course. It is no use continuing on a mistake.

Sarah Marcello MBA

Apprenticeships - specialising in strategic solutions, growth, programme stabilisation and securing tailored delivery.

7y

Firstly, having seen firsthand some of the depth of feeling, and some of the vitriolic views relating to Brexit from both sides of the fence, thank you for putting your thoughts and views out there. I see this as a leadership problem as well, and the referendum has just exposed the divide that has been building up over many years. The trouble is one of choices - all the mainstream political parties have adopted the "official" line that inside the EU is better for the country, and all public policy and key politicians have been almost groomed to follow this party line (regardless of whether it is Tory, Lib Dem or Labour perspective). There are however many in all of these parties who hold the euro-sceptic view, so they are always running the risk of not adhering to the party line, or not hearing the views of their constituents. This places these individuals in a very difficult position, so it was very brave of David Cameron to not only honour his pledge to hold a referendum in the first place, but to also allow his MPs a free rein to campaign as they saw fit. I see that as the sign of a true leader, and I am just sorry he pledged his support so publically to the remain mast because that meant he was no longer credible in taking a leave result forward in the eyes of the world. So if you first look at the choices of the common voter. These people don't have the benefits of the insight that politicians gain from inside their political bubble. Nor do they have the collective expert knowledge of economists, financial and business that politicians have access to. What they do have know is first hand knowledge of what they see, hear and understand from their personal and, sociological and financial situations, which is pretty powerful! All mainstream parties supported EU membership as the only option, essentially making this a given for most voters as things stand. Problem is, the EU we have today is not the same thing that people agreed to join in 1975, and there is a lot of resentment over this. So, the only choice for them was to either vote UKIP, who are essentially a one trick pony, or look at more radical, and highly unpaletable alternatives. I think the Tories recognised this, hence the referendum pledge, which is I believe the reason they won the general election outright. For me, their biggest mistake was making the assumption that the 'remain' would win, and as such very little effort seemed to go into identifying and managing the risk that it would be an 'out' result. Essentially, someone is only a true leader if they are clear on who is and who isn't following. For me, the political parties across the board have lost that connection and assumed that the electorate was following, when in fact the support was no longer universal. Then, when you look at the campaigning itself, things get murkier. In reality, there was no clear picture in either scenario, so "project fear" was started, and then perpetuated when it became clear on the Friday that there were no clear back up /contingency plans. The truth is, no one has a crystal ball, and it is possible that within the next 25-50 years the UK would become a state in the United States of Europe if we remained, and it is equally likely that survival for the UK is completely possible outside the EU. Which of these two options is better in reality is anyone's guess because the only truth in there is that no one actually knows for sure, despite rhetoric, "facts" and opinions! If you stay in, you are handing a mandate to allow for further integration, and by leaving you are mandating a strategic turnaround to the direction of travel that has been heading one way for a long time. For me, party politics in the UK is no longer representative of many views held across the country, as demonstrated by over 17m voters! Therefore, if anything really needs fixing, it is the party political system, which means that the referendum result and its ensuing chaos is a symptom not a cause.

Jan Kalisek

“To improve is to change; to be perfect is to change often.” – Winston Churchill

7y

Interesting. Is the conclusion consistent with the text? Let's look, who are "we" in the statement "So when we elect leaders, we should trust them to take decisions on our behalf rather than want to take them ourselves." To what extent should we empower them? As a shareholder of a company, we should limit the power of appointed leaders. The corporate management is supervised by the supervisory board, main decisions are usually presented to the shareholders meeting. If the country is to be managed similarly, shouldn't there be a level, where leader's power end, and they should ask citizens for decision? If we do not do it, will the country be leaders', or citizens'? IMHO this is the massive challenge of Western civilization in general, and of EU as of the flagrant example. And please let me to oppose the statement, that younger people will live for longer time with the decision. I do not want to imagine, where this way of thinking may end. We all are equal.

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