Lack Of Leadership In The Great Gatsby

The law of success(ion) – shifting stakeholder interests from rags to riches

We plan almost every second of our lives. We plan for the well-being of our older selves, our children, our pets and others that we love. We plan our wills, estates and investments. Yet, the most important underlying components of our investments – the companies that we invest in or who invest on our behalf – are failing to adequately plan on leadership continuity and to implement contingencies for when the current management moves on.

Thabo Mbeki once cried: "In our world in which the generation of new knowledge and its application to change the human condition is the engine which moves human society further away from barbarism, do we not have need to recall

A lack of skills transfer limits opportunity, leading to – as demonstrated in the Great Gatsby curve - inequality and ultimately sluggish economic mobility, further entrenching poverty. This is particularly problematic, as the knowledge Mbeki speaks of is not just technical or theoretical - and thus easily learnt - but broader and more ethereal. It encompasses leadership and strategy and has specific application to the generational longevity of a

Most disturbing are CEOs at the helms of companies for many years staving off the inevitable, with the board of directors often unnervingly filling these positions with people from outside of South Africa with limited institutional memory and innate cultural contexts with which to seamlessly continue the running of these businesses. Sticky ex-CEOs continue as board members, further entrenching the old regime and culture. No matter how successful these leaders track records are in terms of value creation, the lack of seamless transition (resulting mainly from a culture of limited skills transfer) when they leave is a terrible indictment on their scorecards. It leaves a legacy of value destruction from a severe lack of stakeholder integration driven by the loss of institutional memory. The context underpinning business processes and long-term capital expenditure projects is lost. A shift in strategy post a senior management switch could change a shareholders’ long-term investment thesis