Exceptionally turbulent times: Why wisdom matters more than intelligence

Joe Mulaney is an American writer, singer, and standup comedian. His song Likability is a jail has become very popular for reasons that people of my kind do not understand. It is stylish to be unlikable, and it is not just a song, it is playing out there day after day. 

These are exceptionally turbulent times with developments in America, Europe, and Asia. Such uncertainty was perhaps last seen after the election and the early decisions of Franklin Delano Roosevelt (FDR) in 1933. FDR had felt the power of the federal government was desperately needed to get America out of the Depression. Within 100 days of his election, he signed 100 executive orders. The orders covered banking reforms, emergency relief, agricultural programmes, and work relief programmes. Each move was commented upon with awe, apprehension, or anxiety. Nobody reading this column is likely to have personal memories of the atmosphere then.

  How the Trump executive orders pan out is to be seen. So far, their effect carries shades of the early FDR years except that they are more unpredictable and vengeful. Within 30 days of his inauguration, Mr Trump has signed over 60 executive orders. This run rate is twice what he had achieved in his first term. It is also twice what FDR scored in 1933!

  In this article, I am not concerned with public policy or international relations. I merely mention this background as a trigger for the current turbulence. This column is about corporate leadership. Leaders are truly tested during exceptionally turbulent times. Apart from geopolitical challenges — jobs, tariffs, immigration, and trade — corporate leaders find great uncertainty in their business environment due to technology (artificial intelligence and quantum computing) and society (sustainability, diversity, equity, and inclusion).

  In his piece in the Financial Times on February 4, Andrew Hill wondered whether America’s industrial giants had forgotten what they were for. Have they abandoned the values and purpose that propelled them to scale and prosperity? In his book The Unaccountability Machine, Dan Davies argues that anyone who has interacted with investor-relations departments and big companies knows that they are people who have shrunk their entire understanding of business to quarterly earnings.

Norges Bank Investment Management Chief Executive Officer (CEO) Nicolai Tangen wrote in the Financial Times on January 20 that companies should “step off the quarterly report treadmill”. Indeed, some years ago, the European Union and the United Kingdom changed the compulsory requirement about quarterly results because “the system is burdensome and is potentially damaging to market dynamism”. The Kay Review (2013) and the British Banking Standards (2014) deplored short-termism as a major risk to the British economy. Why should India not accept long-life as the metric for business success in line with her civilisational roots? Jivema Sharadah Satam. 

The real threat is the way investors force CEOs to achieve short-term increases in share prices. The British American Tobacco CEO will earn £19 million this year if he can get the stock price up 50 per cent within the year. It is distressing to watch big giants like BP, Unilever, Nestle, Procter and Gamble, and Akzo Nobel missing steps from their long-term corporate strategy dance. Was it not Cicero who said “nobody dances sober unless he is insane”! 

The damage began when the Cadbury Committee of the 1990s took effect. Subsequent steps increased the number and frequency of disclosures. Nowadays, company accounts are incomprehensible even to the most agile professional accountants. And therein also lies the key to manipulation by the inevitable few who set out to game the system. 

The American example of DOGE — Department of Government Efficiency — may have inspired the idea of a deregulation task force for India. Whether it comes to pass or how effective it will be is to be seen. For all the talk in India about ease of doing business, the reality leaves much to be desired. Despite great efforts of some officers, the needle has not shifted enough. What S Krishnaswami said around 1980, after quitting the Indian Administrative Service and working as chairman of a large private firm, is still valid: “Gosh, how much government obstructs entrepreneurship, even if inadvertently.” 

American enterprise czars have adopted techno-fascism by prostrating sashtanga dandavat in front of the powers that be. Going by the experience of several academic deans in America recently, not speaking up has become the norm even in America. We can see clearly that very intelligent people may lack wisdom. 

Bureaucrats in India ask: “Why do industry captains not speak up?” The late Rahul Bajaj answered with his trademark candour: “Because they are scared.” The resulting behaviour for reputed and established corporate leaders is “keep your mouth shut”. This is not a positive sign to deal with exceptionally turbulent phases. It shows that trust is inadequate. 

Further, why do trade associations vie with one another to display large pictures of ministers and officials for their conferences? At the conference itself, time is wasted on apple polishing: Addressing and adulating the chief guest and the guest of honour, whatever the difference. The plaques that are reverentially handed over end up wastefully with the raddiwala in due course.

Exceptional turbulence management demands wisdom more than intelligence: More listening, less deferential behaviour, and constructive speaking up by CEOs. Intelligence can lead CEOs in “normal” times. Wisdom must guide them in exceptionally turbulent times. 

The author’s latest book, JAMSETJI Tata: Powerful Learnings for Corporate Success, was coauthored with Harish Bhat.  rgopal@themindworks.me