Corporate Execs: Adam Smith Vs. Benevolent Dictator

This post is about my observations of corporate executives. This is not in any way a fact, but rather my opinion; and it really only applies to specific corporations in specific instances. The basis for my thinking is there are several models used for running a business. Not sure if these models are created intentionally or by the situation. Some are created directly from the top gun personalities who run businesses. It some cases they just evolve in the corporate culture.

The particular model I am referring to here is what I call the Adam Smith business model. This would be the concept where corporate execs all do what is best for themselves and therefor theoretically, the company is better off. I have worked for a few businesses run like this, mostly in South Florida. This is like applying libertarian political thinking to a corporate culture. Problem is, this just does not work. The the more successful companies I have seen and worked are run more like a benevolent dictatorship.

The Adam Smith business model does not really work in the business world. Corporate execs can not make all their decisions based on what is best for themselves. Let me correct that. Corporate execs often do make decisions on what is best for themselves, and thus the company pays for their self indulgence. This is why the thinking that bonuses and stock options are tied to company performance has been somewhat debunked in the past couple of years. And even so, there are corporate execs who think they are doing what is best for a business, but are in fact making critical, if not devestating decisions for their business, despite tons of data to the contrary. Just the simple decision to walk around and ask employees what is going on would have helped understand what is happening. It is in this failed model that the execs often baracade themselves from the lower level employees and endup working in a groupthink session. These sessions produce very little in the end because mostly it is the same thinking over and over again.

That leads us to the benevolent dictator. The benevolent dictator is a strong corporate government, which knows what is happening and why and keeps their ears and eyes out listening to the world, because they want to manage and control that world, not run from it.

Now I am sure there are many variations of companies out there that are somewhere in between the Adam Smith model and the Benevolent Dictatorship. My experience is the benevolent dictator, the castroesque leader, the guy or gal who sets everybody in a direction, is what is often needed, especially to a business in transition.

All of this is pure speculation, since I am very often sitting on the sidelines watching these people make these decisions. It is easy for me to say these things from my vantage point. However, I have seen the models at work, and I really do know better at this point in my life, and like a business doctor I can see these issues with clarity I did not see 20 years ago.