BLOG VIEW: This week's Blog View is guest-authored by David Lykken, managing partner of Mortgage Banking Solutions, based in Austin, Texas. Phil Hall's Monday column will return next week.
‘How much more screwed up can things get?’ is a question that many of us are asking with increasing regularity. The answer appears to be, ‘A lot more than we ever thought possible!’
Metaphorically, it is as if the U.S. has contracted some unusual disease. What is more disconcerting than the disease itself is what our leaders have prescribed as the ‘cure.’ In this case, the ‘cure’ may turn out to be more fatal than the disease: government intervention via economic stimulus initiatives, including the Federal Reserve's two rounds of quantitative easing. There is now talk about a third round of quantitative easing, even though the first two efforts have done little, if anything, to spur economic growth.
As if that weren't enough, consider the Consumer Financial Protection Bureau (CFPB), which has authority over a host of laws ranging from the Alternative Mortgage Transaction Parity Act to the Truth in Savings Act. Even more astounding is that the week before the CFPB's designated transfer date of July 21, nobody was nominated to head up this new agency. Due to the political climate in Washington, it seems unlikely that the eventual nominee – former Ohio Attorney General Richard Cordray – will get a Senate confirmation.
Can you recall a time when so many were in power, yet no one seemed to be taking authority and leading? There is no question – we have a very serious leadership crisis in this country. And for that matter, we have an identical crisis in the mortgage banking industry.
Earlier this year, the book "Reckless Endangerment," authored by Gretchen Morgenson and Joshua Rosner, was released. The authors did an amazing job of chronicling in detail how the former leaders of Fannie Mae and Freddie Mac – guys like Jimmy Johnson, Frank Raines, David Maxwell, Tom Donilon, Leland Brendsel, Tim Howard, Tom Nides and Herb Moses – were at the epicenter of what evolved into today's epic financial crisis.
They also explained how politicians and government officials – including former President Bill Clinton, former Treasury Secretary Robert Rubin, former Deputy Treasury Secretary Larry Summers, former Sen. Chris Dodd and Reps. Barney Frank and Maxine Waters – were involved – and even helped engineer – what has brought our country and our industry to the brink of disaster.
And, sadly, we aren't even close to the end of this crisis. It is an ever growing and evolving problem based on bad leadership.
The bigger question we have to ask is this: "What are we going to do about this crisis?"
I started reading everything I could get my hands on about this matter, and I also conducted interviews and held conversations on the topic. What I've found most alarming and disconcerting thus far is that most Americans wouldn't recognize a good leader if they walked up and slapped them in the face.
With a few exceptions, we haven't had many public or civic leaders to admire. As a nation, our concept of leadership first needs to be deconstructed and then reconstructed. At a minimum, it needs to be rediscovered!
So what is the solution? First, we need to learn what makes a great leader. Second, if we recognize something of ourselves in the definition of leadership, we need to step forward and accept the responsibility.
In short, there are the seven C's of Leadership: character, conviction, confidence, charisma, clarity, communication and compassion. Let's consider each of them.
Character. This is the biggie! The simplest definition of character is "the combination of qualities, values, attributes, traits or nature that distinguishes one person or group from another." A key word is "values" – they are the single greatest determining factor in what makes or breaks a good leader.
In the last business cycle, greed seemed to trump good character. I pray that as a result of today's financial crisis, each of us will be more focused on character than on anything else. While leaders will never be perfect, it is not judgmental to examine and test a potential future leader's values and virtues.
Conviction. A strong leader must have conviction in what he or she believes, and what someone believes is directly tied to character. We don't need more leaders with "deep convictions" that are anchored in greed and selfish ambitions. That is why conviction has to be anchored in good character, especially when facing the challenges ahead.
Confidence. How can you be a good leader if you are not confident? Because of the crisis we are facing, to lead us to victory, we need leaders that possess and portray a heart-felt confidence that is grounded in a deep conviction of what is necessary.
Charisma. Many, but not all, great leaders possess charisma. It is so much easier to follow someone that has a genuine and likable warmth about them versus the "full-of-themselves" selfish charismatic types of the past. Unfortunately, we've had our share of bad leaders that had charismatic personalities – but if we had examined their character and values, we would have been able to see them for who they were.
Clarity. In the midst of a crisis, there is often a lot of confusion and conflicting "facts" that need to get sorted out. A good leader possesses unique analytical and problem-solving skills to sort through the confusion and formulate a solution, regardless of the complexities. They are able to institute a clear and concise plan and communicate that plan with conviction and clarity.
Communication. If you surveyed a thousand people on what is the single strongest characteristic of a good leader, 98% of the respondents would say great communication. Without question, a good leader has to have exceptional communication skills.
However, this is where the vast majority get tripped up. A great communicator does not necessarily make a great leader. Conversely, a great leader will never make it as a leader if he or she doesn't communicate well.
A good leader must also have exceptional listening skills. This explains why some leaders have succeeded, even though they may not have been great orators. When the opposite is true – a supposed leader has phenomenal oration skills but lousy listening skills – you can have real problem.
Compassion. A leader must be compassionate. The sentiment in the U.S. is that the voices of the people are not being heard – or, if they are heard, then they are ignored.
And, quite frankly, "We the people" are fed up and angry. With so many going through such severe hard times and frustrated beyond words, it is essential that the leaders of tomorrow be highly developed in their empathic listening skills.
The reason we are facing a leadership crisis is not because we don't have leaders walking among us. They are there! They need to be encouraged to step up and answer the call. Now, more than ever, our country needs leaders!
