Wartime leaders vs. Peacetime leaders
As an investor, should I be studying organizations and leaders from wartimes?
Sebastian Junger, a war-time reporter and author, touched upon the difference of wartime leaders and peacetime leaders in a podcast interview with Tim Ferriss. Junger elaborated how only a schizophrenic would be able to be both a wartime and peacetime leader due to the different qualities required for different times.
This immediately queued the scene from The Godfather when Michael Corleone demoted long-time family consigliere, Tom Hagen. Tom asked Michael why he was “out”, to which Al Pacino’s character responded:
“You’re not a wartime consigliere, Tom. Things may get rough with the move we’re trying.”
Junger shared an example of a wartime leader who was aware of the possible dichotomy in leadership quality for different times in the organization, George Washington. Washington was instrumental in leading the Americans to independence but once the British left, Washington didn’t claim the throne to crown himself “king of the U.S.” but moved aside to let the democratic process take hold.
This led to the thought of how wartime leaders aren’t just the ones that help start a nation like Washington but are also the ones who transition into building the foundation for the nation. Two particular figures that come to mind are Lee Kuan Yew and Park Chung Hee.
Lee was the founder and former prime minister of Singapore who led the nation for 31 years. Much of Singapore’s rise from a swampland to the economic power it is today is attributed to the systems Lee architected over his reign. The length of his reign was unusually long and has subsequently been referred to as a benevolent dictatorship. With the pros and cons of a rule by “iron fists” the net result has been a prosperous nation that is one of the centers of international trade.
A similar leader is Park, who was the President of South Korea for about 17 years. He was a military general who came into power via coup d’état. His reign included the harshness of martial law as the country was still in turmoil coming out of Japan’s occupation post-WWII and the ensuing Korean War that split the country into two equally poor and struggling nations. Despite the negatives that come with a dictatorial rule, Park is seen as being responsible for setting the foundation for the economic bedrock that has turned South Korea into what it is today. A nation without any natural resources but with the 12th largest GDP.
The latter two leaders remind me of entrepreneurs today. The companies that tend to compound their value over decades are led by founders who built a strong foundation. Most of the large companies of modern-day that are not founder-led seem similar to nations being run by peacetime leaders.
Most CEOs of large corporations only stay some 4-8 years and that’s similar to the leaders of most democratic nations. I would much rather invest in founders who are building something out of nothing. Those who are trying to build a viable and thriving enterprise that will do well for the decades after. It also might give cadence to the other perspective that much like founders who stay to build a company for 20, 30, or 60 years, that no leader who stays for a 4-8 year term can hope to build anything substantial. This bodes to the modern view that leaders of turnstile democratic nations tend to merely be responsible for inseminating ideas but not doing anything material.
This leads me down to the idea of studying leaders, who were closer to military generals in nature. Those who built a nation to make it sustainable.
Not particularly leaders who merely expanded it rapidly because they seem rather similar to a CEO that goes on an M&A craze. This inevitably leads to a house of cards situation where everything falls apart. A Napoleon or Alexander the Great seems closer to GE’s Jack Welch, Enron’s Skilling, or Valeant’s Pearson. Empire builders that eventually saw the entire thing fall apart. Instead, there are wartime leaders who don’t just win battles but are capable of setting up the foundations for a time of peace when they abdicate.
The nature of business is that it exists in the realm of capitalism, which is an unending war between corporations. It begs the question of whether there truly ever is a ‘peacetime’ for corporations. The feeling that such a period exists for nations might also be an illusion in itself. With change being the only constant in the universe, I think both corporations and nations who believe they are in times of peace are merely unaware that they are being cut down at the ankles by someone else.
In ways, a peacetime leader might merely be someone who keeps steering the ship and hopes to keep it away from disasters while the business or nation regroups before heading out to battle again.
With that said, I continue to think the studying of nation builders (possibly the ones that are benevolent dictators) will lead to frameworks that showcase similarly with modern-day entrepreneurs who seem to be doing the same with companies today.