May 11, 2006

George Washington – a model CEO?!

Filed under: Start-up First Aid — Administrator @ 4:08 pm

About a year ago, it occurred to me (better late than never, I guess) that there are several core personality traits shared between the most highly effective/impactful CEOs and (gulp, dear I say) politicians; in fact, you could say their personalities/insights are damn near identical…

To this point (or rather to add some meat to this argument), I’ve been reading several books dedicated to global business moguls and international political icons – since February (hey, I’m a slow reader) I’ve been focusing all of my attention on George Washington – I know, I know, what new insights can we possible learn from the most celebrated forefather in American history?

Surprisingly, heaps and heaps of insights. Exploring George Washington’s inner psyche – basically, learning what makes the guy tick – has been fascinating and inspiring – without question, Washington is one of the best examples of a model CEO (past, present, and perhaps future).

One particularly insightful (and witty, no joke) bit of non-fiction comes from Joseph Ellis titled “His Excellency: George Washington.” It is less than 300 pages long – not your typical, yawn of a history book – and a must read for anyone interested in business (and, no, I don’t believe I’m being Fonzie from Happy Days by “jumping the shark” with this blog).

Anyhow, just below I’ve listed some general characteristics that I have found common among most premium/successful CEOs – I’ve then gone and backstopped these points with related passages from Ellis’ book describing Washington’s personality – hopefully this adds some color to a seemingly “tired” topic – What makes good CEO?

1. Forward Thinking and Opportunistic – you’ve got to be ahead of the curve, just enough to be flirting with notion/idea that you’re a contrarian!

Background: Good old George, at the ripe age of 20 (circa 1753), looked west to the land beyond the Alleghenies (Pennsylvania) and saw seismic opportunity; this is impressive given that he was from Virginia where all major agrarian commerce (e.g. tobacco) depended exclusively on sales Europe, specifically the Briton.

Here is what Ellis writes about Washington’s obsession with the west:

“If I was a young man, just preparing to begin the world,” Washington told a friend, “I know of no country where I would rather find my habitation than in some part of that region.”

…in the first renovation of Mont Vernon, completed in 1759, the main entrance was switched from the east to the west side of the mansion. There were architectural and landscaping reasons for the change, to be sure, but the symbolism of the switch, from an eastward to a westward facing, accurately expressed one of Washington’s deepest convictions; namely, that the future lay in those wild and wooded lands of the Ohio Country that he had explored and fought over as a young man.

…When John Posey, one of his fox hunting companions, complained about the impoverished condition of hi own debt-ridden plantation, Washington urged him to abandon his eastern prejudices and make a fresh start. Washington said, “there is a large Field before you, and opening prospect in the back Country for Adventurers…where an enterprising Man with very little money may lay the foundation of a Noble Estate in the New Settlements upon Monongahela for himself and posterity.”

We also see evidence of Washington’s forward thinking with regards to commerce, specifically the agriculture he (okay, his slaves) cultivated on his plantation. Starting in 1766, he abandoned tobacco as his cash crop at Mount Vernon, one of the first of the major Virginia planters to make the change. From now on he would grow wheat, construct his own mill to grind it into flour, and sell the flour in Alexandria and Norfolk. In doing so, Washington was on the road to recover his own financial independence from mercantile noose around his neck (i.e. dependency on British merchants).

2. Selecting Complementary Investors – picking an investor is like a marriage, hopefully, your mindset is that you’re entering this relationship for good (not quite perpetuity, but close), and thus you need to select the investor most complementary to (most of) needs/goals (and not just near-term, you must look a several years down the road).

Background: After the French and Indian War (circa 1758), Washington was looking to settle down, find himself a wife – he was absolutely craving Sally Fairfax, yet went with Martha Dandridge Custis because, as a package (I know this sounds a little cold but in China people still operate until similar assumptions), dear old Martha has the goods (e.g. money) Washington needed to be all he could be.

Here is what Ellis has to write about Washington’s idea of marriage (investors):

…whatever he felt toward Sally Fairfax, she was a forbidden temptation who could not be made to fit into the domestic picture he had formed in his head; memories of her had to therefore be safely buried deep in his heart, where they could not interfere with his careful management of his ascending prospects…

..whatever he felt toward Martha Dandridge Custis, she did fit, indeed fit perfectly. They were married on January 6, 1759. Writing from Mont Vernon later that spring, he described his new vision: “I have quit a Military Life; and shortly shall be fix’d at this place with an agreeable Partner, and then shall be able to conduct my own business with more punctuality than theretofore as it will pass under my own immediate supervision…

3. Conserving Cash – to the point of being obnoxious about limiting extraneous cost (overhead); essentially, religiously monitoring the bottom line (but careful not to under fund business initiatives).

Background: Washington was excessively and conspicuously assiduous in the defense of his own interests, especially when he suspected he was being cheated out of money or land; perhaps this is the underlying reason why Jefferson and so many other Virginia planters would die in debt, and Washington would die a very wealthy man.

Here is what Ellis has to write about Washington’s understanding of cash preservation:

“…when he hired a friend, Valentine Crawford, to assist in the management of his western lands, he drafted the following instructions: As you are now receiving my Money, your time is not your own; and that every day or misapplied, is a loss to me, do not therefore under a belief that, as a friendship has long subsisted between us, many things may be overlooked in you…I shall consider you in no other light than as a Man who has engaged his time and Service to conduct and manage my Interest…and shall seek redress if you do not, just as soon from you as an entire stranger…

4. Hiring Core Team Members with lots of Potential – the ability to not only hire the best and brightest, but also have the foresight (nose, if you will) to recognize talent before it fully blossoms; furthermore, not only delegating responsibility but also championing individual accomplishments/contributions – if your team has no freedom to operate, er, yeah, why have a team at all?

Background: Aware of his own limited formal education, Washington selected college graduate who were “Pen-men” as aides, whose facility with language assured that the grammar and syntax of his correspondence was worth of his station. Furthermore, Washington recruited military talent wherever he could find it, and he had a knack for discovering ability in unlikely places and then allowing it to ride the same historical wave he was riding into the American pantheon.

Here is what Ellis has to write about Washington’s feelings toward team:

During Washington’s presidency he surrounded himself with the most intellectually sophisticated collection of statesman in American presidential history: James Madison; Thomas Jefferson; John Adams; and Alexander Hamilton.

Washington’s success as commander and chief depended upon two acquired skills he had developed over his lengthy career: (1) Identifying and recruiting talented and ambitious young men, usually possessing superior formal education to his own, then trusting them with considerable responsibility and treating them as surrogate sons in his official family; (2) Knowing when to remain the hedgehog who keeps his distance and when to become the fox who dives into the details.

5. Taking Risks – gosh, I don’t know, being an entrepreneur means you’re inherently taking risks, rolling the dice, so, I guess the point is not to forget you’ve got to continue taking risks, pushing the envelope; as one of my b-school professors use to say when asked if he has any advice for young entrepreneurs, “ready, fire, aim!”

Background: Washington fully recognized that by accepting the appointment as commander in chief he was making a personal pledge before anyone else. And if he failed in the high-stakes gamble, his Mount Vernon estate would be confiscated, his name would become a slur throughout the land, and his own neck would almost surely be stretched.

6. Getting Lucky – yeah, this has something to do with success (but you didn’t hear that from me)!

Background: Washington often said that a central lesson of his life was “you survive and you shall succeed.” It doesn’t get any clearer than that.

7. Giving up the Reins – handing in the keys to company car, removing the CEO next to your name and replacing it simply with “Founder” or “Director” – stepping down to allow someone more qualified (hopefully – paging Steve Jobs, paging Steve Jobs) to take over as CEO of the company you’ve birth might be one of the most difficult challenges (yet, 9 out 10 times inevitable) an entrepreneur will face – embrace it, just go with it!

Background: At the conclusion of the American Rev0luti0n, to call Washington omnipotent would be an understatement, he was a King in every sense of the word – in short, it was within his power to remain as head of state, uncontested. And, whereas Cromwell [English Rev0luti0n] and later Napoleon [French Rev0luti0n] made themselves synonymous with the Rev0luti0n in order to justify the assumptions of dictat0rial power, Washington made himself synonymous with the American Rev0luti0n in order to declare that it was incompatible with dictat0rial power.

Here is what Ellis has to write about Washington’s feelings toward giving up the reins:

…Washington saw himself as a mere steward for a historical experiment larger than any single person, larger than himself; an experiment in which all leaders, no matter how indispensable, were disposable…

…Washington responded with a stern lecture to “banish these thoughts from your Mind” and denounced the scheme as “big with the greatest mischief that can befall my Country”

When word of Washington’s response leaked out to the world , no less an expert on the subject than King George III was heard to say that, if Washington resisted the monarchical mantel and retired, as he always said he would, he would be “the greatest man in the world.”

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