The International Monetary Fund (IMF) has drafted and proposed a tax on the financial sector to fund future bailouts in the event of a future financial crisis. The proposal is titled, “A Fair and Substantial Contribution by the Financial Sector.” This makes sense. The IMF originated in the Bretton Woods agreements, which were drafted in the final year of World War II and implemented shortly after. The IMF and the predecessor to the World Bank were implemented for two main and substantial goals: 1. to recover from the most destructive war and the Great Depression, 2. to put practices in place that would prevent the causes of World War II and the Great Depression from repeating. Sounds like the kind of initiative that we need now! Let’s not wait until the problems get worse and the consequences are even more treacherous.
Some may cite the failure of the IMF to stave off the financial crisis, but this is short sighted since the failure rests on multiple shoulders in a complex basket of contributing factors. It is quite unfortunate that major multilateral initiatives (such as the proposal of the IMF) only get implemented after a painful and destructive disaster. But alas, such is the hard-headed nature of mankind – wait until a fork in the road to stop and think about the direction that one is heading.
Leadership lesson: don’t be so hard-headed. Leaders need to always think about the direction that they are headed and the direction that they are leading their organizations. You can’t wait until a problem arises, until your market share is diminishing, until your competitor comes out with a revolutionizing product, or until your core business is irrelevant. Leaders need to look around the corners and anticipate the future. This is a main difference between leadership and management: managers seek to continually improve what the business is doing; leaders seek to continually drive what the business is improving.
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