What to do about US banks that are too big to fail, to regulate, to understand, to manage or, given their importance in national income growth, to compromise their ability to grow? Two solutions are on the table: one high in regulation and the other high in disruption. Both aim to remedy the US taxpayer subsidized risk-taking that led (in part but not in isolation) to the 2008 financial crisis. The Dodd-Frank bill (also known as The Volker Bill) tries to separate banking and investment banking activities of the large bank holding companies, as they were pre-Clinton. The regulation is so weighed down in complexity — running about 850 pages and driving 9,000-some pages of regulations — it will require over 24 million hours by federal regulators to enforce it. Even IF the bill works, Dodd-Frank keeps in place a business model that…
Business model success demands strategic leadership, societal consciousness and civil cultures
I wonder if the editors of the January-February, 2013 issue of Harvard Business Review connected the dots among their articles. As a reader I did. “The 100 Best CEOs in the World” is the cover story for an issue that also includes the article “Strategic Leadership: The Essential Skills.” Too many CEOs and their C-Suite teams invest too much of their time in operational management. They fail in the role only they can perform: designing a winning portfolio of business models and the hard-to-copy company capabilities, processes, culture, and ecosystems that they leverage. Strategic leadership is all about this work. I am not saying that operational work is unimportant. Indeed, it is vital. No customer will pay your business for inefficiency or quality issues, and competitors will likely use them to seize advantage. But the leadership team’s role is to establish the measurements,…