The bottom line for Mintzberg is instilling a sense of commitment in managers — commitment “to the job, the people, and the purpose, to be sure, but also to the organization, and beyond that, in a responsible way, to related communities in society.” Amen.
That same sense of commitment lies at the heart of John C. Bogle’s Enough: True Measures of Money, Business, and Life. The germ for this book and its title come from a story about writers Kurt Vonnegut and Joseph Heller. At a party given by a billionaire hedge fund manager, Vonnegut informs Heller that their host makes more money in a single day than Heller has earned in total from his wildly popular novel Catch-22. Heller responds, “Yes, but I have something he will never have...enough.”
The founder of the Vanguard Group and the creator of the first index fund, Bogle examines how leaders and managers in the financial-services industry — and business generally — have failed both investors and society and discusses what can be done to set things right. Bogle could be the poster boy for Mintzberg’s effective manager and leader. The tenacity of his message and his business model of long-term investing, especially in an era when the so-called smart money ran in the opposite direction, makes him a real hero of mine.
In a world where measurement has replaced judgment, where investing subtracts value from society rather than adds it, and where our financial system challenges corporations to “produce earnings growth that is, in truth, unsustainable,” Bogle would have us adopt some new rules for leaders. Some of these rules echo what Mintzberg says about the managerial traits he has identified as vital, such as commitment, caring, and the ability to leverage people’s desire to work together in community.
Unsurprisingly, trust is also high on Bogle’s list of leadership and organizational attributes. He quotes economist and investor Henry Kaufman, who asserted in On Money and Markets: A Wall Street Memoir, “Trust is the cornerstone of most relationships in life. Financial institutions and markets must rest on a foundation of trust as well.” Bogle points to a survey of fund investors that found that almost three-quarters of the respondents did not trust the fund industry. “And how can fund investors muster any faith whatsoever in the funds that now exist,” he asks, “when more than half of their managers won’t put their own money on the line?”
Bogle points to the emphasis on measurement at the expense of judgment as another factor that is eroding trust. “Business organizations must learn that ‘not everything that can be counted counts,’” he points out, quoting Albert Einstein. “Yet today we rely too heavily on counting and not enough on trusting. It is time — well past time in fact — to strike a healthier balance between the two.” For Bogle, it all comes down to a lack of leadership, as he illustrates through discussions of excessive CEO compensation, the lack of accountability and principles for ethical conduct, short-term speculation at the expense of long-term investment and growth, and more.
The final section of the book, labeled “Life,” calls for a return to 18th-century values. Before rolling our collective eyes, let’s remember that the 18th century was the age of reason, and of Thomas Paine, Adam Smith, and Benjamin Franklin, whom Bogle calls the “paradigm of the eighteenth-century man.” It is Franklin the entrepreneur whom Bogle holds up as a contrast to those in our own century — a man motivated not by a desire for personal profit but by the joy of creating and of exercising his ingenuity and energy. Indeed, according to Bogle, the leaders of the 18th century were able to “implant in society a reliance on reason, a passion for social reform, and the belief that moral authority is integral to the successful functioning of education and religion as well as to commerce and finance.” He would like to see more such leaders today.