Financial assets don’t think or behave.  Leaders do.  Weeks before a presidential election, and in the midst of an economic crisis that many see as the worst since the great depression, we need to see beyond bailouts and demand better leadership from both business and government. It’s hard to argue with that. But what would better leader leadership look like?

We know the basics of good leadership. They should show so up in corporate offices and capital houses. They should affect business and election results. Too often, these basics have not been practiced by the financial executives who we trusted with enormous assets nor political leaders who we entrust with our future. In resolving the financial crisis and in selecting our local, state, and federal political leaders, we need to remind ourselves and reaffirm the leadership basics.

1.  Accountability.  When we moved into our small local community, we met with the head of the local bank.  When we told him our address, he quickly gave us the history on our property.  He knew property values past and present.  Loans on properties in his town were clearly his personal stewardship.  The practice of bundling assets then selling them to distant asset managers who then sell them again may reap short term gains, but long term they violate the accountability principle of line of sight.  These pass along derivatives are like knowing your third cousin, once removed. It is important to know who and what we lead.  Leadership can not be a derivative activity; it is accomplished by having clear accountability, transparency, and stewardship of what should be done, by whom, and by when.  Abraham Lincoln was revered as a leader who took responsibility for mistakes by admitting when he was wrong. We need business and political leaders who accept accountability, admit mistakes, and learn. Enough pointing fingers, passing blame, and playing political badminton. It is time for leaders who err to stop. Leaders who take $440,000 retreats days after declaring bankruptcy are no longer accountable.

2. Vision and action.   Visions articulate a future that engages and excites others, turns aspirations into goals, and builds on values. But, leaders also must act. Action shows up in the day to day behaviors that make the ambition reality. Under the rallying cry of "greed is good" investment advisors encouraged investors to envision a false vision of prosperity without responsibility. Realistic leadership visions and actions replace self interest with other-service. To recover from this crisis will require leaders who articulate a candid vision coupled and who take difficult and often painful actions to restore confidence and trust in the system. Leading our country will require leaders who instill both hope in our future and discipline in our present. Visionaries without action create a vicious cycle of political cynicism. We need political leaders who promise less and deliver more to create a virtuous cycle of hope and results.

3. Value from the outside/in.   Bundled toxic assets that shift from institution to institution quickly become valued from the inside/out. Asset managers using eloquent computer algorithms could track their financial acumen and progress without leaving their ensconced offices. Leaders who succeed know the markets they serve by knowing their customers and investor expectations, then translating those external expectations into internal actions. The newly appointed leader of a consumer products firm spent her first 100 days getting to know key customers, investors, and employees. Being outside her office more than inside enabled her to know how her company delivered value. To resolve the Wall Street Crisis, leader will have to come to appreciate Main Street concerns so that they can design policies that support what needs to happen. Likewise we need political leaders who spend less time memorizing and reciting talking points and more time listening and responding to real citizen concerns. We need fewer scripted debates and more candid conversations about what is wrong and how to fix it.

4. Learning and responsiveness.  Our colleagues have shown that learning agility is a key factor is leadership success.  Learning comes from inquisitiveness, creativity, reflection, and responsiveness.  In this present crisis, we need leaders who replace arrogance with a commitment to learning. They should draw lessons from other government bailouts (Chrysler, Resolution Trust Corporation) and corporate turnarounds. They should explore creative and new ways to assure financial discipline. We need leaders who spend less time postulating and more time probing how to creatively move forward. Great leaders acknowledge that they make mistakes, then demonstrate that they learn from them.

5. Character. Finally, and perhaps most important, we need leaders whose judgment is rooted in values and integrity. Accepting obscene salaries and participating in expensive retreats in times of crisis demonstrate not only bad fiscal responsibility but a lack of moral character. Followers need to trust that their leaders have less self-interest and more commitment to other-service. Servant leadership begins with a foundation of character.