Leadership: What's Your Sovereign Risk Rating?

Daily papers and serious journals are currently full of articles about sovereign risk

. The possibility Greece or other European countries (particularly those fringing the Mediterranean) will default or reschedule their debt. This could undermine the standing and even the survival of the euro. Wikipedia defines it thus: the risk of a government becoming unwilling or unable to meet its loan obligations, or reneging on loans it guarantees. What is the leadership equivalent - and how do people rate you as a risk? Let's explore some ways to reduce that.

Let's first rephrase the above definition in leadership terms: the risk of you becoming unable to meet your obligations, or reneging on your promises. Failing to deliver what you've undertaken. Has it happened to you? I fouled up seriously once and undermined my standing as CEO. I pushed through a reorganisation, which was OK in part but flawed in central philosophy. I was too pig-headed to see this until it was nearly too late.

Sovereign risk for a country can come from both economic and political sources. If the economy lacks strong industries, the community or government overspend or imports are too high, this may destroy its viability. If the political structure is fragile or weak, this may lead to instability, unrest or worse, and again undermine creditworthiness. In leadership terms, the parallel to economic and political attributes is our technical and people skills. More generally, our IQ and EQ proficiencies.

On which of these would people rate you best? Or more importantly, worst? Are you more likely to fail on technical aspects: market knowledge, professional skills, analytical or financial acumen? Or, more on engaging people, being self-aware in dealing with others, in communicating, building teamwork or representing your organisation?

Over the past 40 years, these are issues I've seen hundreds of CEOs and other leaders struggle with. Sometimes they have a challenge in one area. For others, it's broader - relating to all aspects of their IQ or EQ. Either way, there's a simple starting point. Check what is holding your people back from following you with full enthusiasm and commitment. What are their concerns? And what actions do you need to take to address them?

I've created a framework and three-step process, which enables you to develop a personal Leadership Action Plan. It addresses your specific challenges: defining what your people need you to do. And, you can update your plan as you move ahead; or create a new one when your team or challenges change. A plan takes only about an hour but it can change a whole career. Why risk personal sovereign failure when there's a lower risk alternative?

by: Tim Pascoe

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