Successful Business Leadership

Dear Mr. Obama,

I thank you for the speech you made on race in America. I thought it was excellent and what America needed to hear. Clearly not all the wounds have healed in Black America and we all need to support achieving change and the opportunity for “pursuit of happiness” for all people, regardless of race. As an American (who happens to be white), I accept your call to work together to do my part in continuing to keep this country strong based on the values expressed in the Constitution.

You stated: “ I have asserted a firm conviction - a conviction rooted in my faith in God and my faith in the American people - that working together we can move beyond some of our old racial wounds, and that in fact we have no choice if we are to continue on the path of a more perfect union.”

I share this faith in God and the American people with you. Only by working together, understanding the different points of view, stopping the blame game, and sticking to the values of our Constitution and our God can this country solve its problems, while still enabling our basic freedoms.

There are significant problems that have been building up over many decades that have been left unresolved by administration after administration, Congress after Congress, regardless of political party in power. Yet at the same time, this country has advanced positively in many ways. On one hand, we have social issues like racism, but also government spending beyond its means for decades leaving debt to future generations to pay, a social security system that is clearly headed for bankruptcy with resolution stalled by political greed, a widening income gap due as much to a failing education system as other things, and a health care system that lacks real competition making it increasingly out of reach to many people. While there are other problems too, not solving these five I believe will doom our society to mediocrity.

On the other hand, there are many positive things occurring to make this country the best place to live in the world and give us great hope. We have excellent products and technology, a great university system to educate people to reach the highest levels of their God-given abilities, we’ve had improving long term stability in our economic system since World War II (even if you compare the current environment to the past), we have enormously talented people in all walks of life making significant contributions, we have the freedoms to enable people to aspire to their dreams, we have a God who loves us, we have an enormous ability to innovate and create, and as a country we are a giving caring people.

Unfortunately, with all this, we also have a radical religious group who want to destroy our lives for their gain. History continues to repeat itself as the only thing in common over the ages is man’s sinful nature.

But Mr. Obama, you then turned a great speech calling for unity into one placing blame on one of the very things that has created many of the positive elements of American society. You said: “Just as black anger often proved counterproductive, so have these white resentments distracted attention from the real culprits of the middle class squeeze - a corporate culture rife with inside dealing, questionable accounting practices, and short-term greed; a Washington dominated by lobbyists and special interests; economic policies that favor the few over the many.” At the root of your stated three causes is economics. Yet isn’t it our economic system that has produced this high standard of living that people today enjoy and creates opportunity for all people? The economic and political system in fact works, but it is not perfect as people are not perfect. If you examine the economic health of the three major institutions of our society, only one can claim to be economically healthy overall – businesses. Governments and consumers are showing signs of being in too much debt trying to live beyond their means.

And businesses are the only one of the three institutions that has an incentive to live within their means and use economic resources efficiently. You basically called all businesses corrupt. Is it the business or the people within that can be corrupt? Are all businesses and people corrupt? Has every business engaged in insider trading or had questionable accounting practices? There is no doubt that these things have occurred. But I believe that most businesses do not engage in illegal practices. The laws and government institutions to protect society against corrupt behavior in any type of institution in fact are working and will need to be continually developed. There are corrupt business people as there are corrupt politicians. They tend to get caught. If you look around at the best businesses (large or small), they are filled with people who are ethical and want to do well. The question we should ask is what is the social responsibility of a business? Both politicians and business people should be asking this question and developing their organizations to behave accordingly. Quite frankly, social responsibility is good business.

Mr. Obama, you also stated that Washington is dominated by lobbyists and special interests. But don’t they dominate because the politicians are accepting of their message and the money? Special interests can be a healthy input to the political process. Isn’t that part of how Washington should listen to all affected parties in order to craft good legislation? If you think all business people are corrupt, then aren’t all politicians just as corrupt? Yet if there are many good business people, then I’m sure there are many good politicians as well. Again, the only thing in common is the sinful nature of all people – including an excessive greed by both businesses and politicians.

Furthermore, I agree with you, both parties need to stop the name calling, personal attacks, and insults as a way to gain peoples favor. As a citizen, I find it insulting that politicians think they can get my vote by calling their opponent “stupid” or other such things. We simply are not going to solve anything if we position our ideas on the basis of how bad the other person is.

And Mr. Obama, I therefore ask you to stop blaming “corporate greed.” If you are truly a reconciler and want to engage all parties, then you should also respect the business world as a valued participant in solving social ills. I remind you that it is the businesses that create the jobs in the first place, not the government. Businesses develop the new technologies and products that provide a good lifestyle. Businesses pay a large part of the health care bill and half of social security.

Let’s examine this greed for a moment. Yes it does occur in businesses as it does in government. Another word for greed, though, is incentive. When there was no incentive in a government controlled economic system – communism in the Soviet Union – the society collapsed under its own inability to economically survive. The Soviet Union collapsed not with a rifle shot or missile being fired, but because of its own enormous inefficient use of its economic resources over 70 years, including peoples’ minds and talents. Studies showed that the Soviet Union had a 30% higher cost structure for the same economic goods as the US. This compares to the average 7% profit margin in businesses in the US, which is a much lower cost to gain efficient use of economic resources and keep a stable society. Because of a profit incentive, US businesses are more effective in their use of materials, people, and money. In addition, a profit incentive and competition also creates a motivation to change and improve the products and technologies for society. One of the other costs, though, is that jobs change, grow or disappear. If you examine the US economic history, however, you will see that the US has over the long term created more new jobs than have been lost. (By the way, ExxonMobil with the high oil prices is operating at a 10% net profit margin, still substantially better than the Soviet Union was able to perform.)

In conclusion Mr. Obama, my request is that you also understand the business world for what it is, the same as you call all citizens to understand and support Black America in its “pursuit of happiness”. If we are going to truly unite, then we cannot see any institution of our society to be at blame, but instead see people in all parts of society as having an important and legitimate role in solving our social problems, as well as creating the economic environment for success. As a leader, the President’s job is to not only unite all people, but then also make the tough tradeoff decisions. I hope that we simply do not go the way of the Soviet Union believing the US government is the solution when it has not historically managed to live within its own economic means. Instead, let’s also have the dialogue of “what is the social responsibility of a business?” If you look at many businesses today, you will see that they too are learning how to be more socially responsible in a business-like way. There is a great dialogue that business leaders are in fact having on this topic. Please engage with them and listen as well.

Your fellow citizen,

Alan K. Rudi