- Leandro Herrero - https://leandroherrero.com -

“If you put the federal government in charge of the Sahara Desert, in 5 years there’d be a shortage of sand”

These were, Milton Friedman’s (1912-2006), Nobel Prize winner in Economics, unkind words about governments. The leader of the Chicago School of Economics and father of ‘monetarism’, had little time for them.

His point is an important one when applied generically, as I’m doing here with organizations. Any function, or a firm, can manage resources well, but could also screw up completely and even deplete them. So many times the thought has come to me in observing some companies: ‘These guys are making money despite themselves’.

We have all witnessed companies going out of business despite being pioneers in a sector. They had all the sand they wanted. Many things can go wrong, of course, but killing Kodak, for example, belongs to a higher category of bad leadership.

The Public Sector has a reputation for ‘sand depletion’ –as Friedman suggested – which, in my experience, is unfair, although some examples are notable. The Private Sector on the other hand has the reputation of ‘sand conservation’ (and enhancement of the shareholder value of the owners of the sand), which is similarly unjustified. Just take a look at a list of companies and market fiascos, and ‘sand depletions’, and you’ll see most are in the Private Sector.

The truth is that good and bad management, and leadership, runs across most sectors and geographies. With all respects to Mr Freedman, ‘If you put some guys, Public or Private sectors, in charge of the Sahara Desert, anything can happen”.

One of the problems we have is that Public and Private sectors don’t learn from each other as much as they should. Depleting sand is not the exclusive patrimony of either. There are good and bad sand leaders in both – big deserts, small deserts. Some people build, some destroy.