The Louis Dreyfus Company Debt Drama

In a post-climate change scenario, food security will be an increasing concern for nation states.  While there are giant conglomerates such as Cargill Corporation dominating supplies of commodities such as wheat, there is increasing space for other players not so closely tied to one nation state.  It is worth fighting to keep these entities independent.  There may be short-term pain, but there will be long-term gain. 

There are many lessons that can be learned form the Louis Dreyfus Company drama, from astute corporate manoeuvring, to resiliency, and a sense of certainty and perseverance in the face of overwhelming odds.  Some things may be worth fighting for, and even if we lose, we know we tried.

A Closer Look at Some Critical Illness Plans

Critical illness plans are a foundation for building anybody’s portfolio of insurance policies.  In Singapore, it is almost guaranteed that the average person will live long enough to eventually get a critical illness, most likely some form of cancer.  Death is a one time cost.  Critical illnesses are more insidious, and may cost a family two sources of income – the one who is sick, and the one who has to look after him.

BlackRock Supports ESG

ESG, the environmental, social, and governance criteria are a set of standards for a company’s operations.  Asia has been gaining pace in its progress within the realm of ESG and sustainability.  The diversity of different fund markets in Asia means the adoption of ESG in these markets proceeds at a varying pace. 

ESG interest in Asia has increased due to a range of factors.  Regulatory developments have been key in this push, since ethical stewardship of businesses reduces risk, especially exposure to legislative action, regulatory censure, and risky behaviour.  In an age of activist consumerism and investment, it makes sense.  What BlackRock is doing is doing is in line with industry trends, and makes business sense.

To Build a Marketing Team or Hire an External Agency

When starting a company, one of the considerations after fund raising is marketing.  The decision here is whether to hire an external marketing agency, or build an indigenous marketing team.  This is not always so straightforward.  Marketing is a specialised role, and any serious business needs specialists to grow their market share. 

The strategic advantage of having an in-house marketing team is that they have intimate knowledge of the business.  They are directly invested in the success of the company, and its products or services.  The company is its sole concern and focus.  On the other hand, an external marketing agency would have a greater breadth of knowledge and industry contacts.  They would likely be more exposed, and be more current with industry trends.  We need to weigh between business intimacy and market currency.  An in-house team would know the company and its offerings better, while an external team would likely know the wider market better.  This depends on what the company needs at the moment, and there may be different solutions for different markets, or a combination of either. 

At the very beginning, when cashflow is tighter, the budget is a larger consideration.  An in-house team is a greater initial cost than an external marketing team.  The hiring process, and the set-up is a cost in terms of time and opportunity, since an in-house team would need time to get up to speed.  This is why businesses hire an external marketing agency.  An external agency does not have the cost of recruitment, payroll, taxes, and training, as well as supply.  They are hired to provide results and other costs are amortised across several other clients.  A marketing department is a major investment, and unless the returns justify it, it is not a cost a business should bear yet. 

The third consideration is time pressure.  Coming up with a marketing strategy requires time for market research.  When customer growth begins to plateau, when there is pressure from new offerings by immediate competition, or when a new market is sought to offset loss of share in an existing one, it would make sense to hire an external agency, which is agile enough to develop a campaign on short notice based on their knowledge of current trends. 

In general, a better approach would be to hire an agency to handle marketing and get things off the ground.  As market share and the company grows, the next step is to invest in an in-house marketing team whose role is to chart out a long-term overall strategy for the brand.  They work with the external agency, not replace it.  An external agency would still be hired for specific products, specific target demographics, or specific markets.  The marketing department works with the agency, exploiting their creative process while steering the overall branding in a direction desired by management of the company. 

Marketing is an ongoing process.  It is part of the corporate imaging and branding of the business and the products and services it offers.  There is no contention in the need for having marketing professionals, experts in the field.  It is only a matter of balance between an internal department, or an external agency.

Power Dynamic of Language

The following article is expanded from points based on my slide notes for my 90-minute workshop, “The Power Dynamic of Language”, which is about using language to be more assertive in our interactions with others.  This is part of the wider Moneynomist “Seize the Advantage” programme, along with Eric Tan Shi Wei, Gerald Yong Kim Heong, Margrette Lo Foong Quan, Oh Cheng Kok, and Zhuo Shu Zhen.  The Moneynomist team is from AIA Toastmasters Club, and are all past presidents. 

It is important for us to understand what rhetoric is.  Rhetoric is the art of putting forward a coherent, cogent argument, for or against a position, to convince people to believe as you believe and do as you suggest, because it is viewed to be in their interest.  Rhetoric is the very basis of human civilisation.  The moment one man was able to convince a group of others to perform feats, as part of a grander vision, civilisation was born.  What we see of the pyramids, the Great Wall of China, and other feats of engineering, began with the art of persuasion. 

Our purpose, in Toastmasters, is not merely to give speeches, and evaluate them.  We are part of the inexorable march of humanity, in a river of time through the ages.  That is the art of rhetoric, of which Toastmasters covers only the very basics of it. 

Within this framework, we have ethos, pathos, logos, and kairos.  Ethos is the characteristic values of the audience.  The speaker undertakes the speaker persona, and channels the crowd, but subtly influences their positions by appealing to their perceived values, their ethics, their jingoism.  This is also the appeal to their prejudices, and fear of the stranger.  As such, it can go both ways. 

A classic trope, for example, would be Nigel Paul Farage, of the Brexit Party, claiming that Turks will join the European Union, flood the UK through the EU’s freedom of movement, and challenge “British” values.  This may also be found in Adolf Hitler’s attack on the Jews, and how they are subverting the German state. 

On the other hand, it has a positive side.  An example would be Winston Leonard Spencer-Churchill’s famous “Never Surrender” speech, which galvanised the UK, and the Commonwealth, in opposing Nazi Germany.  It is found in Abraham Lincoln’s Gettysburg Address, which appealed to common values, after the Union victory during the American Civil War, among the first steps to heal a divided nation. 

Ethos works with pathos, their appeal to emotion.  It is literally an appeal to their sense of injustice, their perceived injustices, and their rage.  This is the tool of demagoguery, and has a long history.  This is also the best means to move the masses, since the larger the crowd, the lower their intelligence quotient.  People, in large numbers, are easily moved by emotions.  This works in tandem with kairos, which is an appeal to timelessness, the weight of history, and the appeal to the divine.  Religion moves people to great works, and to great violence. 

An example of pathos would be found in Malcolm X’s “House Negro” speech, where he contrasts the “house negro”, who is complicit in the disenfranchisement and oppression of the African-Americans, as accomplices with their White masters; versus the “field negro”, who is barely held in check, ever ready to rise up against their subjugation, and ready to fight for their emancipation. 

A modern, negative example of pathos would be Donald John Trump’s first major campaign speech, where he said that Mexico was sending murders, and rapists, across the borders, and appealed to the fear of the disenfranchised White underclass, and blaming Hispanic immigrants for their plight.  It is illogical, and contrary to facts, but it got him the Presidency of the United States, and disunited the states. 

Logos is, essentially, an appeal to logic.  Whilst there is a need for an underlying, seemingly coherent, and cogent, argument, it is not often necessary.  These types of speeches are used to explain policy, from a position of strength, not to gain votes, or move the masses.  People are often impervious to logic. 

A classic example of logos, in a major speech, would be Marcus Porcius Cato’s speech to preserve the Roman Republic against the imperial designs of Julius Caesar.  Marcus Porcius Cato is better known as Cato the Younger.  His speech ultimately moved the Senate against Caesar, and succeeded.  Rome became an empire after his, and Caesar’s death. 

Before we talk about the power dynamic, we have to understand what power is.  Within the socio-political construct that we call society, power is the capacity of an individual to influence the actions, beliefs, or behaviour of others.  We use the term “authority” to refer to power that is considered legitimate within the social structure.  Power is ethically amorphous.  It is neither just nor unjust, except in its utilisation.  This is as much perspective as it is intent.  Within the context of what we are addressing, we are looking at words as a tool to wield power and impose authority.  Toastmasters is a leadership programme.  There is no point in learning to speak if we never learn to be assertive and exercise power. 

Here, a power dynamic is the way different people or different groups of people interact with each other and where one of these sides has more power than the other one.  This is the dynamic of class warfare. 

The language we think in greatly shapes the way we interact with others.  For example, Germans and Germanic speakers tend to think and interact formally.  This is because, while the modern English language only knows the word “you”, the German tongue differentiates between formal pronouns, such as the singular and plural, “Sie” from informal ones, such as the singular, “Du”, and plural, “Ihr”.  Similarly, German speakers commonly used honorifics such as “Herr”, for “master”, and “Frau” for “mistress”.  Spanish-speakers, on the other hand, tended to use prefer communication on a first-name basis, regardless of rank.  Similarly, Japanese tends to be formal, while colloquial Malay is the opposite. 

This is a tool to be used to assert authority, or psychologically subdue people.  When affecting a formal tone, it tends to get the message across more effectively in a command type situation, while using a colloquial form may influence people better in an informal context – pretending to be one of them.  For example, dressing formally for meetings, and speaking formally conveys gravitas, and people tend to automatically listen to you, unless they are, themselves centres of power and influence. 

Likewise, even within the same cultural context, using the same language, people at different socioeconomic classes tend to speak differently.  Recognising this, and having mental agility, allows us to blend in, or subtly assert authority by tweaking the language dynamic.

Multi-Level Marketing Schemes are Simply Pyramid Schemes

MLM is a marketing strategy where wealthy people of ethical inadequacy sell the idea of wealth to the lower classes.  This business model began in the 1800s.  Charles Ponzi, when he started his schemes in 1919.  He paid off old investors with new ones.  In a sense, that is what MLMs are, but on the borders of legality, since there is an actual product or service.  In 1934, Carl F. Rehnborg started the Nutrilite company, the first company to combine the methodology behind direct selling and the Ponzi scheme, and created modern multi-level marketing. 

Multi-level marketing (MLM), is also called pyramid selling, network marketing, and referral marketing.  It is a marketing strategy for the sale of products or services where the revenue of the company is derived from a non-salaried workforce, while the earnings of the participants are derived from a pyramid-shaped or binary compensation commission system. 

While each MLM company has specific financial compensation for the earnings to their participants, the common feature found across all MLMs is that the compensation plans theoretically pay out from only two potential revenue streams.  The first is from commissions of direct sales by the participants to their own retail customers.  The second is from commissions based upon the wholesale purchases by other distributors below the participant. recruited by them, into the MLM.  In the organizational hierarchy of an MLM, they participants are referred to as the down line distributors.  MLM salespeople are expected to sell products directly to end-user retail consumers by means of relationship referrals, and word of mouth marketing.  They are incentivised to recruit others to join the company's distribution chain as fellow salespeople so that they can become down line distributors. 

Logically, this is an untenable system.  The Federal Trade Commission of the US published a study of over 350 MLMs, and found that 99% of the participants lose money.  However, MLMs are popular in some circles because people adhere to the delusion that they can achieve large returns through their networks.  This is statistically improbable.  It works because people are bad at mathematics. 

If we apply statistics, if an MLM recruits 10 people, and they all manage to fulfill that potential of recruiting another 10 downlines, that would mean 110 people selling the product.  If they all manage to recruit another 10, that would mean 10,110 people selling the product.  If we assume each recruited another 10, it would mean 100,010,110 involved in the MLM.  This means, at anything past the third level of distribution, it breaks down, since the odds of there being that many distinct individuals involved is economically untenable, even in an entire region.  If all these people are distributors, then who is buying?  More pertinently, what are they selling that is so special that everybody buys the exact same brand of it? 

Many MLMs do not make money selling products.  If their products were any good, they would be found in retail, where the company can maximise revenue without so many layers of distribution costs.  MLMs make money recruiting gullible people, who then make money from other gullible people.  These joiners pay a premium commission for product packages to become wholesale distributors of largely useless products. 

Despite the logical fallacy of the system, the MLM industry is still one of the world’s fastest growing.  They sell everything from jewellery to essential oils, to make-up, to even household appliances.  In the US, 6.2 million people sold products and recruiting distributors in 2018.  Network marketing industry statistics show that of the 6.2 million direct sellers, 1 million were full-time sellers, while 5.5 million were part-time distributors.  Over 10 million new pitches to US women are made annually, since they are the primary target market.  These women are mostly aged 18 to 54 years, and make up 15% of the female population in the country.  There were US$600 billion in commission payouts between 2009 and 2017.  Revenue for the industry was US$1.5 trillion in 8 years.  Of these, 45% of sales come from Asia.  In 2018, Asia made a total of US$85 billion, followed by Europe with US $38 billion, North America with US $36 billion, and finally, South America with US $27 billion.  Since 2009, the industry has seen exponential growth of $72 billion global sales, from US$117 billion in 2009, to US$189 billion in 2017.  The United States and China are the top MLM markets at 18% of global revenue.  South Korea and Germany tie at 9%.  Japan is at 8%, Brazil at 6%, Mexico, France and Malaysia at 3%, Taiwan at 2%, and finally all the other countries in the world at a combined 21%. 

Globally, the industry has grown by 1.7% annually.  The top three markets are the US, China, and South Korea.  The three countries bring in close to US$90 billion in revenue.  The Direct Selling Association claimed that in 2018, the industry made around US$35.4 billion in the US.  This was an increase of 1.3% over 2017.  This revenue was earned from sales of products or services to 36.6 million people.  Of these, 10.4 million were discount buyers, while 26.2 million were preferred clients.  The majority of distributors were aged between 35 and 44 years, comprising 26% of distributors.  Those aged 45 to 54 years follow closely at 24%, while the figure for 25-to34-year-olds is 19%.  The marketing approach is least popular with people below age 25. Those aged 65 years come in at 8%. 

Despite the fact that only 1% of those direct sellers would make any money, 29% of distributors stay as direct sellers long term.  41% of those who join as direct sellers stay motivated to find income potential in the business.  Together, they drove MLMs to a sales record of US$189 billion in 2017, from US$117 billion in 2009.  In 2017, the number of distributors grew to 166 million worldwide.  Of these, 39% of direct sellers cease being part of an MLM at some point in their life.  The primary reason they cease being MLM marketers is because they no longer want to pitch to family and friends.  One of the reasons people have been taken in by MLMs, is also because of the way they recruit, and essentially, indoctrinate people.  They are like cults.  They create a support structure that is both self-reinforcing, and coercive.  That sort of predatory recruitment means that there are people involved in MLMs who actually require intervention to leave. 

Whilst MLMs are distinct from pyramid schemes, this is on the borders of legality, and there is still much about this system that is clearly unethical.  MLMs emphasise new recruits as a source of income over actually selling their product.  They do deliver a product, which makes it legal, but that is not the primary source of revenue.  This opens these companies up to periodic censure and legal action.  For example, in 2014, Herbalife agreed to pay US$15 million to settle a class action lawsuit regarding their discounting and recruiting process.  This is not the first time any of their policies have been found questionable.  Even after the settlement, the Federal Trade Commission is still investigating them.  Various MLM companies have been sued or prosecuted for their failure to accept refunds, to fraud, to false advertising, to racketeering, to money laundering.  There is a lack of accounting for this business model, which explains why recruiters routinely lie about earning prospects.  They are not held to the same stringent compliance standards of many other industries. 

Due to the nature of their distribution, they quickly reach market saturation in an area.  They then rebrand themselves as a new get-rich-quick opportunity  For example, Nu Skin, the cosmetics MLM, has also been known as IDN, Big Planet, Pharmanex, and Photomax in the last 30 years.  They do this because they target the same vulnerable, gullible demographic, who fall for this, over and over, again; or the recruiters who take advantage of these people for money. 

In summary, the only people who have managed to get really wealthy from MLMs are the founders of these companies, and the very first movers, who often have a relationship with these companies themselves.  They have no qualms about lying about their products, emotional blackmail, and other forms of underhanded selling.  Everyone else is a dupe.

Three Steps to Inspirational Leadership

Leadership requires inspiration.  There is no leadership if the people are not inspired, even if that inspiration is borne of fear.  To inspire means to influence.  Our ability to influence is one of the foundational skills of leadership.  Too many people believe that our ability to inspire is tied to our status in society, our intellect, even our bank account.  It helps to have money, it helps to be connected, but it is not a requisite to be inspiring and influential.  This is tied to charisma, and charisma is a learnable skill. 

Dale Harbison Carnegie said, “The only way on earth to influence other people is to talk about what they want and show them how to get it.”  Essentially, people are inherently selfish, and they are interested in what they gain first.  We always shape our conversation with that is in it for them.  There are a few foundational steps we need to implement to become that inspirational leader, and build influence. 

Influence is never periodic.  It is based on building trust and consistency in values and actions.  People trust certainties.  People who are uncertain, people who are erratic, people who are temperamental, are not trusted.  People must feel that we have their genuine interests at heart, and are invested in their success.  Only then, would they be inclined to listen to us, and be directed to a specific direction. 

The second part of gaining influence is to master the art of effective communication.  This is distinct from rhetoric, which is mastery of speaking.  Part of effective communication is learning to listen and understand the underlying message, and not just the apparent meaning of the words, looking for cues in the inflections, pauses, and tonal changes.  This is how we understand people, and this is how we connect with them.  Part of this is asking questions to develop a deeper understanding.  This is asking the right questions to develop a deeper, more sincere understanding of people, and their perspectives.  It is difficult to motivate people when we do not have a gauge of their values and motivation. 

The third part of gaining influence to inspire to be generous with knowledge and to be giving.  We share our experiences, our life lessons, and our resources.  Receiving anything means giving, investing in the right people so that we can reap a return.  People follow when they can gain something, and benefit from that experience of being a follower.  They are investing their time to gain some form of advantage.  This means constructive criticism, mentoring, and coaching, depending.  Leadership is through example, not just words. 

Finally, to inspire people is to give them a reason to believe, to paint them a picture of what we can all achieve together, and make them understand that we are all part of something greater together.  This means having a clear plan, managed expectations, and regular updates.  People follow when they believe a leader is credible, and there is a direction.  Everybody wants to part of progress.  Everybody wants a challenge, and the taste of success.  Leadership is about bringing them there, especially through difficult phases.  Inspirational leadership is about painting a picture of where we want to go.

A General Actuarial Approach for Life Insurance Companies

Insurance contracts are contracts that transfer risk from the insured to the insurer.  These contracts often, also, transfer financial risk.  Significant insurance risk is defined as the possibility of paying significantly more in a scenario where the insured event occurs than in a scenario in which it does not.  Scenarios considered are those with commercial substance.  The risk under any one insurance contract is the possibility that the insured event occurs and the uncertainty of the amount of the resulting claim.  By the very nature of an insurance contract, the risk is random, and, therefore, unpredictable.  The principal risk that the insurer faces under its insurance contracts is that the actual claims and benefit payments exceed the carrying amount of the insurance liabilities.  Factors that aggravate insurance risk include lack of risk diversification in terms of type and amount of risk. 

In contracts with a discretionary participating feature, a significant portion of the insurance risk is shared with the insured.  Discretionary participating features entitle policyholders to receive additional benefits or bonuses, in addition to the guaranteed benefits of the policy.  These future bonuses are non-guaranteed, and are dependent on the future performance of the fund, and other factors related to the premiums invested, and the insurer’s performance.  The insurer retains the discretion to vary the amount or timing of the distribution of these bonuses.  For contracts with fixed and guaranteed benefits, and fixed future premiums, there are no similar mitigating terms and conditions that can reduce the insurance risk accepted.  In this case, the insurer mitigates the insurance risk by imposing underwriting limits to the size and type of risks, and underwriting to price the accepted risks. 

We understand that the larger the portfolio of similar insurance contracts, the smaller the relative variability about the expected outcome will be.  The insurer’s underwriting strategy, in such a case, is to diversify the type of insurance risks accepted.  Within each of these categories, it seeks to achieve a sufficiently large population of risks to reduce the variability of the expected outcome.  The insurer also mitigates insurance risk for contracts with fixed and guaranteed benefits and fixed future premiums through risk transfer. 

There are a few options here.  The first is by sharing risks with reinsurers.  Mortality risk and morbidity risk in excess of their respective retention limits are ceded to reduce fluctuations in claims payments.  The retention limits are mainly based on underwriting expertise, operational results, the expected size of the business portfolio, along with other considerations.  The yearly renewable term reinsurance is used for most products.  For new products or risk types with greater uncertainty in claim experience, quota share arrangements or co-insurance are used. 

There is also catastrophe reinsurance to protect the insurer from catastrophic loss exceeding its risk tolerance.  Catastrophic loss means all individual losses arising out of and directly occasioned by one or series of accidents, disasters, casualties, or happenings arising out of or caused by one event, subject to meeting the limitations on duration and extent of the loss occurrence. 

Insurers have risk concentration, which arises where a particular event or series of events could significantly impact the insurer’s liabilities.  Insurers in Singapore are exposed to geographical concentration of risk since most of the business is resident in Singapore.  It stands to reason that the individual insurers manage their economic sectoral concentration by diversifying insurance portfolio across the population of Singapore, and actively seek business in the region, all covering different working classes and different levels of society.

The Red Sycamore Story

Red Sycamore Pte. Ltd. is focused on three areas which we feel can contribute to the betterment of humanity.  They are renewable energy, food security, and healthcare.  These will be major areas of concern in a post-climate change world.  To that end, one of our key projects is the production and distribution of the next generation electric vehicle, one powered by graphene batteries, and compliant with ESG principles.  We are not just building the green vehicle of the future, but we are shaping the future of logistics, and transportation policy. 

Red Sycamore has secured commitments for US$400 million, and is planning to raise up to US$2 billion in the next 18 months from SFOs, and institutional investors.  This is to expand production of electric vehicles and batteries in Indonesia, Malaysia, and Singapore.  Red Sycamore also has an interest in a proposed joint venture in Thailand.  There are two verticals ready to list, and we are projecting a market valuation that is conservatively well in excess of US$4 billion within 24 months.

This opportunity developed out of a phone call to arrange funding for an impact investment fund in the region.  That conversation then expanded based on our shared values, and concern for climate change and its effects.  Southeast Asia is one the growth regions of the world.  According to the WEF, Indonesia alone is projected to be the 5^th largest economy in the world by 2030.  Singapore, Indonesia and Malaysia have all enacted policy to change over to electric vehicles within the decade.  We are here to change the world.

Proper Financial Advise is Necessary for CPF Investments

I find it difficult to sympathise with stupid people.  When we have cases like this, the primary cause seems to be greed.  There is little to fault with the system.  There are levels of compliance, and a balanced scorecard system.  There are thousands of financial advisors working for banks, fund houses, and insurers.  There is a fact find and KYC system.  And yet, we keep hearing of many cases where people invested in something that promised them ridiculous yields, without considering the plausibility of it.  Greed blinds people to consequences. 

In general, it is important to understand risk tolerance, investment horizon, and the nature of the investment.  What is the underlying asset?  What if there is a turn in the market?  What about political risk, and currency exposure?  This is why there is a need to have proper financial advise.

The Appeal of Asian Bonds

Two quarters later, the Federal Reserve remains dovish on interest rates, despite the passage of a record stimulus package.  Because of the change of policy on the 2% inflation target, they have more leeway in policy.  The emphasis is on economic recovery, and less on inflationary fears.  Federal Reserve is committed to keeping policy rates on hold until the US labour market has achieved maximum employment, and inflation averages 2% over time.  This would imply that the US policy rate will stay at 0% to 0.25% until well into 2023.  10-year Treasury bond yield will likely be capped at 1% due to inflationary fears. 

For Asian bonds, growth outlook is supported by better management of the Covid-19 pandemic than in Europe and North America. Countries across the region will register positive growth as the region opens up faster than the rest of the world.  The subdued inflation and attractive yield differential between Asian sovereign bonds and US Treasuries make Asian debt instruments appealing.

Some Details about CareShield Life

CareShield Life is a form of long-term care insurance, meant to provide financial protection against long-term care costs, in the event of disability.  It is meant for Singaporeans.  The policy provides lifetime cash payouts, for as long as the insured remain severely disabled.  These payouts increasing, from $600 per month.  It is subsidised by the government to keep it affordable, and Inability to pay does not result in the loss of coverage.  The premiums can be fully paid by MediSave. 

From a policy perspective, it is cheaper to subsidise the insurance coverage for long-term care for an ageing population, than to directly cover the costs of caring for them.  Reinsurance allows the risk to be spread, and portfolio pricing for citizens keeps mortality charges low.

AUM in Singapore Will Grow

Statistics have shown that Singapore’s asset management industry has staged a better than expected recovery, with more than S$4 trillion AUM.  Those numbers are expected to be better as Singapore continues to gain traction as an attractive place to set up a family office.  The number of SFOs, in particular has grown.  There is money to be disbursed into regional startups, and an added impetus in areas such electric vehicles and manufacturing. 

In an uncertain post-pandemic world, with the US and China still engaged in a trade dispute, Singapore is the natural place to park funds, ready to be deployed either side of this fence.  The tax regime in Singapore, with no capital gains and inheritance tax, also encourages it.

Inspirational Leadership is a Learnable Skill

Inspirational leadership is a skill that may be acquired.  Leadership itself is an active, continual process of incremental improvement and striving.  Leadership does not merely happen.  It is a culmination of a lot of work and experience.  It is the sum of applied experiential knowledge.  Leadership is the art of providing direction, giving people a vision, and inspiring them to work towards that vision.  The best of leaders develop other leaders, nurture talent, and inspire them.  The best teams are teams of such inspiring leaders. 

Contrary to what most people believe, there is no one type of leader, or leadership style.  What we have are broad definitions of leadership, and even then, they have little relation to what actual leadership actually is, since these ideas are theoretical interpretations of reality without nuance.  Every single person is different, with their own historical baggage, own talents, and own prejudices.  Leadership is developed by taking it all down to the common denominator of humanity, and developing something within what each person is.  Leadership begins with values. 

It is a truism of Sufism, and many other philosophies, that knowing begins with the self.  We do not spend enough time, in this modern world, getting to know ourselves.  We need quiet time to sit aside, and question our intentions, to consider the voices within, and focus on the ones that elevate us, while ignoring the voices of doubt and despair.  We then need to question the intent of what we do, and why we do it.  It is always important to clarify the intent of any action we plan.  Then, we have that foundation to develop a leadership style. 

Just as we spend time knowing ourselves, we must then spend time knowing the people around us, the ones we build our team from.  This is more than just reading their personnel files, and knowing their academic qualifications.  This is about trying to understand their motivations, their needs, their challenges.  This is about walking in their shoes, and seeking to know who they are as people.  Knowing people means we develop connections and relationships.  It means we are better placed to nurture them, encourage them, inspire them.  We are no longer merely colleagues. 

Now that we know the team, we have to develop our communication channels.  This means understanding how to give an evaluation of performance and development, and having that mix of criticism and praise in our feedback to them.  It has to be honest, but it must also be constructive, subscribable, addressable, and measureable. 

As part of that feedback process, it is important to be transparent about the decision-making process as well.  This is especially pertinent when addressed disputes within the team, and fixing any form of dysfunction in the team dynamic before it takes root.  All members of the team need to feel safe enough to have their point of view without the feeling that they have to defend themselves.  We need to cultivate this plurality of views to prevent groupthink. 

Now that we have addressed the team dynamic, and values, we can talk about direction.  For there to be inspiration, there has to be positive movement.  People need to feel that they are part of something greater than themselves.  This means setting long-term and short-term priorities, and creating milestones appropriate to each category that are achievable.  There is no sense being overly-ambitious, and failing to meet deadlines because of this.  It is bad for morale, and undermines leadership credibility.  Once these long-term and short-term priorities have been set, it is important to explain the overall strategic plan specific to the team, that is married to this tactical plan.  Otherwise, they would not feel invested in it as much as they should.  This also means that these goals can be adjusted as the circumstances change, allowing tactical flexibility and giving the team ownership. 

When these steps can be implemented and reinforced, we have now created a culture of excellence that is replicable.  We are not just inspiring the team, but we are giving them the tools and opportunities to grow to become leaders in their own right.