What Makes a Great (Economic) Leader?
- Karen Kuykendall
- Sep 12
- 8 min read
Updated: Oct 29
My husband and I visited the Jimmy Carter Center in Atlanta this past week during the Labor Day holiday. Walking through the various exhibits, I was fascinated to see the progression of that president's life from farm boy to naval academy cadet to US president to Nobel Peace Prize recipient.
His early years and personality would not have seemed to predict his future destiny as the most powerful man in the world. While smart and hardworking, his fellow cadets described Carter as quiet and introverted. Though well spoken, he did not possess the charisma and oratory skills of some other presidents. Despite those qualities, he was able to accomplish great things in his lifetime. While people may debate his policies and effectiveness, most–if not all–of them would agree that Carter was a man of integrity who dedicated his life to serving other people.
Visiting the center made me think about leadership, and specifically how the leadership of a country can impact its economics. Throughout history, leaders have influenced their country’s prosperity or lack thereof; and the greater their authority, the greater the effect of their policies. Who has had a great impact on their country’s economy? There are a number of examples, but several that stand out from more recent history are:
Mao Zedong (China) - Mao's approach, focused on state-controlled, top-down central planning and ideology over expertise, ultimately set a foundation for later post-Mao economic reforms but resulted in a period of extreme hardship and famine for millions. Through significant charisma and a cult of personality, Mao maintained strict, centralized control, promoting his own theories and ruthlessly purging any dissenting elements.
Joseph Stalin (USSR) - Stalin's implementation of forced agricultural collectivization, elimination of private ownership, and relocation of peasants to state-run farms boosted industrial output but caused catastrophic loss of life and widespread disruption. He fostered a personality cult that presented him as an infallible, god-like figure. He systematically eliminated rivals and claimed absolute power with no checks and balances.
The Kim family (North Korea) - The Kim family prioritizes military spending and nuclear weapons development over citizens' needs, leading to chronic shortages of food and energy. The regime's policies have prompted international sanctions and created severe economic hardship. This authoritarian, dynastic dictatorship emphasizes a cult of personality around the leader, the use of heavy repression, a "military-first" policy, and a reliance on a rigid system of patronage and hierarchy to control the population and ensure loyalty.
Note that I said greatest, not best, impact. This group shares qualities that you would expect in totalitarian leaders, but these traits are not limited to dictators. According to Rasmussen University, autocratic leadership can easily show up on a lesser scale in business as well as politics. Some of the defining characteristics of these leaders would include:
Management ranks that are filled with “yes-men” or people who mimic and echo the leader
The presence of threats or intimidation to foster loyalty
Extreme or wide-spread micromanagement
Centralized decision-making
Buzz words like “discipline”, “accountability” and “consequences” to achieve high standards
Command and control
A number of famous business leaders allegedly fall into this category, including Steve Jobs, Jeff Bezos, Henry Ford, Jack Ma, and Elon Musk. All of these men were able to create gigantic, hugely successful companies in a relatively short period of time; they did so in part because they exercised great control over their creations. That kind of success can be the upside of this leadership style. The downside can be seen more in the long term, with a toxic work environment resulting in reduced productivity, high turnover, and lower customers satisfaction.
Besides autocratic, there are a number of other leadership styles, including:
Transactional: a system of rewards and punishments used to motivate employees to achieve specific goals and outcomes. It focuses on maintaining the status quo and achieving short-term goals effectively.
Democratic (Participative): team members are involved in the decision-making process, fostering a collaborative environment. It can lead to higher engagement and better solutions but may slow down the decision-making process.
Servant: the primary goal is to serve the needs of the team, fostering their growth and wellbeing. This style can build loyalty and a strong, supportive culture but requires leaders to have a strong service orientation.
Situational: This style involves leaders adapting their approach based on the situation, the task at hand, and the skill level of their team members. It's a flexible style because it acknowledges that no single approach works in all contexts.
All of these styles have their pros and cons, and each is better suited to certain circumstances. In the case of short-term and/or crisis situations, the leader-focused autocratic and transactional styles can effectively accomplish pressing goals. For instance, a military operation would normally practice the autocratic model, since rapid mobilization and total compliance are needed for successful missions.
The democratic, servant, and situational styles are stakeholder focused. These styles are long-term oriented and have the best odds for producing a mutually beneficial situation. Some of their shared qualities include:
Focus on People and Development
All three styles place a high value on their team members.
Democratic leaders involve the group in decision-making.
Servant leaders are committed to their people's growth and wellbeing.
Situational leaders understand and adapt to individual follower needs and development.
Flexibility and Adaptability
Leaders in these styles do not adhere to a single, rigid approach.
Situational leaders are defined by their ability to change their style to fit the task and team.
Servant and democratic leaders can adapt their methods to best serve and engage their team members, sometimes even blending with situational approaches.
Collaboration and Empowerment
These styles promote a collaborative environment where team members contribute and are given more responsibility.
Democratic leaders rely on the participation and diverse input of the group.
Servant leaders empower others by giving them opportunities and recognizing their talents.
Situational leaders adjust their level of directive or supportive behavior, often empowering those who have demonstrated higher competence.
Trust-Building
A strong foundation of trust is essential for these leadership styles to be effective.
Servant leaders build trust by being authentic, empathetic, and supportive.
Situational leaders earn trust through their competence and maturity in adapting to team needs.
Democratic leaders foster trust through shared decision-making and team cohesion.
Compare those qualities with the short-term, leader-centric styles that were mentioned above:
Leader-Centered Stakeholder-Centered
(Authoritarian, Transactional) (Democratic, Servant, Situational)
Focus on leader's desires & directives Focus on people & their development
Rigidity & control Flexibility & adaptability
Centralized decision making Collaborative & empowering
Relationship built on transaction Relationship built on trust
My guess is that most of us would rather be in a stakeholder-centered environment, both for work and for government. In those scenarios, drawbacks are more often borne by the leader, since these styles require a willingness to listen to wise counsel, to change a wrong course if necessary, or to stay on the right one through difficulties. They require putting the good of the group above personal gain. They demand on-going maintenance and do not necessarily give back as much as has been given.
It can be difficult to find leaders who are willing to make these shorter-term sacrifices for themselves in order to reap longer-term benefits for everyone. In a financial world where success is measured by quarterly reports, or a political world where a highly-partisan atmosphere can make universally beneficial lawmaking difficult, being a stakeholder-centered leader can be tough.
In the end, however, committed, sacrificial, and visionary leaders can bring about change for their company or country that can have long-reaching benefits for everyone. Consider the CEOs we have highlighted in our Better Capitalism in Action posts: Dan Price, John Spedan Lewis, John Bogle, Emmanuel Faber and Paul Poleman, as well as others featured on our website. All of these leaders purposely created a better future for the people whose lives they touched.
On the political end, we briefly looked at a few authoritarian leaders and how their economic policies affected their countries. Let's also take a look at three American presidents who affected the country's economy, and what the results were:
Abraham Lincoln - His policies, including the National Banking Acts, created a strong national financial system, promoted westward expansion through railroad incentives, and fostered industrial growth. These initiatives led to a more unified and modernized national market, a rising middle class, and laid the groundwork for America's transformation into a global economic power.
Positive leadership traits: honest, persevering, humble, empathetic, courageous
Theodore Roosevelt - He strengthened consumer protection through the Pure Food and Drug Act and the Interstate Commerce Commission's increased regulatory power, improved labor relations by mediating the 1902 Coal Strike, and expanded American global influence and trade through the Panama Canal and a strong naval presence. His approach, known as the "Square Deal," aimed for a fair balance between business, labor, and consumers through responsible regulation rather than outright opposition to large businesses.
Positive leadership traits: ethical, principled, fair minded, service oriented, determined
Dwight D. Eisenhower - His economic policy balanced budget concerns and national security with the continuation of some New Deal programs, such as expanding Social Security, and a significant investment in infrastructure through the Interstate Highway System. His "New Look" national security policy also reflected a concern for fiscal responsibility, aiming to balance military commitments with the nation's financial resources.
Positive leadership traits: humble, responsible, accountable, prepared, decisive, patient, selfless
None of these men were perfect, and there were times when all three used a more autocratic style during a crisis. As I have said, that style is useful as a short-term solution to pressing needs. What differentiates these leaders from authoritarians are their motives and character. All three were service oriented and worked tirelessly to achieve goals they believed would benefit the average citizen. All were respected for their self-awareness, honesty, and responsibility. All brought about reforms that made people's lives better.
Sadly, we currently live in a time when favorable character qualities like those possessed by Presidents Carter, Lincoln, Roosevelt, and Eisenhower do not seem as admirable as they once did; but character–the mental and moral qualities distinctive to an individual–is still the driving force behind decision making and the usual predictor of behavior. If we want decision making that leads to flourishing and favorable outcomes, we need leaders with favorable character qualities.
How about the leaders in your workplace, as well as your political leaders? What kind of style do they lead with? What are the results of their leadership style? Do they get things done in a fair and ethical way? Specifically, do they pursue policies that promote economic mutuality? These are important questions for us to ask, and we need to not only get our answers by listening to what they say, but also by watching what they do. My hope is that by doing so consistently, we will promote leadership that moves us towards a mutually beneficial future.
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