Weekly Impact is written for leaders by our Executive Director, Garth Jestley, who has decades of experience in senior leadership roles in the financial services sector. Each week he will share insights on life, leadership and faith.
It is often said that stock markets are driven by fear and greed. To quote an article from the Financial Post dated July 16, 2016, “David Rosenberg, chief economist and strategist for Gluskin Sheff, said he sees plenty of reasons to be wary of the current bounce, including high stock valuations, the growing numbers of bulls in the market and the crowded long trade. ‘We went from modest fear and back to greed/complacency very quickly,’ Rosenberg said.”
In fact, there is no doubt that both fear and greed affect investor sentiment which in turn is one (though not the only) determinant of stock prices. Usually, when greed drives sentiment, stocks ultimately become overvalued while the reverse holds when fear is in the driver’s seat.
While we will never get away from this reality affecting stock markets, does it apply to marketplace leadership? Indeed, leaders can and sometimes do succumb to either fear or greed as they lead their organizations.
For example, it has been my experience that banks often react to economic downturns by tightening the rules by which they grant credit to business. Unfortunately, they do not always discriminate between good companies experiencing temporary difficulties and those that are clearly uncreditworthy. In part, this behaviour can be explained by fear of reprimand from senior management for unwarranted risk taking.
Regarding greed, most of us are familiar with where it got Enron. Once a stock market darling that generated strong, consistent growth in earnings per share, Enron ultimately collapsed. The reason: senior executives cooked the books to fool the market into believing its financial results thereby benefiting from higher stock option values.
Fear and greed in leadership never end well.
According to the Bible (and from personal experience), a marketplace leader who is a follower of Jesus need not succumb to fear or greed. That is not to say that Christians are never tempted to respond to situations fearfully or greedily. In fact, the Bible is clear that none of us is exempt from temptation.
I well remember being tempted to fear during the enormous financial market meltdown in 2008-09. It was not an easy time for my business and fear was a pervasive factor in global markets. Jesus gave me the power, however, to overcome fear and to experience genuine peace in the midst of turmoil. The following excerpt from the Bible is on point.
The temptations in your life are no different from what others experience. And God is faithful. He will not allow the temptation to be more than you can stand. When you are tempted, he will show you a way out so that you can endure. 1 Corinthians 10:13
Do you struggle with fear and/or greed in your position of leadership? We invite you to join a LeaderImpact Group where you can share your struggles with other marketplace leaders who are experiencing similar challenges. Find out more.
Garth Jestley is a husband, father, grandfather, leader and business executive. Most importantly, he is a follower of Jesus Christ.