When I discuss the four principles of values-based leadership (self-reflection, balance, true self-confidence, and genuine humility) in classes and leadership talks to senior leaders, the principle that often raises the most questions is BALANCE: People ask me to give examples of what I mean when I emphasize the importance of a values-based leader having a balanced perspective.

My “opinion” is that it is easy to have very strong opinions on a topic (even very emotional ones). However, the key is to be self-reflective enough to take the time to truly understand all sides of the issue, or said another way, to seek to understand before you are understood.

A great example is a discussion I had with a colleague last week. The topic was the role of “activist investors” in publicly traded companies. It is very easy to have the opinion that these investors are “short term, greedy folks” who are trying to rip off the company, and that they do not care at all about the long term health of the company. CEOs are often quick to label activist investors as the enemy, who should at a minimum be ignored, and possibly feared. In some cases this may in fact be true (clearly some activist investors may be harmful), but I would argue a values-based leader will at least take the time to understand all sides of the issue.

Okay, so what is another “side”? Let’s take a step back: a public company is owned by the shareholders, whoever happens to own shares of the stock. If an activist investor owns stock in the company, I believe he or she has a right to present his or her perspective to management. If the activist investor’s recommendation is really harmful to the company, management should be able to convince a majority of shareholders why they should vote against the activist investor. However, if a majority of shareholders agrees with the activist investor’s recommendation, maybe the recommendation makes sense, even if management doesn’t agree (no one said that management is “all-knowing”).

One of the arguments you often hear from companies is that activist investors are very short-term focused, and that they don’t care about the long-term success of the company. I always remind my students that management needs to focus on BOTH the short-term and the long-term. The job of management would be much easier if one had to focus only on the long-term….Why? As I tease students and executives, managing only the long-term is easy because the long-term never comes….it is always in the future! If activist investors have concrete proposals that would increase the stock price in the short-term, why wouldn’t a balanced leader want to truly understand their perspective before rushing to judgment that the activist investors have only nefarious purposes in mind?

In conclusion, I am not taking sides……just wanting to be a little provocative to demonstrate that sometimes company management may be “right’, and sometimes the activist investors may be “right”.  You will not be able to determine the answer unless you take the time to truly understand all sides of the issue, or said another way, you seek to understand before you are understood.

Here’s wishing everyone a fantastic Thanksgiving with family and friends!!