The message that I took away from the feature presentation by Filipe Calderon, former President of Mexico, to the Arthur Lok Jack Graduate School of Business Distinguished Leadership and Innovation Conference was that leadership is about taking decisions, even when they are tough and unpopular. Calderon’s presentation, delivered in a humble and often self-effacing manner, was both fascinating and inspiring.
He was honest about the serious challenges that Mexico faced – and continues to face – and about the decisions he had to take to overcome them. While he had to sometimes change direction, and although he did not manage to implement all of his policy priorities (eg, the liberalisation of the hydrocarbon sector and the reform of the state-owned oil and gas company), what struck me was that he did take decisions and change things.
His core message echoed the message given to the 2013 Trinidad and Tobago Energy Conference by the former President of Colombia, Alvaro Uribe. Both leaders had to manage serious security threats, which took up much of their time and attention. But they also both had important economic transformation challenges to address and needed to manage powerful vested interests to make those changes.
Calderon needed to cut out the huge wastage, inefficiency and losses that characterised the state-owned electricity distribution network. The country was spending more on subsidising electricity than on poverty reduction programmes, even after he had increased these programmes in the aftermath of the global financial crisis of 2009. Calderon wanted to close down the massively overstaffed, inefficient company that delivered power to Mexico City and install a new, modern company in its place – but long-standing collective agreements included some onerous clauses – the pension obligations of the company meant it was paying out more on pensioners than current employees. Indeed, the agreement had become so absurd that there was a clause stating the company had to provide horses for some of their employees.
In order to make the necessary changes, Calderon had to come up against a powerful, radical and politically important trade union. This meant careful planning and decisive action. There was significant opposition to the change, but Calderon maintained that the decision was in the long-term interests of the country.
In the early 2000s, Colombia’s challenge was falling oil production. Once a significant oil exporter, the country faced the alarming prospect of becoming a net oil importer. The sector was controlled by one state-owned producer, which had been unable to secure the necessary levels of investment; production was plummeting. President Uribe’s government wanted to restructure the management of the sector and bring in private sector investment, including the listing of shares in the stateowned oil company on the local stock market.
Just as in Mexico, this meant taking on a powerful and politically influential trade union that vehemently opposed the changes, and went on strike when the planned legal measures and the partial listing of the state oil company were announced. But management had done the planning that allowed them to run operations for a few months and keep fuel supplied to the country. Uribe’s reforms were implemented and investment began to flow back into Colombia’s energy sector. Oil production doubled in the decade following the restructuring of the hydrocarbon sector and Ecopetrol, the state oil company, has since been recognised as one of the most valuable companies in Latin America.
In both instances, the key was having political leadership taking hard decisions, despite opposition by strong vested interests wanting to maintain the status quo. The leaders had to plan their strategy carefully, but when the time came to implement, they moved decisively and did not back down when their plans were opposed. There are important lessons in these case studies for leaders in general, and for Trinidad and Tobago in particular. Leadership is about taking decisions.