It is often both sad and laughable when I read in the media about restructuring of ailing companies, that the one and only strategy these “leaders” execute, is to fire people and cut costs.

Sure, the quarterly balance sheet will look better to shareholders and directors. On paper, the company has climbed from red back to the black. On paper, there can seem to be profitability. On paper, at least to the board, things are looking up again. And it is this very same piece of useless paper that gets propagated to the public through the communications machinery, to placate the stakeholders that all things will look rosy thereafter.

But as you and I know, from decades of past history, this rosy story does not last. Often, the inevitable sets in. The company runs out of good news, because there is only that many people you can fire, and there are only that many corners you can cut, and there are only that much costs you can slice off from the already negative territory. And then, well, the company can only limp along, announce the firing of the leader, and await either a crippled company with no morale and no innovation, or worse, death of this company. This story is not new, and yet, it happens again and again simply because stakeholders care only for the short term, and neglect that companies are like babies and children – they need lots of sustained resources and time, in order to simply survive. To thrive takes a lot more.

How should we define leadership?

The notion to “lead” is simple. Leaders should have the conduct and behavior to guide and direct his people to a successful conclusion. For example, the leader of an orchestra is to successfully conduct his people to a beautiful conclusion of a music piece. You would not want an orchestra conductor who fires part or most of the orchestra would you? You would not want an orchestra conductor who cuts corners by shortening music pieces, or uses cheap lousy instruments, would you?

So, what kinds of leaders are there? There are really just three.

1. Foolish “leaders”.

I cannot really call these people leaders as they are not leading. Leading by definition is about sustainable successful outcomes. “Leading” people to doom and failure is not leadership. Foolish “leaders” show certain characteristics, and you can find lots of these examples in human history. They fire people (and in human history, even executed them). They cut corners thinking that would shorten processes and streamline productivity, invariably cutting into quality. They cut costs at all costs, without considering why some costs exist in the first place. For example, they may cut costs in basic staff amenities such as a canteen or the pantry, but they continue to enjoy executive perks and benefits. They may cut costs in annual staff events, while they continue to enjoy first-class travel and accommodation. It just smells bad to the employees who are slaving for the company, especially when the company is not doing well and heading for oblivion.

2. Smart leaders.

A giant leap ahead from the dumb ones are smart leaders. Smart leaders are shrewd and know that they need to grow the company. They would hire people, streamline processes to allow better productivity, and build better infrastructures so that his people can perform. Such companies can grow and be successful.

3. Wise leaders.

But the quantum leap of leadership is to have wise leaders, who often simply (not quite that simply) inspire and motivate his people, and empower his people to do the right things for the company, to allow the company to succeed. What seems like a simple task of inspiring and motivating people, is realistically the hardest thing. This is because many people tend to be selfish and power-hungry, and cannot understand the notion that empowerment can result in a dramatic ascent to success. Invariably, power-hungry people will suppress and bully people, and hire only mediocre people. Conversely, wise leaders will often hire people better than himself, so that they can bring the greatest growth and benefit to the company. Wise leaders are confident, and know their place, and would not feel threatened by anyone. And yet, they are humble and personable, and need not use force and cunning on his people. At the end, staff morale is high, and people will feel driven to succeed in tandem with the company. People will want to contribute ideas to help the company. And the wise leader can simply rally his people while enjoying the joint fruits of labor together.

So, what kind of leadership do you hope to be? What kind of leadership are you nurturing and developing at your organization? And if there are bad fruits in the leadership, how incisive and decisive will you be to weed out the bad to allow healing and future growth at your organization? The answer is simple.