Zohran Mamdani's win challenges CEO-style governance, urging empathy over metrics in leadership

Economic Times

18 hours ago

The unexpected victory of 33-yr-old political rookie Zohran Mamdani over 67-yr-old seasoned political leader Andrew M Cuomo in NYC's Democratic mayoral primary has opened the debate on whether younger leaders with enthusiasm are better than older leaders with experience.BCG has examined the effects of ageing leadership on a company's performance and vitality. Comparing the performance of 1,000 publicly listed companies, the research concluded that the older the average age of leadership is, the lower the firm's vitality. The problem with statistical research is that correlations between two variables in one context cannot be applied to another. For example, performance and age are related in physical sports because they require physical ability.
Skills specific to the sport are also required. Whereas skills and judgement improve with experience, physical ability decreases with age. Therefore, older sports stars must concede to younger players even before they are 40. However, leaders in business and government have less need for physical strength than sports stars. Their leadership tasks and the skills they require are different.
Ronald Reagan said, 'Government is not the solution; it is the problem.' US economists and corporate CEOs adopted this slogan. Corporate CEOs were celebrated as the models to follow in the heady days of corporate capitalism and the Washington Consensus. Even some heads of government and CMs of Indian states were called CEOs of their states and feted at WEF in Davos. Differences between responsibilities of corporate CEOs and governmental leaders, and inappropriateness of the CEO model for government, were not understood. In those days, Jack Welch was among the most celebrated CEOs in the world. He had created enormous value for GE's shareholders. He had a reputation for toughness, insisting that every year, the poorest performers must be removed from GE. He downsized the workforce when hard times came and acquired and sold companies to increase GE's shareholder value. His methods became 'best practices' taught in business schools and propagated by management consultants.
Imagine the head of a country - even an unelected one. When times are tough, can he ship out people from the country to reduce the burden on finances? Can he buy and sell other countries to increase his country's GDP when economists express concern about its decline? Yet, this is what Donald Trump tried to do - chasing immigrants out of the US, offering to buy Greenland, and threatening to convert Canada into a US state.
'Socialism' is taboo in the US. Mamdani's empathy got him branded one by both Republicans and Democrats A country is not a business corporation and should not be run like one. The instruments that leaders of governments and leaders in the corporate world can use to produce results for their stakeholders are different - and they must be so.A business corporation is an economic institution. A nation is a socio-political institution.Legal owners of a business corporation are its investors. The legal owners of a country are 'We, the People' - all its citizens.Rights of investors in a business corporation are proportional to their ownership. Those who own more have a greater say in how the corporation is run. In a true democracy, however, all citizens - whether billionaire or pauper - have equal rights.Liabilities of business corporations are limited by law. They are not legally accountable for the impacts of their profit-making activities on the environment and society. Thus, corporations are selfish citizens created by law but given the same rights as human citizens to protect their property and sue others.
Leaders of governments are responsible for welfare of all citizens. They must discipline all - including large business corporations - who cause harm to others. Therefore, government leaders must give precedence to the 'ease of living' of common citizens over the 'ease of doing business' of corporations and their investors. Mamdani has not yet been elected mayor. He is only the candidate for the Democrats - a political party that lost touch with the needs of poorer, working-class people. Donald Trump, a billionaire, tapped into this need and beat the Democrats. The Democratic establishment - including billionaires Michael Bloomberg and Bill Ackman, and Bill Clinton, who revived the Democratic Party's fortunes in the 1990s by raising more money from Wall Street than Ronald Reagan could - supported Cuomo.
'Socialism' is a verboten word in the US. Mamdani, with his concern for common people, has been branded a 'socialist' by Republicans and the Democratic establishment. NYC's businesses have become alarmed that Mamdani, if elected, will push through his agenda of public welfare - reducing bus fares and rents for poorer citizens, and taxing businesses to balance the budget.Leaders of all governments must be socialist in their hearts, by 'putting the last first' in their policies - Gandhiji's principle of Antyodaya. He hoped that even business leaders would follow this principle as 'trustees' of a society's resources and wealth - not its owners.
Human values must guide their business decisions, not stock market valuations of their wealth.