Of all that Steve Jobs' achievement has taught us, the importance of courage is especially relevant now.
I don't mean his courage in facing his health issues, though that will be a story in itself if we ever learn the details.
I mean his extraordinary courage as a business leader. Time and again, as the CEO of Apple (AAPL), he introduced products, services, and entire business models completely unlike anything in existence. He disdained market testing (thus keeping his plans secret), he could not be sure he would succeed, and he risked significant losses and ridicule if he failed.
Yet his batting average was one of the all-time best, and as a CEO, he was the greatest wealth creator ever. No one else comes close. None of it could have happened without off-the-charts courage.
The topic was hot even before the Jobs news because the economic chaos of the past few years has paralyzed managers with fear. They keep seeing events that are supposed to be impossible, such as a U.S. debt downgrade, and the uncertainty of what may happen next leaves them frozen, afraid to do anything.
It's no coincidence that a business book called Uncertainty: Turning Doubt and Fear Into Fuel for Brilliance will be published next month. A consultant named Bill Treasurer has built his practice on teaching courage to managers (before consulting, he made a living by diving into water from 100 feet while on fire). The Americas Business Council held a Courage Forum last year. Articles and blog posts on the subject seem to be on the upswing.
Nothing suggests the business world is getting any less chaotic. So what does business courage mean right now? A few things.
Committing significant money
The number one way most business leaders respond to uncertainty is by pulling back expenses, sometimes radically. Trouble is, sometimes those expenses are actually investments that will pay off in the future, like R&D, marketing, and plant expansion. Cutting them will result in higher reported profits today but lower profits later.
Pusillanimous managers complain that they're forced to make these cuts by short-term oriented investors. But research by New York University's Baruch Lev and others shows that it isn't so. Investors can tell the difference between spending that builds value and spending that doesn't.
Brave managers keep making value-creating investments in uncertain times. DuPont (DD) maintained R&D spending even through the Great Depression, inventing nylon, neoprene, and other products that would earn billions for decades thereafter. Warren Buffett's recent investment in Bank of America (BAC) is a great example of managerial courage. Putting $5 billion of Berkshire Hathaway's (BRKA) capital into a scorned stock with the economy in peril takes guts. That's what has made him rich.
