In his seminal 1514 work, The Prince, Italian diplomat and writer Machiavelli advised leaders to be proactive in establishing their own reputations. Citing Ferdinand of Aragon (1452-1516) as an example he says that a leader should “act in a way that sets everyone talking” and that their actions “should follow closely one after another so as not to allow time or opportunity for an adverse circumstance”, i.e. keep taking the initiative otherwise your reputation will be created for you by others.
In the same work, he compares Fortune (and you might say Risk) to a river: “when it is flowing quietly, you should build dykes and embankments so that when it floods, it can be channelled away”. And he goes on, saying that Fortune: “shows her power where there is no force to hold her in check; and her impetus is felt where there are no embankments or dykes to restrain her.”
Leaders who ignore this come to grief, but to achieve success leaders also need to adapt to the times, and sometimes boldness is required. In this he cites Pope Julius II (pope from 1503-1513) who ordered his soldiers to attack Bologna without the support of Spain, France or Venice, but by doing so, forced them to either support him actively, or acquiesce. It is a case of understanding and assessing the risk, and choosing the right time to be bold.
Levi Strauss founded his company in 1853 in San Francisco, commercialising the idea of a fellow immigrant for riveted denim overalls. He then gave away most of his fortune to fund orphanages and university scholarships. The reputation for social responsibility endured with the company continuing to pay workers after the factory was destroyed in the San Francisco earthquake of 1906.
Today, Levi’s stands out for staying focused on the long-term. Having gone private in 1985, it returned to public ownership just last year, but warned investors that 1) the family’s shares would have ten-times the voting power to give “air cover” for long-termism, and 2) they would not provide quarterly earnings forecasts as they believe this drives short-term attitudes. In spite of this, and perhaps just maybe, because of this, the public offering was heavily oversubscribed.
The company also speaks out in support of gun controls, immigrants’ rights, and voter registration initiatives, which might expose it to the risk of boycott in its home market, yet profits have trebled in the last nine years; profits that have enabled further positive actions to be taken such as cleaning up the supply chain.
These and many other actions such as eliminating the use of chemicals in producing the distressed look in its jeans continually reinforce its reputation, just as Machiavelli recommended, and are the reason it has just been awarded one of the Financial Times’ 2020 awards for Boldness in Business.
Data Sources:The Prince – Niccolò Machiavelli, The Financial Times, Wikipedia