Punctuation exists, and I write for, the people who are entrepreneurial experts, particularly in the creative space. The word I want to emphasize in that phrase is "entrepreneurial." In other words, whether they like it or not, they are capitalists. (Some of them could be better capitalists, me thinks.) They are also progressive leaning, which presents its own interesting tensions.

My podcast co-host pictures effective economic progress like this: capitalism is the fire, and the box that keeps the fire from destroying everything it encounters is the sum of thoughtful laws that contain it. I find that image very useful. Both are necessary. Capitalism without the law is destructive. Legal frameworks without capitalism yield a lot of starving people.

Socialism's Advantages

Speaking of starving people, let's talk about socialism for a minute. No, I'm not going to weigh in on any specific political race—my interest is more conceptual, and how it relates to running your firm.

A core concept of socialism is central planning. This is the approach to government that calls for very intense centralization of authority, decision making, economic power (picking the winners and losers), and so on. It includes owning the production and distribution instead of leaving it to market forces.

There are no price signals (I wrote about that last week, but in a different vein), no serious market forces, etc. Everything is controlled from the top.

Before throwing all forms of socialism under the bus, which is my natural instinct, we have to acknowledge that there are absolute advantages to this, and I'll just mention one. If you, as the government, decide that something is in the bigger entity's best interest, you can make things happen that would otherwise fall prey to all the complications that small players engage in while they listen to the people it affects. Think fast railways, energy-producing dams, upgraded electrical grids, eased housing supply, etc. Think China, if you will. And that's exactly why you, as a leader, might favor central planning: you want things to get done, and you want them to get done your way.

How This Relates to Us

So a core feature of all this is central planning, which takes us back to how this article started. While central planning has the authority to make things happen, it lacks the information (the price signals, the choke points, the little innovations, etc.). The further away you get from the actual production, the less you know about what will actually work. You start concerning yourself with things that don't matter to the people on the front lines.

This is why they say that "all politics is local" and it's why there's a direct connection between good leadership and local leadership, because local leaders aren't in it for the news spotlight. No, they just don't want to be cussed out at the Friday night high school football game or embarrass their kids at Kroger.

Speaking of central planning and entrepreneurship, entrepreneurs—that's you—hate people telling them what to do. From a personality profile standpoint, they are in that quadrant that says: this situation could be better, and I'm the one to make it so.

Here's my big point: they hate central planning when other people do it, but they love it when they do it. They think central planning is the only way that their firm can be run.

Now, not all of you, of course. The best leaders listen very carefully, delegate authority, and do the things that others can't do rather than micromanaging their daily lives with unsolicited advice.

Let's talk more about that right approach.

The Right Way

I'll put this in some simple statements. This is a better way to run a firm:

• Set the culture and "how we think about things." Articulate the rules of engagement.
• Let the troops make decisions on the ground instead of sitting by the radio while the generals deliberate over all the details they think they understand and finally get back to the troops, all the while holy hell is raining down on them from enemy aircraft.
• Spend your best efforts on the things that they can't or won't do.

In that last category of things, that includes making the big decisions that democratization will compromise. This includes positioning, financial performance, compensation strategies, and the creative destruction that must come when you disrupt yourself in the interest of creating future value.

An Alternate Conclusion

Assuming you aren't ready to give up much "central planning" yet, either because you're a control freak or your staff isn't that capable, please work to counteract the central danger of central planning, and that's the lack of information (and accountability). To you in that camp I would say two things:

1. Listen to people about what impact your decisions have.
2. Exercise authority, fine, but don't hide from the accountability that comes from it.

So set the standards, give people freedom, and institute kind accountability, for them and yourself.

This is where I should admit that I did hold elected office as the effective mayor of a small town in Indiana. And no, I did not get reelected.

Over to you.