Provocative White Paper Argues that Major Gaps in Leadership Development Have Been a Significant Contributor to the Credit Crisis
(Gainesville, Florida, November 21, 2007) The Perth Leadership Institute (http://www.perthleadership.org/), the industry leader in business acumen assessment and development programs, today announced the availability of its White Paper on the current credit crisis and its link with leadership development practices, both in the financial services companies and on other companies that consume these services. The White Paper argues that the crisis was due at least in part due to a lack of business acumen on the part of managers and executives in the industry and that this has been perpetuated by the lack of leadership development programs that identify and develop business acumen.
The approach in the White Paper is based on the book by Dr. E. Ted Prince, Founder and CEO of the Institute, entitled The Three Financial Styles of Very Successful Leaders, published by McGraw-Hill in 2005.
According to Dr. Prince, "Paradoxically, there is a significant lack of attention in the financial services companies, and consumers of their products, to formally identifying and developing the business acumen of managers and executives. This, in itself, is a major systemic risk factor. These companies incorrectly believe that business qualifications and experience are evidence of business acumen. In particular, the widespread belief that having quantitative models will lead to the avoidance of systemic risk, has been proved incorrect also. Our White Paper reveals how the very steps that companies took to avoid risk actually contributed significantly to it. Companies that provide and consume financial products that have inherent risk need to take immediate steps to change their systems and processes to adopt new types of behavioral financial approaches that can be harnessed to reduce the risk that a credit crisis like this will occur again."
The Perth Leadership Institute has developed new business acumen assessments based on its research. These form part of its financial performance training and improvement programs for executives. These include its individual, team and C-level financial performance programs.
Perth has already announced the release of its Financial Outcome AssessmentT, an online instrument which assesses the business acumen of executives and managers and shows them how to develop it.
The Perth Leadership Institute was founded in 2002 in Gainesville, Florida, by Dr. E. Ted Prince to carry out research into the linkages between behavior and company financial outcomes. Its programs are targeted at executives and managers and are used for leadership and executive development, talent management and to improve individual and team financial performance at the middle and senior levels of organizations.
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