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A Rule of Human Systems: Leadership Will Always “Pass the Baton”

Charlie Munger frequently emphasizes that anyone in a position of dominance will inevitably “pass the baton” of leadership.

Below are some examples Charlie has mentioned in talks:

Transcript from the 2003 Wesco Annual Meeting, May 7, 2003 *

“The loss of dominance rate is 100%. Every great civilization that was dominant eventually passed the baton. Similarly, the greatest companies of yore are not the great companies of hence. I like looking back and seeing who would have predicted what happened to [formerly great companies like] Kodak, Sears and General Motors.”

Transcript from Wesco Annual Meeting, May 6, 2009*

“Where is Egypt or Athens or London? It is nature of things that we do baton passing. It is state of nature that baton gets passed, to someone who tries harder and cares more.”

Transcript from the interview with Charle Munger by CNBC anchor Rebecca Quick on September 14, 2010

“The reality as it is is that Michigan is not again going to dominate the world in autos the way it once did.

The baton has been passed.

Athens is never again going to be the leader of all civilization. Nor is Rome. Nor is London.

The baton passes.

The iron rule in life, in a historical sense, is that if you’re lucky enough to be in a leadership position eventually you have to pass the baton.

That’s the rule of human systems.

Biologically we all have to die.

And as successful systems, we eventually have to pass the baton

Those are the rules.

And if you don’t like them, you’re on the wrong Earth.”

Those Who Live Dominance Live on in the New Leader

Charlie applauds the leadership passing of the baton concept because each subsequent leader borrows from its predecessor.

I haven’t found any of Charlie’s examples of this, but an example I think he’d approve of is the British Empire contributing the English language to the United States and other countries throughout the world.

A business example of this would be that the new dominant iPhone and Android mobile devices both borrowed much of their email capabilities from predecessor Blackberry.

*Special thanks to Whitney Tilson and his The Best of Charlie Munger compilation of notes from Charlie’s speeches.

This article on the Leadership: Pass the Baton concept continues my quest to list out The Top 100 Mental Models Needed to Succeed in Business.