John Kay

Is there such a thing as a business genius? It is a moot question this month, because in modern times Apple’s Steve Jobs, who died last week, was probably the individual with the strongest claim to that title.

The skill of the statesman is to distinguish situations in which ambiguity makes coexistence possible from those that will make the future more troublesome. In this respect, politicians who have steered world affairs through the financial crisis have not served us well.

Trams were phased out because they were inferior to buses as a means of public transport. They still are.

Always ask of data “what is the question to which this number is the answer?”. “Earnings before interest, tax, depreciation and amortisation on a like-for-like basis before allowance for exceptional restructuring costs” is the answer to the question “what is the highest profit number we can present without attracting flat disbelief?”.

People in the middle of events often know less about them than those watching from the outside, which is why interviews with senior business figures inform us about what these people think rather than what is happening.

There are elements of classical tragedy in the rise and fall of Gordon Brown. A brooding, private intellectual is allied with a charismatic leader. The pair sweep triumphantly to power. But the intellectual nurses a grievance, over the public success of his colleagues. This festering resentment contributes to the destruction of both men. Eventually toppling his rival, our tragic hero holds the kingship for a brief, unhappy period.

The theory that the right answer to the gap in information and knowledge between the investment bank’s structured products division and the person in the street is to give the person in the street more information is absurd.

The modern cult of the heroic chief executive is at the root of the problem. Greater shareholder activism may help, but the most valuable restraint would be more effective checks and balances within the company itself.

There is a difference between repeatedly engaging in actions you believe will make you popular, and demonstrating the qualities of leadership that prompt people to vote for you.

The lesson of EMI is not that media industries are unique, but that you can lose a lot of money if you overpay for a company with a broken business model, as you can in any other industry.