Can we do business with Kim Jong Un? Leadership analysis might give clues

Scholars, business leaders and national security personnel alike often ask the question about leaders such as North Korea’s Kim Jong Un: “Can we do business with him? Is he a rational actor?” Private investors ask similar questions about the leaders of other emerging economies and frontier markets — Myanmar, Ethiopia, Kazakhstan, Turkmenistan, Cambodia and others — desiring to limit their risk exposure because of geopolitical factors, uncertainty and ambiguity. 

With leaders of such countries, performing a leadership analysis and political psychology, as a domain of business intelligence, might lessen the risk for investors, corporations and financial institutions. It can give them an extra business edge, making the difference between success and failure.

Frontier investors require some predictability because this has serious implications for their bottom line. A psychologically unpredictable leader causes headaches for investors. Examples include Saparmurat Niyazov, the late leader of Turkmenistan, who would renege on oil and natural gas deals worth billions of dollars. Foreign investors lost billions during the late 1990s and early 2000s because of their failure to understand his motives and psychology. Another example is Russia’s Vladimir Putin, whose decision to invade Crimea in 2014 led to western sanctions and the loss of billions of dollars of western investments. Understanding Putin’s leadership psychology, and his desire to make Russia respected and strong, might have averted much economic hardship for foreign investors. 

The same could be argued for Syria’s Bashar al-Assad, whose brutality in the country’s civil war has driven away potential investors who earlier thought he was a modernizer and reformer. Or, China’s Xi Jinping, whose leadership psychology and predictability suggest that –— given his inner strength, resilience and childhood experiences during the Cultural Revolution — he will never back down in the trade war with President Trump, or during the current Hong Kong political protests.

Senior U.S. government policymakers have used leadership analysis to gauge the political psychology and intentions of adversaries — and such analyses have stood the test of time as useful methodological tools in profiling, negotiating and decision-making. This requires in-depth study of a leader’s writings, speeches, media appearances, social media profile, secondary sources and interviews. In emerging economies and frontier markets, decision-making authority at the highest levels is often opaque, and robust data about leadership intentions — especially with respect to foreign investors and investments — may not be readily available.  

In countries subservient to a leader, such analysis matters a great deal. Investors are interested in what the leader is like as a potential partner, and in the leader’s strengths and weaknesses, as well as his or her perception of their role and the world around them. Investors will want answers to questions: Whom does the leader listen to? Who has influence with the leader? Does the leader, if older, have serious health issues that might preclude long-term investments? 

Leadership psychology requires soft skills and imagination, to try to understand what makes someone tick. President Trump famously utilized such a creative, imaginative approach by showing Kim Jong Un a video of North Korea’s potential during their summit in Singapore in June 2018. To use an analogy, if someone is buying a cheap diamond ring, a specialized jeweler isn’t required, but if a buyer is purchasing an heirloom worth several hundred thousand dollars, a specialized jeweler is required. And if one is establishing the provenance of a rare Vietnamese “Melo-Melo” pearl, then one needs an even more specialized jeweler. Such is the approach with particular frontier markets and the specialized domain of leadership analysis.

Leadership analysis tools, as part of a “boutique” approach to business consulting, can assist investors, business executives and thought leaders in finding that “sweet spot” and maximizing their gain while mitigating risk. The private sector will continue to have a need for novel approaches that can capture such intangibles and answers to the perennial question, “Can one do business with him or her?”

Kenneth Dekleva, M.D., holds the McKenzie Foundation Chair in Psychiatry I and is associate professor and director of Psychiatry-Medicine Integration in the Department of Psychiatry at the Peter J. O’Donnell Brain Institute, University of Texas Southwestern Medical Center. He served as a senior physician-diplomat with the State Department from 2002 to 2016. The views expressed in this paper are entirely his own and do not represent the official views of the U.S. government, the U.S. Department of State, or UT Southwestern Medical Center.