The Importance of the Virtue of Moderation in Leadership

In the small business world, discussions often center around key leadership qualities like resilience, innovation, and strategic thinking. Yet, one critical element that frequently goes unnoticed is moderation, also known as temperance. These terms refer to the practice of self-restraint and balanced behavior, and their importance cannot be overstated.

Historical Example: George Washington

A prime example of moderation in leadership is George Washington, the first President of the United States. Washington was known for his measured leadership style and his ability to balance competing interests. His farewell address famously warned against the dangers of extreme partisanship and advocated for moderation in political discourse. This demonstrates how moderation isn’t just a personal virtue but a powerful leadership tool that can guide decision-making and foster unity.

Moderation: More Than Just a Skill

Moderation isn’t just a skill; it’s a virtue that transforms your business journey from aimless wandering to purposeful progress. It’s not merely about making decisions; it’s about making the right decisions at the right time for the right reasons. Moderation helps you maintain focus, avoid burnout, and ensure that your business grows sustainably.

Moderation and Temperance: Two Sides of the Same Coin

For good reason, people often use the terms moderation and temperance interchangeably. Both concepts embody the ideas of self-restraint and balanced behavior. While moderation is often associated with finding the middle ground in various aspects of life, temperance traditionally focuses on self-control, particularly in relation to alcohol consumption and other physical indulgences. However, both virtues share the core principle of exercising restraint and maintaining balance.

Benjamin Franklin, one of America’s founding fathers, recognized temperance as a crucial virtue. In his autobiography, Franklin listed temperance as the first of thirteen virtues he sought to master, defining it as “Eat not to dullness; drink not to elevation.” This definition extends beyond mere abstinence from alcohol, encompassing the broader concept of moderation in all physical appetites. Franklin’s approach to temperance aligns closely with our modern understanding of moderation as a comprehensive virtue applicable to various aspects of life, including business decisions, personal behavior, and ethical choices. Both moderation and temperance, at their core, are about cultivating self-discipline and wisdom to navigate life’s complexities with balance and restraint.

Understanding Moderation

Moderation is far more complex than it appears. It involves maintaining balance, avoiding excess, and making decisions based on a sophisticated blend of values, knowledge, and life experiences. As the ancient Greek philosopher Aristotle wisely noted, “Moderation in all things” is the best policy. This statement encapsulates the essence of moderation—taking the time to find the middle ground between extremes before deciding.

Personal bias, cultural norms, societal expectations, and prior experiences are just a few of the many factors that affect our ability to practice moderation. It ranges from informal assessments we make daily—like balancing work hours with personal time—to formal evaluations in professional settings, such as deciding on a major business strategy or managing employee workloads.

The consequences of our ability (or inability) to practice moderation can be far-reaching. A lack of moderation can lead to burnout, unnecessary risks, or even catastrophic failures in business. Conversely, effective moderation fosters sustainable growth, improved work-life balance, and long-term business success.

The Virtue of Moderation

Moderation is a virtue because it involves using reason and wisdom to make sound decisions. Good moderation requires a clear understanding of our values, goals, and priorities, as well as the ability to apply them effectively in different situations. Various religious and philosophical traditions around the world echo this concept.

• Christianity: Proverbs 25:16 (NIV) advises, “If you find honey, eat just enough—too much of it, and you will vomit.” This passage directly speaks to the virtue of moderation, warning against the dangers of excess even in beneficial things. It encourages believers to practice self-control and temperance in their actions and consumption.
• Judaism: The Talmud emphasizes the importance of moderation. In the Talmud, Rabbi Judah says, “Which is the right path for man to choose for himself? Whatever is harmonious for the one who does it, is harmonious for mankind” (Pirke Avot 2:1). This teaching underscores the value of finding a balanced approach that benefits both the individual and society.
• Islam: The Quran, in Surah Al-Furqan, verse 67, states: “And [they are] those who, when they spend, do so not excessively or sparingly but are ever, between that, [justly] moderate.” This verse encourages believers to strike a balance in their financial dealings, a principle that extends to business practices.
• Buddhism: The concept of the Middle Way is central to its teachings. The Buddha taught this path of moderation between the extremes of sensual indulgence and self-mortification. This principle extends beyond spiritual practice to all aspects of life, encouraging followers to seek balance in their actions and attitudes.

These religious and philosophical perspectives highlight that moderation is not just a practical approach to life and business but also a spiritual and ethical virtue. They suggest that by practicing moderation, we align ourselves with timeless wisdom, leading to harmony within ourselves and with the world around us.

Philosophical Perspectives

Philosophically, we can see moderation as a practical manifestation of wisdom. It’s the application of knowledge, experience, and understanding to real-world situations. Moderation allows us to navigate business complexities, make ethical decisions, and contribute positively to our communities and societies.

• Epicurus: The ancient Greek philosopher advocated for moderation as a path to happiness. While he believed that pleasure is the highest good, he advocated for its pursuit in moderation. For small business owners, this could mean enjoying the fruits of their labor without falling into excess or greed.
• Marcus Aurelius: The Roman emperor and Stoic philosopher emphasized the importance of self-control and moderation in all aspects of life. His teachings can help business owners maintain composure and balance, even in challenging situations.
• Lao Tzu: The originator of Taoism advocated for “wu wei,” also known as “non-action,” a concept that represents moderation in action. For entrepreneurs, this might mean knowing when to act decisively, when to step back, and when to let things unfold naturally.

Psychological Perspectives

Psychologists have explored various aspects of moderation and its impact on human behavior and decision-making. Their insights can be particularly valuable for small business owners seeking to cultivate a balanced approach.

• Walter Mischel: Known for his “marshmallow experiment,” Mischel’s work on delayed gratification is directly relevant to moderation. His research shows that the ability to resist immediate rewards for greater future benefits is a key predictor of success. For business owners, this translates to moderating short-term gains in favor of long-term sustainability and growth. In practice, this might mean reinvesting profits into the business rather than taking large personal dividends, or focusing on building customer loyalty over quick sales.
• Roy Baumeister: His research on willpower and self-control directly relates to moderation. His research implies that willpower is a finite resource susceptible to depletion. This underscores the importance of creating systems and habits that support moderation, rather than relying solely on willpower. Business owners can apply this by establishing clear boundaries and routines that promote balanced decision-making. To prevent constant distractions, business owners can set specific times for checking emails or social media, or they can implement a structured decision-making process for major business decisions to curb impulsive actions.
• Paul Slovic: His research on risk perception is especially relevant to moderation in business decision-making. His work shows that people often rely on intuitive feelings rather than careful analysis when judging risks. For business owners, this emphasizes the need for a moderate approach that balances gut feelings with analytical thinking when assessing risks and opportunities. In practice, this might involve using data analytics to complement intuition when making strategic decisions or seeking diverse perspectives before launching a new product or service.

These psychological perspectives offer valuable insights into the practice of moderation in business. They highlight the importance of balancing short-term and long-term thinking, managing decision-making processes, understanding risk perception, cultivating self-control, and maintaining a balanced mindset in the face of challenges. By applying these principles, small business owners can develop a more nuanced and effective approach to moderation, leading to more sustainable success and personal fulfillment in their entrepreneurial journey.

Business Perspective

Modern and historical business leaders have applied the concept of moderation to leadership and decision-making contexts. Their insights offer practical wisdom for today’s complex and fast-paced business world.

• Konosuke Matsushita: The founder of Panasonic (originally Matsushita Electric) practiced moderation in his management philosophy. Matsushita’s concept of “tap water management” emphasized providing high-quality, affordable products to the masses, much like how tap water is readily available to everyone. This approach balanced profit-making with social benefit, demonstrating moderation in pricing and market strategy.
• Jack Ma: The founder of Alibaba Group emphasizes the importance of balancing innovation with practicality. Ma’s approach to moderation involves taking calculated risks while maintaining a strong foundation. He often speaks about the need for businesses to focus not just on profits but also on customers, employees, and society at large, demonstrating a moderate approach to stakeholder management.
• Yvon Chouinard: The founder of Patagonia is renowned for his moderate approach to business growth and environmental responsibility. Chouinard’s company famously ran an ad saying “Don’t Buy This Jacket,” encouraging consumers to consider the environmental impact of their purchases. This exemplifies a moderate approach that balances profit with strong ethical and environmental values.

Practical Advice for Small Business Owners

For small business owners, moderation is crucial for success. Here are seven key strategies to enhance moderation, with refined examples of application:

1. Balance growth and stability: Resist the urge to expand too quickly. A successful local bakery might perfect operations in one location for 2-3 years before considering a second branch, ensuring a solid foundation before scaling.
2. Diversify revenue streams: Avoid over-reliance on a single product, service, or client. A graphic design firm could aim to have no single client represent more than 20% of their revenue while also offering a mix of services such as branding, web design, and print materials.
3. Implement flexible work arrangements: Balance productivity with employee well-being. A tech startup might offer a 3-2 hybrid work model, with three days in-office for collaboration and two days remote for focused work, monitoring productivity metrics to ensure effectiveness.
4. Practice financial moderation: Maintain a balance between reinvestment and profit-taking. A successful consultancy might follow a 60-30-10 rule: reinvesting 60% of profits into business growth, allocating 30% for partner distributions, and setting aside 10% for an emergency fund.
5. Balance innovation and core competencies: Innovate while maintaining what works. A small software company might dedicate 80% of its resources to improving and supporting core products, while allocating 20% to researching and developing new features or products.
6. Ethical pricing strategy: Find a middle ground between competitive pricing and fair profit margins. A handmade furniture business might employ a cost-plus pricing model, which covers fair wages and materials costs, adds a 30% markup for profit and reinvestment, and stays within 10–15% of competitor pricing.

These strategies demonstrate how small business owners can apply the principle of moderation across various aspects of their operations. By finding the right balance in these areas, entrepreneurs can build more resilient, sustainable, and successful businesses. Remember, the key is to regularly review and adjust these approaches as your business evolves and market conditions change.

Conclusion

In today’s fast-paced, high-pressure business world, moderation is more important than ever. It helps us cut through the noise, focus on what’s truly important, and make decisions that align with our values and goals. Whether you’re leading a growing startup or managing an established small business, remember that moderation is your secret weapon for sustainable success.

Developing moderation requires self-reflection, a willingness to learn from mistakes, and the courage to make balanced decisions. It involves weighing multiple factors, considering various perspectives, and understanding the broader context of our choices.

As you face your next challenging business decision, step back, consider the broader context, weigh the potential outcomes, and trust in the moderation you’ve cultivated. To quote Joseph Hall, “Moderation is the silken string running through the chain of all virtues.” Use it wisely, and watch your path to success unfold. For small business owners, embracing moderation as a virtue can lead to a journey of wisdom, success, and fulfillment.