Understanding the nature of leadership is one of the key challenges facing executives today. Organisations prosper or decline based upon the capabilities and vision of their leaders. Pressure on the business community to keep on creating shareholder value whilst enhancing quality of life and simultaneously reducing impact on the environment, the essential tenets of sustainable development, pose dilemmas, challenges and tensions for managers and would be leaders. How can an executive rise above this mass of confusion? It is not by resorting to yet another management theory, but by recognising one’s accountability in a social contract with others and acting according to personal and organisational values. Article 13 believe that the explicit recognition of the link between these issues and the financial bottom line delivers real competitive advantage and further to an organisation’s ability to ‘rise above the rest’.
Leadership requires recognition of a social contract with stakeholders whether they be internal or external to the organisation. An increasing number of business leader are demonstrating their commitment to the wider communities with which they interact. They engage with consumers and their supply chain managers, seeking to discover and measure the extent which expectations and aspiration are fulfilled and where opportunities lie for mutual benefit. These activities go beyond traditional market research as leaders must increasingly account for panoply of diverse perspectives, such as those from local, national and international communities, employees, shareholders, activists or opinion formers’, corporate activities in strategic decision-making.
Leaders seek the co-operative exercise of power between financial and non –financial stakeholders in building, meeting and managing expectations through collaborative enquiry. Perhaps the essential quality required of leaders in the current corporate landscape is empathy. They must have the will and the ability to look at the organisation through the eyes of customers and other stakeholders in an attempt to deeply understand their issues and speak their language.
Article 13 advocate that a leader must seek to develop a shared understanding within the organisation of just what accountability means, what will constitute success, and how it will be measured for all the parties. In many cases this will involve building flexibility into the organisation through what may seem to be unusual alliances and partnerships as leaders seek collaboration and co-operation for their endeavours beyond the borders of the company in order to become the corporate neighbour of choice, the partner of choice, the product or service of choice and the share of choice. Leaders understand that is not enough for the company to perform well just for today; it must be sustainable in the longer term.
Managers on the other hand can be effective without recognising any social contract between the organisation and significant others, perhaps subscribing to a traditional viewpoint “you can’t please all of the people all of the time”.
Management power is usually enjoyed either as a result of functional position or ownership within an organisation’s hierarchy and can be effectively exercised to optimise results without necessarily seeking co-operation or collaboration.
The difference between management and leadership often comes into stark relief when economic considerations dictate that companies downsize. Short term gains may be forthcoming in terms of share price but the impact on the quality of life for stakeholders, their perceptions of the organisation, effects on employee well-being coupled with limited organisational learning are like ripples in a pond – far reaching and largely invisible to the casual observer. Managing requires a concentrated focus on critical operational elements of a business which is vital in order to make process and product improvements.
There is no doubt that in order for the business community to advance in terms of sustainable development (the links between the environment, social and economic issues), organisations must take specific action to minimise the ecological footprint of their products and services. But, it is strong leadership that will maintain such focus on incremental improvement whilst at the same time, actively seeking opportunities to make quantum difference, in the knowledge that innovation is more than just modifying one step in the chain.
To be an effective leader Article 13 uses dialogue and participation to enable organisations and their leaders to first recognise the apparent paradoxes, and then seek the most effective – and competitive - way of dealing with competing values. Many such tensions face business leaders today, such the issue of adding value to the supply chain whilst rationalising it, or aspiring to be an employer of choice, whilst at the same time being the dis-employer of choice when downsizing, or finding the right balance between competitive advantage and social responsibility or between standing up for human rights in developing countries versus adopting a laissez-faire approach. Difficult though it may be, a leader must be able to analyse potential risks and opportunities, while they may still on the periphery of the corporate radar screen.
Both leadership and management are required to establish solid platforms for long-term sustainable brands and organisations. Successfully building a sustainable business that will last into the future will depend not just on the concentration of management systems and process, but also on leaders demonstrating empathy, personal commitment to people, whether they be shareholders, customers, employees, opinion formers or others, whilst collaboratively engaging with them to manage the inherent complexity in their competing values. Leadership for sustainable development - and sustainable business - must be underpinned by personal values, rather than empirical data for enhanced financial bottom line. Essentially, it is the values of business leaders and those of the organisations that they lead, that will sustain the momentum and fundamentally embed a culture for sustainability into the business community and society in general.
Article 13 are a consultancy working through participation and business process to create competitive and sustainable business and brands. For more information visit their website at www.article13.com.
Contact Jane Fiona Cumming, Strategic Sustainability Advisor on: 02088404450, or Janefiona@article13.com.
Contact Neela Bettridge, Sustainability and Leadership Coach on: 020 8840 5774, or firstname.lastname@example.org