While it is a tough time to be a business leader, it is also a time of opportunity for leaders to make an authentic, long-lasting impact – not only within their organization, but on the future of the planet.
In the context of increasing awareness of multiple global challenges, a new order of leadership for action on climate and other social and global turbulence is required, and a new order of HR professionals is required to recruit and develop them.
Climate change is increasingly recognized by business leaders as a global emergency and many of the world’s biggest companies now have programs in place to act on climate and other environmental, social and governance (ESG) issues.
Discrimination with movements such as #BlackLivesMatter and #MeToo, modern slavery and human rights issues, against the backdrop of the UN’s Sustainable Development Goals, mean public expectations on businesses to play a leadership role are increasing rapidly, as are the expectations of investors, employees, customers, and regulators.
In little over the space of a decade business leaders’ roles have shifted. Whereas a few years ago leaders may have ‘kept their heads down’ to focus on business, leaving political leaders to tackle societal challenges, these days business, civic and political leaders must work in partnership.
Business leaders must engage with these challenges through their core business and see addressing societal challenges as essential to creating value. They need a nuanced understanding of major societal forces and know where and how to respond for the good of their organization and the wider world.
Business leaders need to retain a focus on these challenges – encapsulated in the 17 UN Sustainable Development Goals – because it is important for society as a whole, and also for their organizations.
Nobody wants to be on the wrong side of history!
New leadership mindset and skillset
There is a crucial role for HR leaders to think about how best to develop this new leadership mindset and skillset across the C-suite, senior executives and future leaders.
A recent study conducted by Russell Reynolds Associates in partnership with the UN Global Compact found that 92% of business leaders believe integration of sustainability issues is critical to business success, but only 4% of C-suite role specifications demand sustainability experience or mindsets.
So how can HR help business leaders today and in the future lead differently to the generation of leaders that went before them?
To answer this question it helps to focus on our conversations with CEOs and senior leaders at more than 30 organizations recognized as leading on sustainability and global challenges.
We explored two things through our research: first, how senior leaders themselves accounted for what experiences had helped shape their mindsets and develop their own skills, and second, what can we learn from innovations in leadership development different organizations have been pursuing to develop these kinds of leadership skills and mindsets. This can provide HR with key insights.
Our research found three key areas that business leaders need to address if they are to embed sustainability into their organizations.
- A new leadership mindset – today’s business leaders need to see addressing social challenges as at the heart of their job description. They are leaders in society as much as leaders of their businesses. Rather than seeing a trade-off between doing good and making money, business leaders need to aim to achieve each through the other.
- A new skillset for leading change inside the organization – CEOs see their new role as influencing change in their organizations to open up the space for others to behave differently.
- A new skillset for leading change outside the organization – CEOs now see it as their role to lead their organization’s wider ecosystem, proactively leading change in consumer and supplier behavior, industry norms and government policy.
HR’s role in developing new order of leadership
Out of these findings emerge some key takeaways for HR. Let’s dig into them.
Develop ‘head’ knowledge to ensure leaders stay informed
The new horizon to their role has required leaders to develop skills in areas that historically have not been a conventional part of the business leader’s repertoire: contributing to public debate with an informed point of view, relating well with multiple constituencies, engaging in dialogue to understand and empathize with groups and communities with perspectives contrary to one’s own, and engaging in multi-stakeholder collaboration with unconventional partners.
This means leaders can’t afford to be uninformed – they need to learn about these global challenges, what they mean for the work they and the company engage in, and how and where they should be intervening.
While of course there is an onus on leaders to propel their own development, HR and L&D can also play a part by emphasizing this need and providing appropriate opportunities such as briefings for leaders to gain this essential knowledge.
Develop ‘heart’ knowledge through experiential learning
More is required than just lectures on global trends. While each individual’s story was unique, a few key themes emerged when analyzing senior executives’ accounts of what experiences had helped shape their mindsets and develop their own skills.
For some it was formative experiences around upbringing, university and business school study.
For others it was influential mentors and participation in professional networks focused on ESG issues, or first-hand experiences like engaging with people living in poverty, personal experience of ESG challenges like the impacts of climate change, or personal first-hand experiences of the changing interests of key partners and stakeholders.
This has implications for the design of leadership development learning programs, as well as the wider management of talent management programs and succession planning.
L&D must place importance of first-hand experiences. Building literacy on sustainability and ESG issues is of course an important starting point and part of the mix, but our research suggests first-hand experiences are at the heart of what it takes for business leaders to build the emotional connection and commitment to put this agenda front and center in their work.
So the challenge is two-fold – to create structured learning and opportunities for current and future senior leaders to gain knowledge around key issues.
However, also to create first-hand experiences which are key to shifting leaders’ perspectives. Such first-hand experiences are at the heart of what it takes for business leaders to build the emotional connection and commitment to put this agenda front and center in their work.
This gives senior executives the chance to develop relationships with people experiencing some of the world’s most pressing challenges, and also with people and organizations working to help address these challenges, including key organizational stakeholders.
Reinforce that global responsibility is part of the leaders’ day job
HR departments play a vital role in reinforcing to business leaders that global responsibility counts as part of their day job – in particular, this must remain high on the agenda across the whole hiring and recruitment process.
HR, L&D, and Organizational Development teams must also value life experiences when making decisions about recruitment, career development and succession planning, and make sure this is embedded in HR processes and L&D.
When delivering reviews, mentoring experiences or feedback sessions, acting on climate, pollution, diversity, equity, inclusion and human rights must be emphasized as a core part of the leaders’ job – as important as anything else.
Leaders must feel personally reassured that acting in these areas isn’t a distraction, or something that just adds cost. It is central to creating and protecting value for the organization.
There are hopeful signs that at least some senior executives have recognized the business, environmental and societal imperatives for change and have started to shift their mindsets and practices. But there are still too many stuck in past perspectives.
HR teams, business schools, management educators and executive coaches have a key role to play in helping leaders think more broadly about how to create a better future.
For the sake of humankind, business leaders need to help accelerate these transitions, and HR professionals can help them make a difference before it’s too late.
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