How to Build Sustainable Business Leadership in a Post-COVID World
- COVID-19 will revolutionise how the world works, from healthcare to remote working.
- It’s vital businesses allow themselves to operate and evolve sustainably for the resilience of our planet.
The COVID-19 pandemic will forever change how successful businesses operate and grow. The legitimacy of major commercial organisations—and the people that lead them—is being questioned in new and fundamental ways. There is now an urgent need for a new model of business leader: one that makes the long-term sustainability and resilience of our world a top priority.
Now and in the future, successful businesses will be those that meet the needs of as many people as possible, utilise as few resources as possible and engage and are responsive to as many stakeholders as possible. This is not only the right thing to do but the smart thing to do. Business simply cannot thrive in a world of poverty, inequality, unrest and environmental stress.
Over recent years, we have seen conversations about sustainable business grow louder. But this has not always translated into action on the ground. Today there exists an unfortunate gap between rhetoric and reality. Analysis by the United Nations Global Compact shows that while 92% of CEOs believe integration of sustainability will be important to the future success of their businesses, only 48% say they are actually implementing sustainability in their operations.
At the same time, what organisations value or require when they select new leaders has big consequences for organisational strategy and culture. Despite changing stakeholder expectations, sustainability is not widely embedded in leadership expectations or culture. Analysis by Russell Reynolds Associates found that in only 4% of executive and non-executive role specifications was sustainability experience or mindset an actual requirement. This must change if we are to make the exponential change and innovation needed to emerge from the COVID-19 crisis stronger and make real progress towards the Sustainable Development Goals.
It is now time to radically rethink how CEOs and board leaders are selected, with more emphasis on finding sustainable leaders who will drive change on the ground. How can you identify these leaders?
Our analysis of 55 sustainability pioneers—CEOs and board members with a track record of integrating sustainability into business strategy—reveals the attributes that transform a leader into a sustainable leader. It reveals that sustainable leaders combine a sustainable mindset—a purpose-driven belief that business is not a commercial activity divorced from the wider societal and environmental context in which it operates—with four differentiating leadership attributes:
- Multi-level systems thinking—They incorporate the interplay of business, societal and environmental systems and drive decisions that turn sustainability into a competitive advantage.
- Stakeholder influence—They do not seek to manage stakeholders, rather they actively include them in defining and actioning decisions.
- Disruptive innovation—They possess the courage to challenge traditional approaches and cut through bureaucracy to drive the disruptive innovation needed to do away with the profitability-sustainability trade-off.
- Long-term activation—They do not simply have an orientation towards the long term, they set bold sustainability goals and rigorously drive concerted action in their pursuit.
Expectations of CEOs, executives and board members are changing. If the leaders we studied have made one thing abundantly clear it is that sustainability is a leadership issue and imperative to long-term success. CEOs and boards need to be ambitious in driving a new vision for leadership. And they need to develop and foster sustainable leaders in their ranks. This is not a matter of hiring a single individual to own sustainability. The systemic challenges the world faces today mean that sustainable leadership cannot be confined to a small minority; companies must instead cultivate sustainable leadership at all levels. This is not something that can wait. It is not a conversation for tomorrow, it is a conversation for today.
Lise Kingo, Chief Executive Officer, United Nations Global Compact
Clarke Murphy, CEO, Russell Reynolds