STRATEGY ESG
Developing this new leadership mindset and skillset requires thinking from business leaders at all levels. A recent study from the UN Global Compact and Russell Reynolds Associates, Leadership for the Decade of Action, 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. As they look to translate strategy into reality, how can today’s business leaders learn to act differently to earlier generations?
The new agenda
For the future of humankind A fundamental strategic shift demands a new leadership mindset and skillset Writing Matt Gitsham
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n little over the space of a decade, business leaders’ roles have shifted dramatically. A few years ago, leaders may have ‘kept their heads down’ to focus on business, leaving political leaders to tackle societal challenges – but these days, business, civic and political leaders must work in partnership. Business leaders must engage with major challenges such as climate change and other environmental, social and governance (ESG) issues through their core business, and recognize that addressing societal challenges is essential to creating value. Leaders need to have a nuanced understanding of major societal forces and know where, and how, to act for the good of their organization and the wider world.
We held conversations with chief executives and senior leaders at more than 30 organizations recognized as leading on sustainability and global challenges. We explored two things. What experiences do senior leaders credit for helping to shape their mindsets and develop their skills? Second, what lessons can be learned from innovations in leadership development as organizations they pursue these new kinds of leadership skills and mindsets? Our research found three key areas that business leaders need to address if they are to embed sustainability in their organizations.
1
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.
2
A new skillset for leading change inside the organization Chief executives see their new role as influencing change in their organizations to open up space for others to behave differently.
Leaders need to have a nuanced understanding of major societal forces
3
A new skillset for leading change outside the organization Chief executives 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. From these findings emerge some key takeaways for business leaders. Firstly, they must develop a nuanced understanding of the major societal forces shaping our world. 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
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