Today, there is widespread consensus that short-termism on the part of business leaders is not serving society, the environment or even business itself.
In response, there have been many calls for ‘responsible’ leadership. These are a reminder that ethics, integrity and high business standards are essential characteristics of business leaders if they are to regain the trust of society. But re-orienting business leadership towards long-term objectives will take a lot more than that. When we take these considerations into account, businesses become much more complex to manage with trade-offs and conflicts between long and short term priorities.
So what are the characteristics of the Global Executive in leading for the long term? Tomorrow’s leader is a high integrity individual who:
…. Sees the connections
An effective leader sees the clear links between business sustainability, societal progression and environmental protection. The business world can no longer afford to be insular. The relentless drive for short-term performance must be balanced by concern for long-term outcomes.
… Sets bold targets to raise the bar
There is no room for a ‘business-as-usual’ attitude or incremental change. Companies such as Unilever with its Sustainable Living Plan and Marks and Spencer with Plan A, among others, have set comprehensive, specific, quantifiable and far-reaching targets across all brands in their portfolios. They are committed to large-scale organisational transformation to position their companies for harmonious coexistence with the communities in which they operate.
… Sees the possibilities for shared value
Rather than being overwhelmed by the enormity of problems and seeking to manage them as risks, these individuals are able to see the possibilities for business and societal interests to be mutually self-supporting. This takes curiosity, courage and open-mindedness.
… Embraces difficult problems
Effective leaders tackle the challenges that arise when setting ambitious long-term goals, and actively engage people in making progress on problems. Setting challenging but necessary goals mobilises employees to face, rather than avoid, tough realities and conflicts.
… Balances head and heart
Many business leaders are accustomed to rational decision making, yet it is also easy for them to slip into a purely compassionate response to social and environmental problems with virtually no real business case. Tomorrow’s leaders can see very clearly the difference between a solely compassionate reaction and the new business drivers, and harness the emotional turbocharge that comes from aligning good business with doing good.
… Is a “tri-sector” athlete (a term attributed to Joseph Nye of the Centre for Public Leadership at Harvard)
These individuals are able to operate effectively across three sectors: business, society and government. The social and environmental problems that are impacted both positively and negatively by global business operations are too complex to be solved by businesses alone. To achieve long-term sustainability, business leaders will need the ability to work in a different way with different sectors.
The Challenge Ahead
For the majority of businesses, there is still very much a focus on traditional short-term financial measures of performance. CEOs often approach challenges to long-term sustainability with a risk mitigation attitude aimed at making merely incremental adjustments to the status quo.
Why is this the case? Demands for short-term performance are often so intense that there is little time to reflect on longer-term priorities or to change direction. Public policies, investment environments and ownership structures often constrain even those business leaders who are committed to a long-term focus.
And getting these issues onto the executive team agenda will start with the recognition that long-term business interests are fundamentally and inextricably linked to environmental, social and economic stability.
