BGA | BUSINESS IMPACT
t the close of the United Nations (UN) Climate Change Conference in 2021 (COP26), an article in the Financial Times reported that although global executives welcomed the deal reached at the close of the summit, many felt that it didn’t go far enough. Indeed, the
doing so is key to how they create and add value for their organisations, their investors and their other stakeholders. They are leaders in society as much as leaders of the business. Rather than seeing a trade-off between doing good and making money, leaders need to aim to achieve each through the other. This shift in thinking around the scope of the leadership role of today’s senior executive is leading to a shift in emphasis regarding the kinds of activities to which business leaders devote time and energy, both inside and outside the organisation. Leading culture change in organisations More and more leadership teams have been putting action on global sustainability challenges at the centre of their corporate strategies. Bringing such strategies to life requires substantial cultural change in organisations that have been geared towards maximising short-term returns to shareholders above all else. This creates a leadership requirement for facilitating the kind of cultural change that helps all employees across an organisation to prioritise action on sustainability. The chief executives we spoke to talked of seeing their own role in influencing change in their organisations in terms of opening up the space for others to behave differently – through the goals they articulated and the rationales they developed for pursuing them; the stories and people they celebrated; the conversations they started; the questions they asked; what they were seen to spend their own time doing, and which individuals and groups got recognised and rewarded and for what. All this helped create space and safety for others in the organisation to depart from the norm and embrace action that helped achieve sustainability goals. But our interviews showed that senior executives are also recognising their leadership role in the wider ecosystem around their organisation. They’re not just taking their external environment as a given they have to respond to, but something they have a role and responsibility in shaping actively – leading change in consumer and supplier behaviour, industry norms and government policy. Some are leading collaboratively with industry competitors, NGOs and governments where challenges need to be tackled and only collective, systemic solutions will do. This new horizon to their role has required leaders to develop skills in areas that have not, historically, been a conventional part of their repertoire: contributing to public debate with an informed point of view; relating well with multiple constituencies; engaging in dialogue to understand and empathise with groups and communities with perspectives different to their own
article continued, business leaders pointed out that some companies are showing greater urgency than governments when it comes to global warming. It’s not just climate change; many other global challenges have been forcing their way onto the management agenda too: biodiversity collapse, #BlackLivesMatter, #MeToo and the genocide in Xinjiang in western China. We tend to think these kinds of challenges are for governments to deal with – and they are, but not alone. Increasingly, citizens (whether customers, employees, or users of public services) expect public and private sector organisations to be playing a leadership role in tackling global challenges too. And more and more business leaders are responding and beginning to play a broader leadership role – leading change in their organisations and speaking out on public platforms; using their influence to advocate for wider change. To explore exactly how business leaders have been finding their leadership role changing in practice, Hult International Business School has led research that engages with CEOs and senior executives at organisations recognised as leading on sustainability and global challenges. Involving interviews with CEOs at the forefront of this trend, this suggests that many of today’s business leaders have come to recognise they need a different mindset and skillset to their predecessors. What implications does this have for how we develop business leaders? And what does that mean for business schools? A new leadership role and mindset A generation ago, a leader’s role was to keep their head down and focus on the numbers. Challenges in society were the job of political and activist leaders. For business leaders to get involved would be a distraction; it would lack legitimacy and would end up adding cost to the bottom line. It wasn’t their job. But in today’s world, many business leaders have come to realise that they need a different mindset to be successful. They need to view "addressing societal and sustainability challenges" as sitting at the heart of their job description; it is core to their job to be playing a leadership role, alongside civil society and political leaders, in tackling global challenges. And
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