Those who become leaders of organisations hardly lack ambition, however, it is clear that a new level of ambition is required. When INSEAD, a hot house of ambitious future business leaders, re-oriented its business school towards driving business education that focuses on developing responsible leaders,\u00a0navigating unpredictable markets in turbulent\u00a0times and generally exploring how business can be a force for good, it becomes abundently clear that\u00a0business organisations must become active in overcoming the world\u2019s most pressing\u00a0challenges to be successful in the future.\u00a0<\/p>\n\n\n\n
Read the news on any day and it is clear that the legitimacy of major commercial companies\u00a0is being\u00a0questioned, and coming up short. Customers,\u00a0employees, investors and suppliers are challenging\u00a0companies to respond to changing societal values,\u00a0concerns about climate\u00a0change and finite natural\u00a0resources. We are very stretched on all fronts. A\u00a0growing sense of\u00a0inequity is evident in the rising sense\u00a0that capitalism in its current form is doing\u00a0more harm than\u00a0good. These lie at the heart of growing economic and political instability which are already firmaments in the calculus of most leadership teams and investors.\u00a0<\/p>\n\n\n\n
Successful\u00a0businesses will be those that maximise their impact in meeting the needs they address,\u00a0utilise minimal resources\u00a0in doing so, and are nimble and responsive to all\u00a0stakeholders.\u00a0This is not new news. It\u2019s hard today to find a CEO who does not believe sustainability\u00a0and trust will be critical to\u00a0competitiveness in the next five years. That conviction will be driven deeper with the confirmation in the markets over recent weeks that companies with high ESG ratings beat the S&P 500 ESG Index in the COVID-19 impacted first four months of 2020. Beyond the US, MSCI’s emerging markets ESG leaders index and its more Asia-focused AC Asia ESG leaders index outperformed their parent indices significantly too.<\/p>\n\n\n\n
The COVID-19\u00a0pandemic has exposed\u00a0fundamental\u00a0weaknesses in our global system and underscored the need for a\u00a0new type of \u00a0leadership. It has certainly\u00a0highlighted our societal inequities and made evident to all that\u00a0those with less education,\u00a0less money and fewer resources are\u00a0being burdened with most of the suffering, risk of illness and\u00a0need to sacrifice. What is clear is that business cannot thrive in a world of\u00a0poverty, inequality,\u00a0unrest and environmental stress and as such, has a\u00a0vital interest in\u00a0ensuring sustainable goals are delivered. \u00a0Sadly, despite evidence that sustainable practices do differentiate winners from losers, and while the UN Sustainable Development Goals (SDGs) provide\u00a0a robust framework for addressing many of these\u00a0inequities, there is clear evidence we are unlikely\u00a0to meet them.\u00a0\u00a0<\/p>\n\n\n\n
Leadership is critical. Any organisation navigating these changeable times requires leadership teams to set the direction. Those who will be able to pull together and move forward well, will be those who already have a sense of a shared purpose. A study by Russell Reynolds of 55 sustainability pioneers in organisations underscored the importance of strong personal motivation and purpose. Combining a motivated sustainable mindset with a differentiated set of organisational capabilities rooted in a shared sense of purpose enables good leaders to drive transformation within and beyond their own organisations.<\/p>\n\n\n\n
Business is not a commercial activity\u00a0divorced from\u00a0the wider societal and environmental context in which it\u00a0operates. \u00a0To be truly successful in the\u00a0long term, there must be innovation and an ability to manage across commercial, societal\u00a0and environmental outcomes. As Al Gore has put it before: “investors who do not recognise this new reality… are in serious danger of violating their fiduciary responsibility by leaving money on the table, by not taking into account factors that can actually improve performance of companies.” <\/p>\n\n\n\n
Few need to be persuaded of the merits of businesses being a force of good. \u00a0Commitment to sustainability is at an all-time high. \u00a0However, there is a gap between rhetoric and practice. It is easier to recognise you should steer in a certain direction than to actually get there.
If personal motivation and a sense of purpose is critical, then it is clear the people in any organisation matter critically. Management teams with a track record\u00a0of integrating\u00a0sustainability into the business often have\u00a0exposure to multiple\u00a0cultures and a more well-rounded\u00a0understanding of how business works. Those who can work out how to\u00a0address these complex challenges in collaboration with\u00a0other organisations and groups, those who go beyond an understanding of their own organisations to understand the interconnectivity of their ecosystem to others, those who can look ahead are best positioned to manage risk and spot growth opportunities over the long term.<\/p>\n\n\n\n
For businesses to truly transform into forces of good, we need to change, and change is never easy to deliver. Corporate leaders need not only to see the new opportunities and risk, but also\u00a0possess the courage to\u00a0challenge comfortable familiar approaches\u00a0and a willingness to\u00a0ask why things cannot\u00a0be done differently. Support from seeking out the best available knowledge\u00a0to move beyond today\u2019s best practice\u00a0towards tomorrow\u2019s\u00a0required practice help teams get comfortable about not having all the\u00a0answers and still steer into the unknown.<\/p>\n\n\n\n
In managing through complexity, we cannot emphasise enough how important it is that companies plan for the long term. Setting goals into the distant future today may look audacious – and in navigating a volatile environment, there will be set backs along the way but organisations not planning for the longer term miss opportunities\u00a0to drive innovation, develop human capital, expand into\u00a0new markets, grow their customer\u00a0base, create operational efficiencies and effectively manage\u00a0social and environmental risks. <\/p>\n\n\n\n
Most share the belief that it is common sense to assume that\u00a0if you take from this world,\u00a0you also\u00a0need to match that by putting something back in. \u00a0How we put it back may differ but the most important thing is, we do. Long term success will not be possible without this, so it is also critical that we seek and support those who do.<\/p>\n","protected":false},"excerpt":{"rendered":"
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