There is growing awareness – prompted by the recent financial crisis and the finite nature of the earth's resources – that businesses are inextricably linked to the health and prosperity of society and the planet, and that the commercial future of an organisation depends on leaders recognising this complex interdependency in their decisions and actions.
Organisations that fully embrace this way of operating are compelled to rethink the role and nature of leading. Serving a wider community of interest, rather than the exclusive pursuit of growth and shareholder value, is a fundamental change in orientation, but one which effective leaders, in my experience, have always understood. Some visionary HR departments are already rethinking their approach to leadership development to better reflect this changed world view. I am going to argue, however, that few have grasped the scale of the shift that is required.
Ian Cheshire, CEO of multinational retailer Kingfisher, said: "it is very hard when you are inside one paradigm, to really visualise a different one." The paradigm we now inhabit sees organisations as 'systems' with machine-like characteristics that can be controlled and driven (by superstar leaders) in order to achieve the required shareholder return. These beliefs are the basis of management ideology. They rest on the flawed assumption that the traditional 'sciences of certainty' can best explain our experience of organisations and how to manage them; that management is, in fact, a scientific discipline.
Originating with Taylor in the 1900s, they have been refined and promulgated by the management consulting industry and business schools ever since. Such ideas are poorly suited to the commercial reality our leaders now face. Learning about 'best practice' principals and elaborate planning tools is unlikely to develop more effective leadership in the face of uncertainty and the messy unpredictability of daily business life.
A different perspective is needed to prosper in this environment. Organisations are not predictable systems, but messy processes of people engaging in everyday interaction and conversation. Leadership is about putting sustainability at the core of the leader's day to day activities by focusing on four, equally important and inter-dependent relationships:
Inter-personal – attending to personal purpose, the impact of one's own leadership gestures and psychological and physical health. Our research shows that leaders who manage their own sustainability first, have greater capacity to build long term sustainability at an organisational, societal and environmental level.
Organisational – attending to the patterns of the conversation in the organisation, to ensure its innovative capacity and long term endurance, as well as the quality of one's own participation in it.
Societal – ensuring the organisation creates social value and prosperity.
Ecological – minimising the environmental impact of the organisation.
We believe effective leadership is concerned with developing high-quality relationships across all of these dimensions. This generates sustainable leaders, who in turn create sustainable organisations.
A delegate to one of our recent seminars captured the mood. She said, 'We cannot go on like this'.
We cannot go on thinking that our organisations are separate from the wider social and the natural ecology in which they operate and that they are ruled by the sciences of certainty. Our fear is that unless we start to visualise a different kind of leadership, we will slide into another crisis that will cause immeasurably greater economic and social damage than the last one.
Tim Casserley is founder of Edge Equilibrium