How much is your HR strategy adding to the triple bottom line – people, profit and planet? That was the question posed by Dublin City University’s Leadership and Talent Institute’s recent conference on ‘leadership for a sustainable world’.
HR magazine went along to find out about HR’s role in building the leaders we need for the future.
Sort out your succession planning
Boards are becoming increasingly wise to the risk posed by ineffective succession planning, according to Patrick Wright, Thomas C Vandiver bicentennial chair at the University of South Carolina’s Darla Moore School of Business. “Boards recognise that one of the most important responsibilities they have is to choose the next CEO,” he said. “There’s tremendous risk around that choice, and tremendous upside for the right choice.”
That awareness means boards are becoming “concerned about the lack of bench strength” when it comes to choosing the next C-suite hire, and they are increasingly looking for HR directors to provide unbiased information about potential internal candidates, Wright said. “Really good business leaders are often terrible HR managers, and not as good at spotting talent as they think,” he added, explaining that too much HR time is often focused on the development and retention of high potentials, rather than identifying them in the first place. This means the right talent may not even be in the mix, particularly from a diversity standpoint.
Think about what adding value really means
We need to move beyond the paradigm that businesses exist simply to produce profit for shareholders, said Stuart Woollard, managing partner of professional services firm OMS. “Organisations that have a societal motive generate value for themselves,” he said. “If we are all about shareholder return we might generate profits, but in the long term we won’t maximise value, and may even erode value for shareholders.”
He urged leaders to think more about what adding value really means, citing reducing cost as the area HR has been most focused on for too long. “Societal value is generated by producing the best quality products and services at the lowest possible cost, to the environment and beyond,” he said. “Most CEOs are stuck in the paradigm of being there to serve shareholders, but society is redefining [acceptable] organisational behaviour. How do we reconcile creating value for society and our own organisation?”
Put purpose front and centre
Doug Baillie, who has just retired from his CHRO role at Unilever, spoke about the need for organisations and leaders to put genuine purpose at the heart of everything they do. “We need values-based leaders not rules-based leaders,” he said, citing the requirement for leaders to be able to deal with a world in flux, including global power moving east and south and environmental pressures leading to social disorder.
“What can business do?” he asked. “You have two choices: put your head down, say it’s not your issue and be opportunistic, or look reality in the eye and become part of the solution. Businesses can no longer be bystanders in a system that gives them life in the first place.” He said that at Unilever every brand is working on having social mission, and that those brands with a strong and established social purpose are the company’s fastest growing.
To succeed in this new world, Baillie explained leaders have to be authentic, resilient, adaptable, systemic thinkers and results-orientated, with a sense of purpose at their core. “[Leaders] need to be committed, they need to be courageous, and they need to help each employee find their own contribution and purpose,” he said.