Leaders Today Need To Have Sustainable Mindset: Clarke Murphy
In the conversation with BW People, Clarke Murphy, CEO, Russell Reynolds Associates, New York emphasizes changing dynamics of leadership; sustainable activation; and future of work & life
These unprecedented times have made unexpected changes in the leadership dynamics of the whole world. Can you share key highlights or takeaways from the “Leadership for the Decade of Action” report that you have launched in collaboration with the United Nations Global Compact?
The research paper, “Leadership for the Decade of Action,” reveals an urgent need for transformational business leaders who look beyond near-term profits to make the long-term sustainability and resilience of the world a top business priority.
According to the UN Global Compact, only 21 percent of CEOs feel that business currently plays a critical role in achieving the 17 Sustainable Development Goals that were set up in 2015 to offer a blueprint for achieving a better and more sustainable future for all. Analysis by Russell Reynolds Associates also reveals that in only 4 percent of non-executive and senior executive appointments is sustainability experience or mindset a requirement.
To identify how organizations can make sustainability core to the DNA of their leadership teams, Russell Reynolds Associates and the UN Global Compact carried out in-depth interviews and background analysis on a group of close to 60 sustainability pioneers—CEO and board members from across continents and industries with a notable track record of focusing on and making progress towards sustainability goals in tandem with commercial results.
Our analysis defines the characteristics, actions and differentiating leadership attributes that fuel sustainable leaders’ success.
They combine a sustainable mindset with a set of differentiated leadership attributes:
- Multi-level systems thinking – They incorporate the interplay of business, societal, and environmental systems and drive decisions that turn sustainability into a competitive advantage.
- Stakeholder influence – They don’t seek to manage stakeholders, rather they actively include them in defining and action-oriented decisions.
- Disruptive innovation – They possess the courage to challenge traditional approaches and cut through bureaucracy to drive the disruptive innovation needed to do away with the profitability-sustainability trade-off.
- Long-term activation – They do not simply have an orientation towards the long term, they set bold sustainability goals and rigorously drive concerted action in their pursuit.
Why is it essential to integrate sustainability into business strategy? How does it impact an organization set up and its stakeholders?
Business is not separate from society. It is clear that business thrives when society thrives. There are many social and environmental issues that loom large today. If businesses do not engage with them, they risk contributing to a world in which there are fewer opportunities and more challenges. Taking a long-term view is critical and has also been demonstrated to (for example in research by the McKinsey Global Institute) financial performance, shareholder returns, and job creation.
Leaders also understand that their stakeholders – employees, customers, shareholders, regulators, etc. – increasingly expect them to make sustainability core to business strategy. Top talent increasingly does not want to work for companies that don’t have a clear purpose; shareholders want to invest in sustainable companies; customers want to buy sustainable products and services, and regulators will increasingly reward sustainable business practices.
As it relates to organizational setup the technical capabilities and experience sets one needs will vary by industry. But leading companies have two things in common – first, they understand that this is a leadership issue, and they hold their most senior leaders accountable to it; and secondly, they understand that you have to embed it into the decision making frameworks and operations of the company. For example, leading consumer companies have made sustainability a core component of R&D and product launch processes.
How do you go about embedding or encouraging or building sustainability into a strong leadership culture?
Change starts at the top. You need a board leader or CEO to drive and evangelize the issue. But these leaders know that they alone cannot achieve lasting change. They work to make sustainable leadership an expectation for their most senior leaders. They do this in two ways: they make sustainability outcomes part of the objectives their leaders are measured on, and they make tough talent decisions – hiring, promoting, and letting leaders go – in part based on their commitment to and impact on sustainability.
What can existing senior management and leaders do in order to adopt sustainable leadership practices?
As individual leaders need to consider the 4 critical sustainable leadership attributes and ask themselves how they can adopt those. For example, leaders should ensure they are actively building diverse networks and genuinely learning about varied stakeholder perspectives. Moreover, they should ensure they are well educated on the range of sustainability issues within their industry.
As organizations think about this question more systemically, they need to embed sustainability into how they recruit, reward, and develop new leaders.
How will organizations evolve – in the post-COVID-19 environment?
The current crisis has acted as a catalyst for organizations to rethink business models and other operational principles. As organizations work to change how they operate there is a great opportunity to engineer sustainability into those strategies and operating models. Additionally, this crisis has served to highlight some of the inequalities baked into our societies and economies; and business leaders are increasingly being challenged to do more to help solve them.
What trait you think would be much important for leaders to have in the new world?
Leaders today need to have a sustainable mindset: the purpose-driven belief that business is not a commercial activity divorced from the wider societal and environmental context in which it operates, and that to be successful in the long term, leaders must innovate and manage across commercial, societal and environmental outcomes.
To be clear though, while that mindset is hugely important, it only has an impact when combined with the right set of skills to deliver sustainable business outcomes.
Diversity and inclusion are not a new topic but has taken an urgent turn in the country. Please share your thoughts about that.
Organizations of course need to be speaking up about issues relevant within the countries that they operate. And it is important they create the forums within their own organizations to ensure underrepresented groups can have their experiences heard and understood.
While this is a good foundation, in order to make real progress organizations need to examine and redesign how talent decisions get made in order to minimize the impact of bias and other dynamics that may adversely affect under-represented groups.
How are organizations addressing the issue of LGBTQI inclusion at the workplace? Any recommendations?
First, I think it is critical to establish a clear mindset and strategic imperative related to diversity, equity, and inclusion. It needs to be a core part of your organization’s strategy – and intrinsically believed to be the right thing for both the business and society.
Think about how to make your practices more broadly applicable. For example, if you are discussing allyship for the LGBTQ+ population during Pride, consider how you translate that allyship in meaningful ways for your employees. And, perhaps most importantly, avoid making tradeoffs that will hurt you in the long run; attempt to make these efforts additive.
Our 2019 D&I Pulse survey highlighted three areas companies should focus on to attract, retain and develop their LGBQT+ community:
· Raise awareness
· Mitigate hostility by managing risks
· Build & foster networks
Building an inclusive work environment takes time and commitment from leaders, and it is important to educate and encourage non-LGBQT+ employees to embrace the effort, too. Ultimately, the changes that come about from these efforts make the workplace better – and more inclusive – for everyone.
Do you have a powerful quote or motto that keeps you inspired and happy?
Our mission as a firm is to improve the way the world is led. That is what drives me in my work, and it is the purpose that my colleagues rally around.