How to Develop Sustainable Leadership Acumen

Leadership StrategiesSustainable LeadershipIndustry TrendsCareer AdviceEnvironmental, Social, and GovernanceSustainability
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May 18, 2022
9 min read
Leadership StrategiesSustainable LeadershipIndustry TrendsCareer AdviceEnvironmental, Social, and GovernanceSustainability
EXECUTIVE SUMMARY
The sustainability agenda is here to stay. We set the skills leaders will need to help their organizations become more sustainable.
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To future-proof your business, it is vital to grow and develop sustainability-competent leaders who understand how and why sustainability issues are salient to long-term business success. These leaders need to not only understand the shifting structural dynamic of their industry, but also of global markets.

While organizations are increasingly vocal about their sustainability credentials and plans, there is a marked difference between brand management and real value creation or harm reduction. Unfortunately, 45% of C-suite leaders admit that the driving force behind their company’s sustainability strategy is brand management, and only one in five say it is firmly rooted in real value creation. This underscores the importance of enabling and developing next-generation leaders to push the sustainability agenda forward. These leaders will be key to ensuring that their organizations maintain focus, especially when economic headwinds begin to blow, and make sustainability core to business strategy and operations.

Sustainable leaders–individuals that effectively integrate sustainability into organizational strategy and operations–combine a sustainable mindset with a differentiated set of capabilities that have enabled them to drive the transformation needed to achieve sustainability and commercial outcomes [Figure 1].

Figure 1: The RRA Model of the Sustainable Leader

The RRA Model of the Sustainable Leader

 

For organizations to make progress on sustainability and ensure that it becomes a true organizational competency, they must invest in the development of their next-generation leaders. The Sustainable Leader model defines the skills and behaviors required to establish this competency, and this article explores how to develop those skills. When comparing the educational and career experiences of sustainable leaders  to a group of CEOs from Global Fortune 500 companies that perform poorly on sustainability metrics, we found that  sustainable leaders have more international and cross-functional experience. 

They were substantially more likely to have studied abroad (36%) than their counterparts (4%) and were also substantially more likely to have worked on two or more continents (45% vs 16%). Furthermore, they were more than twice as likely to have significant career experience in two or more functions overall (64% vs 30%), and notably more likely to have worked in operations and supply chain (55% vs 32%).

 

Figure 2: Experience of sustainable leaders compared to unsustainable leaders 

Experience of sustainable leaders compared to unsustainable leaders 

 

While it is hard to infer causality, it would be reasonable to assume that sustainable leaders have benefitted from their exposure to multiple cultures and a more well-rounded understanding of how business works. Indeed, many of the sustainable leaders we spoke to as part of our research, Leadership for the Decade of Action, made precisely this point as they discussed their own experiences. 

Organizations should consider the following leadership development actions:

  1. Identify opportunities to embed discussion about sustainability into the core leadership development curriculum. This should not simply be added as a separate module but woven throughout other modules like those on people leadership, strategy, or innovation.

  2. Ensure leadership development programs give leaders exposure to a range of stakeholders, especially those that are likely to have substantially different worldviews and life experiences.

  3. Identify relevant experiences (roles or projects) that will foster a sustainable mindset and help leaders hone the critical competencies of multi-level systems thinking, stakeholder inclusion, and long-term activation.

To help successfully take these actions, below we provide guidance on understanding what sustainability looks like in practice, and how to identify or create development opportunities that will help build sustainable leadership acumen.

Understanding what sustainability looks like in practice

Sustainability encompasses both social and environmental outcomes – everything from human rights, worker conditions, and reducing economic, gender, and racial inequality, to reducing or reversing the effects of pollution, deforestation, and climate change. Given the role business plays in society and the impact it has on people and the planet, sustainability is not something to be managed as a side project; it is core to how businesses need to be run. This means that there are a large array of responsibilities and experiences that next-generation leaders can benefit from in their journey to become sustainable leaders. These responsibilities and experiences can be categorized as those related to people, products, processes, partners, and profits [Figure 3].

Figure 3: Five Ps Framework

What does embedded sustainability actually look like?

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People

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Product

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Process

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Partners

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Profits

Skillsets, organization structures, and leadership culture Creating new products or services or redesigning existing ones Reconfiguring operational practices and processes Relationships with suppliers, clients, and other collaborators Capital allocation, investment decisions and corporate strategy
  • Building diverse and inclusive teams
  • Holding leaders accountable to diversity outcomes
  • Considering sustainability acumen and mindset when hiring and promoting leaders
  • Holding leaders accountable to sustainability metrics
  • Innovating to produce more sustainable products or services that help improve customers’ sustainability
  • Reconfiguring existing product design, packaging or distribution to reduce waste
  • Using sustainability lens to identify new customers or markets
  • Minimizing emissions and waste from value chain
  • Embedding sustainability metrics into product/service design and roll-out scorecards
  • Applying a sustainability lens to processes for identifying risks and opportunities
  • Redesigning processes for gathering employee and other stakeholder input
  • Working with sustainable suppliers and holding them accountable for sustainable practices
  • Establishing mutual benefit partnerships and JVs with civil society and academia
  • Cross industry partnerships to drive change across ecosystems
  • Embedding sustainability lens in allocation of capital business investments, and long-term strategy development
  • Using longer-term time horizons for decision-making, including consideration of lifetime costs for both CapEx and OpEx
  • Investing in research and development in support of sustainability strategy

Facilitating development opportunities

The 5 Ps Framework provides a helpful guide for assessing the level of experience that next-generation leaders may have already had. Our research finds that 40% of next-generation leaders have had exposure to three or more job responsibilities with a connection to improving environmental or social outcomes.

The framework also acts as a good guide for designing “crucible” experiences that will stretch and develop your leaders. International or functional rotations that form the backbone of many experiential leadership development programs are natural starting points and should be supplemented with bolder opportunities, like rotating into a supplier or customer’s organization or taking ownership of a product development opportunity [Figure 4].

Figure 4: Crucible experiences and how to amplify sustainable leadership lessons

5 Ps Connection

 Development Opportunity 

People Partners

Work in another function or line of business 

Why it matters: This provides a different perspective on how the business operates and, if designed well, should also increase the leader’s exposure to different stakeholder groups. 

How to make it work :

  • Ensure the function or line of business is notably different from the leader’s existing area.
  • Pick areas that are either more advanced on sustainability or set clear sustainability objectives for the leader as they take on the role.
  • Include objectives around building relationships and building diverse teams.

People Product Process Partners Profits

International experience    

Why it matters: Such experience is powerful for providing a different frame of reference for the leader. The dynamics affecting a business – not least what stakeholders expect – are often varied between regions. As such, this helps the leader understand and question the assumptions held in their home region. Moreover, international experience provides exposure to other leaders that have different cultural backgrounds and associated ways of thinking through problems and opportunities. 

How to make it work :

  • Ensure the region the leader moves to is significantly different from their home region (e.g., a European leader moving to Southeast Asia or Africa). 
  • Make sure they are not positioned as the “ex-pat” coming in to teach the locals lessons from their region, but as someone coming in to learn from and collaborate with others. 

People Partners

Rotation to a supplier, customer, or other partner 

Why it matters: Businesses sit within and are reliant on their eco-system. Collaboration with theorganizations around them is critical for success. Secondments to other organizations are a powerful way to help a leader gain a better understanding of a new ecosystem, build out their professional network, and expose them to diverse ways of working and thinking. Additionally, such opportunities are often fertile grounds for innovation.

How to make it work :

  • Select partners that are critical to future strategy and that will provide a very different vantage point. 
  • Choose partners with a strong lens on sustainability. 

People Process Profits

Turning around an underperforming business 

Why it matters: Much more so than simply taking on a “steady state” business, taking on an underperforming business creates a need (and license) to analyze the business from multiple angles. This creates a natural platform to cast the net wide in terms of engaging with a range of stakeholders and will challenge the leader to question their assumptions about the drivers of business performance. 

How to make it work :

  • Make sustainability a core part of the turnaround objective, i.e., success should not simply be getting the business back to profit. 

Product Process Profits

Investing in research and development in support of sustainability strategy

Why it matters: Centering sustainability strategy in the business ensures progress is consistently made towards strategic goals. Creating a dedicated R&D role or team with a focus on sustainability holds senior leaders accountable for meeting goals and keeps innovation at the forefront of strategic decision-making.

How to make it work :

  • Create specific KPIs to measure team/department/initiative progress, embrace innovative approaches, and communicate on status often. Use this engine to drive sustainability strategy forward if momentum wanes.

Product Profits

Designing and/or launching a new product or service line 

Why it matters: Building something from scratch allows a leader to understand all the puzzle pieces and decide how best to put them together. This provides a natural opportunity to bring a sustainability lens to their work. 

How to make it work :

  • Make sustainability a core part of how success of the new product or service line is measured. 

Turning this framework into action

The recommendations in the table above are tried and tested leadership development mechanisms. The strategies offered are no different from leadership development strategies; it is the focus and intent that makes them effective in furthering sustainability strategy and leadership development. These recommendations are not aimed at issue-based leadership development, but meant to help next-generation leaders be more effective in their broader ecosystem.

However, these recommendations are only as strong as their application. Interacting with suppliers and other stakeholders who have a strong lens into sustainability strategy is a good step, but it only works effectively if translated to the rotating executive. It is important to keep sustainability at the forefront of the day-to-day while enacting these recommendations. Having clear sustainability KPIs can help leaders have a roadmap for success when it comes to sustainability strategy.

These recommendations are intended to promote new experiences, encourage empathy and openness, and expand leaders’ perspectives on sustainability, resulting in more holistic leadership that values both organizational and environment health.

Further Reading

Sustainable Leadership: Talent requirements for sustainable enterprises

How to Become a Sustainable Leader

Assessing and Selecting Sustainable Leaders

Divides and Dividends

Leadership for the Decade of Action

 


 

 Authors

  • Tom Handcock leads Russell Reynolds Associates’ Center for Leadership Insight. He is based in London.
  • Beth Hawley is member of Russell Reynolds Associates’ Center for Leadership Insight. She is based in Chicago.
  • Emily Meneer leads Russell Reynolds Associates’ Social Impact and Sustainability practices. She is based in Portland.