A study carried out by Russell Reynolds Associates and the United Nations Global Compact, Leadership for the Decade of Action, identified a blueprint for sustainable leadership. It revealed that to deliver sustainability outcomes alongside financial success, leaders must combine a sustainable mindset with four differentiated competencies: multi-level systems thinking, stakeholder inclusion, disruptive innovation, and long-term activation. How equipped are leaders to rise to this challenge? Our research shows that across many organizations a lack of leadership is undermining progress and creating obstacles to change.
How equipped are leaders to rise to this challenge? Our research shows that across many organizations a lack of leadership is undermining progress and creating obstacles to change.
Manon van Beek
CEO, TenneT Holding B.V.
Source: Russell Reynolds Associates and the United Nations Global Compact, Leadership for the Decade of Action
Culture and Complexity Hinder Progress
In our study, the greatest barriers to embedding sustainability across business strategy are slow-changing company culture and organizational complexity, followed by a lack of drive from senior leadership and a lack of organizational investment. As C-suite leaders have a broader view of the organization’s stakeholders, they are more likely to note external barriers than employees or next-generation leaders. Twenty-nine percent of C-suite leaders noted short-term pressure from investors as an obstacle to change. A further 25% hold the belief customers “won’t want this.”
Saori Dubourg
BASF, Member, Board of Executive Directors.
Source: Russell Reynolds Associates and the United Nations Global Compact, Leadership for the Decade of Action
Leaders Lacking Soft Skills
Soft skills are more in demand than ever before. Leaders need the mental dexterity, empathy, and courage to maintain confidence in an ever-more complex operating environment—and spur action on sustainability. Our survey asked respondents to indicate whether they believe the senior leaders at their organization display each of 10 important attributes: Humility; Self-awareness; Authenticity; Empathy; Leading by Example; Inclusiveness; Purpose; Hopefulness; Humanity; and Transparency.
Only around a third of employees say the senior-most leaders at their organization exhibit transparency, humanity, and hopefulness. Even fewer say they display humility (23%) and self-awareness (24%), or that they are authentic (29%) and lead by example (29%).
Stakeholder empathy is critical to understanding the ecosystem in which a company operates. Without it, leaders will be unable to identify their organization’s sustainability risks and opportunities. One CEO took the entire board to Brazil for such purposes. “I could not explain the issues and corruption we were facing. I had to take them there and show them what it means,” she said. Meanwhile, a chair at another company brought outside stakeholders into the boardroom to offer firsthand exposure to critical issues in other countries.
Source: Russell Reynolds Associates, The Board’s Role in Sustainable LeadershipThis is unlikely to simply be a problem of perception—even respondents who are part of senior leadership do not typically see these attributes in their senior executives. Taken alongside other findings (e.g. CEO commitment to sustainability), it indicates that employees lack confidence in the capability and drive of their senior-most leaders to progress sustainability actions. Leadership is always on display and executives are increasingly challenged to lead in a more authentic, transparent, and humble manner. How would you measure up—and would your employees agree?
Action Items
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In a major global survey of C-suite executives, next-gen leaders, and employees, we reveal how leaders can grasp this opportunity:
The study was conducted with 9,500 employees and next-generation leaders in 11 growth and mature markets from April 16 to May 12, 2021.