Live from Davos 2020, Clarke Murphy, CEO of Russell Reynolds Associates, and Lise Kingo, CEO of the UN Global Compact, explain why great leadership is critical to delivering on the 17 Sustainable Development Goals by 2030. Hear how Russell Reynolds Associates will carry out research with the UN Global Compact to understand more about leaders who are effective in driving sustainability.
Dan Thomas: Well, good afternoon from Davos, Switzerland. I’m Dan Thomas from the UN Global Compact, and we’re here live in the SDG Media Zone for this important session on leadership in the Decade of Action to deliver the Sustainable Development Goals.
I am joined by Clarke Murphy, who's the CEO of Russell Reynolds, and Lise Kingo, the CEO of the United Nations Global Compact.
First of all, Lise, we have been just today launching SDG Ambition, a new global impact initiative to drive businesses and challenge businesses to do more on the Sustainable Development Goals and really drive this Decade of Action.
What is it about leadership that we need in order to drive this ambition, and what's lacking and where do we need to go?
Lise Kingo: So basically what we are doing is trying to drive a major transformation, a major change process across the whole private sector to make companies transition to be more aligned with the thinking behind these 17 wonderful goals. And every time you need to change anything in an organization, it takes really strong leadership. So none of this change is going to happen without a really strong CEO and a strong management team that has a holistic perspective on how to run a business and also a board that understands the importance of the company actually being a force for good in the world. … So the whole leadership dimension is really important. And that's what we are beginning to discuss now, which is what kind of leadership we need in order to actually drive this change.
Credit: United Nations
Dan Thomas: Clarke, you’re probably the leading company in the world that finds and recruits the CEOs to lead these companies. What is it that they’re looking for in terms of leadership, and what kind of leadership do we need to drive this agenda?
Clarke Murphy: I think the most important part is that’s evolving, and it’s not certain around these goals, and the call to action says: What do you need? Can we identify what are the common traits of great leaders around sustainable performance? And can we build a framework that says: How do you choose them, and who can you take bets on sooner to have more impact faster?
So we have decided to work together—Russell Reynolds Associates and UN Global Compact—in going to the boards of companies that are the most successful in terms of their governance and putting sustainable operations and measurable success out in the public domain. How did they do that? Why did they do it? And what was their interaction with management to accelerate that change? Number one. So we’re speaking to board members all around the world together, members of Global Compact, clients of Russell Reynolds Associates, and then interviewing the chief executive officers to say: What did you look for? What surprises do you have? What competencies rise to the top? And then we can build a framework that says, let us help you pick more sustainable leaders sooner. And it may be dropping down a couple of levels to do that.
And, so, what’s coming out of it early on? Decisiveness, high levels of decisiveness. Number two, the listening skills to understand the world has changed, is changing, and the speed with which it’s changing is incredibly rapid. So can you accelerate the decisions you’re making in the operations you run to be a force for good around sustainable leadership?
Dan Thomas: Clarke, do you think we’re going to enter a new area of leadership as this Decade of Action continues? And what are the competencies of a CEO or a board-level appointee when it comes to this broad agenda?
Clarke Murphy: I think it is a new period of action, but I think there’s also going to be a generational transfer that reflects this whole stakeholder/shareholder change that we’re living through right now. A shareholder-oriented investor, board member or chief executive is not going to lead this. It’s [going to be] someone who’s been a stakeholder.
Seven or eight years ago, we led our industry in identifying what we call digital DNA. What does it take for an executive to go through a digital transformation? And, of course, they didn’t exist per se before. And so we looked at what are the competencies that made some leaders more successful in digital DNA than in just operating. This will be exactly the same in identifying the competencies of sustainable DNA that will make it happen faster.
And I think part of that is not only the intellectual horsepower to understand what’s happening, but the consensus building to create followership about let’s do this together as a company. Let’s do this together as a community. Let’s do this together as a board. So you have operating competencies, but also, can you create the passion for others to follow? The difference versus eight years ago with digital DNA is you now have employee bases saying: “Let’s go. We want to go now.” And some of the chief executives we’ve talked about, say: “Listen, it’s not about increasing my stock price, which will happen. It’s because I can’t retain the best people unless I take action.” And that’s the action orientation in the creation of followership that is so important from a competency standpoint.
Dan Thomas: And, Lise, this isn’t happening just at the CEO level, is it? I mean, young people also want to work for companies led by people with a sense of mission and purpose. What are we seeing across the 10,000 companies of the UN Global Compact in terms of the new generation of businesspeople coming into those companies and the need to retain and attract the best talent?
I think a very good example of what you are asking is the young SDG Entrepreneurs that we are mobilizing across the world with our local network these days. So I think we have around 80. They are each appointed by their company to solve a sustainable business challenge in the company and to show how true innovation can help solve important business issues in their company. So that’s going on across the world, together with the companies and our local networks. And when we celebrate our 20-year anniversary in June, we are going to bring in all these people—all these young people—plus our young SDG Pioneers, because we want to show that this is an agenda that belongs to the next generation. What we can do is to facilitate in the best possible way that young people, as quickly as possible, get the opportunity to lead and manage companies toward a deeper sustainability. Because, I have to be honest, I think many young people understand this agenda better than, for example, my generation. And I think we should begin to hand over the baton and empower young people to show us what sustainable business looks like in the future. So I look forward to having all the young people in the summit at the UN, in the General Assembly Hall, and see what they have come up with. And I’m sure they will surprise us in many different ways.
Dan Thomas: And, finally, Clarke, we’re seeing a bit of a generational shift in terms of mindset. But I guess there might be some resistance in some of the more established companies, [perhaps] from the older members of the board … who fear this transition. What can you do as an advisor to those boards and to those companies to encourage them to change their mindset, to think in a new way about leadership and to encourage you to go out and find the leaders that they need and the leaders that we need to lead us into a new, better world?
Clarke Murphy: I think it’s a couple of ways. One is articulating the case studies of the companies they identify with who are already there. So you look at Carlsberg Brewing, where you may not know it takes over three and a half liters of water to make a pint of beer. They have one brewery where they’re losing money that has already taken it to less than two liters that makes one. And they’re saying: “We will lead from the front.”
Visa, the payments company, says: “We’re carbon neutral in our data centers around the world. We will lead from the front.” So if we use the case studies to say, look what’s happening in some pharmaceutical companies—uses of water, brewing, payments, heavy technology users, heavy energy users—I think people get more relaxed. And the question is, many of these companies have led very successful operations. It’s time for them to lead in another way and they’ll relate to competition and leading and challenges as opposed to fear of the unknown. Because that’s what it is. How much will it cost us? What will you do?
A board member of Microsoft said to me the other day: “We’ve made this bet that we’re taxing some of the units within Microsoft that are overusing energy or carbon. We’ll have an internal tax which costs the shareholders some money and profits, but we’re willing to make that bet to be a leader.” That’s business at its best.
Dan Thomas: And, finally, Lise, the UN Global Compact partners with all kinds of companies. This is a great example of a partnership with a recruitment company, someone who’s putting into place the CEOs who are going to lead this transition. How does the UN Global Compact bring in partners, and why is that so important to the achievement of these 17 Sustainable Development Goals?
Lise Kingo: Goal number 17 is about partnerships. It’s impossible to make all these amazing goals without partnering up with organizations that have other competencies that can complement what any of us are doing. So I’m just so pleased today to be onstage with Clarke and Russell Reynolds Associates … and I think we will again at our 20-year anniversary in June come up with some of our first results and first ideas on how we see personal leadership for the SDGs.
Dan Thomas: Well, thank you very much, Clarke Murphy from Russell Reynolds and Lise Kingo from the UN Global Compact. Thank you.