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The Changing Role of Global Leaders

Sir Stuart Rose, former CEO of Marks and Spencers, outlines the changing role of global leaders to tie in with the release of Leadership in a Rapidly Changing World: How Business Leaders are Reframing Success, a report produced by Ashridge Business School and the International Business Leaders Forum.

There is much talk of sustainability among the corporate community and companies are rapidly realising its importance. Top executives are increasingly aligning their core business to serve not just direct customers, but also the interests of wider society.

A generation ago, the prevailing attitude was that it was the role of political leaders to address the big societal issues of the day, and definitely not the role of business leaders. For them to take on such concerns would only be a distraction and source of cost.

Fast forward to today’s generation of business leaders and you hear a very different attitude being expressed: that it is essential for senior executives both to have a nuanced understanding of the major forces shaping our world, and to know where and how to respond for the good of their organisation and for society as a whole.

New research published by Ashridge Business School and the International Business Leaders’ Forum (IBLF) entitled ‘Leadership in a Rapidly Changing World: How Business Leaders are Reframing Success’ reveals that today’s global business leaders are adopting a different perspective on their role and purpose.

The research identifies a range of examples where addressing major societal challenges go hand-in-hand with successful business practice.

Growing numbers see the pursuit of business growth that is ‘smart’, ‘inclusive’ and ‘responsible’ as fundamental to creating long-term value.

In 2007, whilst Chief Executive of Marks and Spencer, I launched Plan A, a sustainability drive setting out 100 commitments to achieve in 5 years. Plan A is now extended to 180 commitments to achieve by 2015, with the ultimate goal of becoming the world’s most sustainable major retailer.

Through Plan A M&S is working with customers and suppliers to combat climate change, reduce waste, use sustainable raw materials, trade ethically, and to help customers to lead healthier lifestyles.

M&S has proved sustainable business can be profitable. In 2007 Plan A was a £200 million investment and I said it wouldn’t make any profit in the first five years. But in the 2010 annual report the auditors said £50 million of extra profit was attributable to doing the right thing. So there’s the proof, any chief executive that says ‘Oh, I’m sorry, I can’t afford to do it, I haven’t got the people, it’s all too expensive, the consumers don’t want it, they haven’t asked me for it, it’s the wrong thing to do and it’s going to cost me money’ is wrong, wrong, wrong, wrong and wrong.

The other theme to emerge from the research report is that acting on this new perspective requires a specific set of competencies, many of which are not featured in traditional management education and leadership development courses or experiences.

Those interviewed for the research spoke about the soft skills that come to the fore at this level of change leadership: having the courage to raise difficult issues in the face of vested interests, enabling leadership to emerge through dialogue and encouraging innovation and framing challenges that inspire it.

Business schools also need to play their part. Executive education providers need to train leaders to be proper leaders. Top executives typically get an MBA. But who teaches them about how to behave? Leadership is not just about producing the right numbers. Leadership is about setting the right tone in the organisation. It’s about ethos, it’s about what you stand for, it’s about trust.

No longer is business leaders’ engagement with social issues largely ‘defensive’ and relegated to an annual philanthropic gesture, or a token recycling programme. In short, sustainability is not merely a fad but, rather, a business imperative.

Consumers and retailers want this type of initiative, and the planet needs it. It is increasingly important for business leaders to do business in the right way.

Sustainable business is here to stay. As a business leader, the future of the world has become your business. Businesses are changing and tomorrow’s winners will be those that meet fundamental demands of clients and society at large.

This was posted in Bdaily's Members' News section by Tom Keighley .