Monday, March 5, 2012

Leadership and Sustainability

 Image from MS Clip Art - Complexity
Cross functional complexity is the most significant barrier to integrated, 
company-wide approach to sustainability…...

In my last blog I concluded by asking where the responsibility for the Energy Gap should sit within an organisation. Recent CEO studies suggest that, to be effective, responsibility should sit in the Board Room, with outcomes reflected in compensation packages.  This is understandable when comprehensive sustainability programmes optimise resource consumption and environmental efficiencies, drive brand value, reduce risk and exploit growth through product and service innovations. 

For a growing number of companies Sustainability is serving as a key differentiator in the market, driving business performance, providing access to new markets and fuelling top-line growth.  In one Report over two-thirds of the business leaders interviewed were focused on Sustainability to create new revenue streams.  For the “innovators”, Sustainability has shifted from a cost and compliance requirement to a growth play.

As highlighted in the Accenture UN Global Compact Study, this new market is also driving new business models, changing industry cost structures and permeating business from corporate strategy to all elements of operations.

The Global Compact study highlighted a 40 point gap between those CEOs who believe Sustainability needs to be embedded in strategy (96%) and those who reported their companies were actually doing it.  This is in spite of the fact that 93% reported that Sustainability was critical to their business. 

Given the benefits cited above, why aren’t companies taking action? A CPSL paper; (“Sustainability Leadership - A Force for Change”, also referring to the UN Survey); highlights complexity of implementation across functions, as the most significant barrier to implementing an integrated, company-wide approach to sustainability.

As we move forward I believe leadership effectiveness will be assessed by the sustainability of its management and business practices.  (See Goran Svensson and Greg Wood “Sustainable components of leadership effectiveness....”)

What skills does a Sustainable Leader need?

The qualities and capabilities exhibited by leadership in for-profit green organisations are articulated in a number of dissertations available on the web.  Barrett Brown in “Conscious Leadership for Sustainability” reviews four studies where the recurring qualities and capabilities for a Sustainable Leader were:

        a deep sense of purpose
        the ability to:
o       work with a broad range of stakeholders,
o       facilitate/lead transformational change through a systemic view and
o       tolerate ambiguity (emotional competency)

Specific individual or organisational prescriptions are not provided.

Key to the success of future leaders will be the quality of Collaborative Leadership.  The joint capacity of leaders to become catalysts for collective action will count more and more says Petra Kuenkel.  Whilst individual insight is crucial, it does not automatically translate into more fruitful collective action. 

What will drive adoption of this style of leadership?

The demand for new business models, as a result of scarce resources, will make it an economic and strategic imperative for organisations to embed Sustainability into their business strategy.  Only those companies that are able to predict, adapt and evolve will survive and that places the onus on their leaders to exhibit the necessary qualities of collaborative leadership, systemic thinking and emotional competency.

Next time I’ll be exploring how some companies are already adapting and evolving to this new sustainable landscape.

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