LinkedIn: What if ‘new leader – new approach’ means no more net zero?
Amelia Watts. Communications Manager, A Blueprint for Better Business
They say a new broom sweeps clean, but we often forget the second part of the old saying is that an old broom knows the corners.
As the Conservative party leadership campaign progresses, it is striking that the commentary is not about what new policies the future British PM will bring in, but rather what might be swept out as they aim to make their mark and differentiate themselves. Earlier this month, business leaders called on all candidates to retain the commitments to net-zero and a sustainable economy, highlighting that changing leadership sometimes means policy – or in the business world strategy, products and services – that might be supported and deeply needed by wider society are swept off the table or abandoned.
When leaders in organisations change, the incomer often wants to make their mark and sometimes that looks like a dramatic shift away from the previous leader’s approach. This is a recognisable pattern, it is a style of leadership that has been rewarded, even lauded and it is deeply ingrained in current business school and leadership development training. But this kind of short-termism in leadership runs the risk of undermining efforts to solve systemic challenges – delivering good environmental policy in the case of government – or in the case of businesses building purpose-led companies.
The challenge here is that when purpose is overly associated with the CEO’s mission rather than an organisational mission, then the business might renege on its commitment to be purpose-led in the event of a leadership change.
As organisations become purpose-led we work with them on how they can make this a sustainable, long-term approach that is resilient to short-term change – such as a new CEO, economic or geopolitical crisis – but not resistant and still open to critique and adaptation. Achieving this is founded on building in checks and balances, which leadership skills we value, and the importance of creating shared understanding and collective commitment.
So how do organisations strike a balance – holding onto long-term goals but also being flexible enough to welcome change, challenge and adaptation?
1. Looking at how we understand the role of a leader
YouTube: What it means to be a purpose-led leader – in this video clip Alison Rose, CEO at NatWest Group shares what it means to be a leader, being comfortable with ambiguity, committing to long-term decisions and understanding you are a temporary custodian.
The current leaders in business ( and politics) have built their careers and reached their positions by succeeding in the current system – in our work, we don’t dance around this point – purpose-led leadership and change requires leaders to challenge their assumptions, beliefs and measures of success they have based their careers on. It is about being open to external and internal challenges, collaborating to become clear of why your business exists and for whom (purpose), creating the conditions within the organisation so people can thrive and building a business that can learn and adapt as needed.
Why would a leader take this on – because they, as many do across business and society – recognise that the current system is not working for everyone and we need to adapt to solve the problems of people and planet.
This is not a new idea – it has always been the view of some leaders that they are the custodian of the organisations they run – companies that that existed before and should continue to exist after their tenure. This caretaker approach is antithetical to a new broom mentality – it is not about making your mark at any cost – but rather about making the best decisions that support building a better business and better society.
– In this blog Navigating Purpose – provocations for CEOs we discuss what it takes for leaders to meet the challenge of the decade ahead
– In this article Rethinking leadership and organisational culture, Simon Western challenges the heroic model of a CEO transforming organisational cultures
– There is also a public discussion going on about the leadership skills we value and the need to shift business education and leadership development:
- FT Special report: Business schools switch focus to people, purpose and planet
- HBR: As the World Shifts, So Should Leaders
- Margaret Heffernan, FT: Chief executives have a climate crisis blind spot
2. Creating shared understanding and collective buy-in
Becoming purpose-led cannot be forced on people or an organisation. People will be convinced for their own reasons that becoming purpose-led can create a better business that is also better for society and better for people, not someone else’s. Hence allowing time and space for people to share different perspectives, speak openly, and raise questions and dilemmas is crucial. This is especially important for leadership teams.
While it can be transformative to have a visionary CEO or another member of the leadership team who is passionate about being purpose-led, change does not happen in a linear, top-down fashion – it is more an evolution. Relationships with and connections between people are as important as adapting formal hierarchal organisational structures in helping to drive change.
Purpose comes to life in organisations when it is founded on shared understanding and it needs to be actively ingrained in the business strategy and thus every activity and impact the business has. A purpose-led organisation also recognises that everyone has the desire to contribute ideas to strategy development and are collaborators in fulfilling its purpose.
Here are some resources for creating shared understanding within organisations – as well as how to specifically engage a board:
– How do you build a shared understanding within an organisation? Shared Understanding | A Blueprint for Better Business Knowledgebase
– Our Purpose for PLCs: Time for Boards to Focus report explores the role of the board in a purpose-led business
– This section of our Knowledgebase shares the importance of a shared understanding in the leadership team and discusses how to go about this – Engaging the leadership – exploring questions and dilemmas | A Blueprint for Better Business Knowledgebase
– In this report, we discuss how investors can engage with and support purpose-led companies
3. What role do structures, procedures and measures play in securing long-term alignment to purpose?
If purpose is considered the pet project of the CEO then it will not be resilient to leadership change. That is why purpose must be ingrained in everyday decision-making. In many ways, the cultural/organisational norms – the DNA of an organisation – are held in its structures, procedures, measures and metrics an organisation. This is how an organisation – like the old broom – retains its understanding of its corners.
Genuine purpose-led change takes time, every nook and cranny of an organisation needs to be reviewed to support new behaviours companies are seeking to cultivate. It involves developing new skills, unlearning and relearning, experimenting and innovating.
Blueprint discusses how a purpose-led business might approach a deep-rooted examination of its systems, measures and metrics in more detail in our Knowledgebase:
- Exploring embedding purpose in an organisation – Exploring embedding purpose in an organisation | A Blueprint for Better Business Knowledgebase (blueprintforbusiness.org)
- How are employees hired, rewarded and treated – How employees are recruited, trained, and treated | A Blueprint for Better Business Knowledgebase
- How to think about what it means to ingrain purpose in measures and metrics – What is the purpose of assessment, measures and metrics? | A Blueprint for Better Business Knowledgebase
– It is vital – and difficult – to include the non-financial impacts a decision will have – both social and environmental – we explore this further in this blog – The limits of putting numbers to things we care about
Making purpose a sustainable, long-term approach that is resilient to short-term change – such as a new CEO – relies on the work the company does to create a shared understanding of what the purpose means for the business and how it then goes on to create the conditions for the purpose to come to life
Below are some questions to help you explore where your organisation might be in terms of building a resilient purpose and identify what your next steps might be:
- Who is championing the work to become purpose-led?
- How engaged are the CEO and leadership team in this work?
- What is the motivation and what are the beliefs and assumptions that underpin the desire to work on this?
- Has the leadership team created the space for debate on what it means for the business to be purpose-led?
- Have people from different levels and from different areas and functions in the business been involved in the discussions?
- Is there a shared understanding of what purpose-led means across the Executive Committee and Board? Does the Board view its role as the collective trustees of the corporate purpose?