BSR Report 2010: Redefining Leadership
Table of Contents
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The State of Sustainable Business
Audited Financial Statements
Past BSR Reports
Leadership in business looks very different in today's global, integrated, digital, and transparent world. Business aims to deliver more than just rising share prices and faces a more diverse array of questions than ever before.
Meeting these challenges requires finding the right balance of flexibility and commitment, listening and communicating, and a global view that respects diversity. What’s more, leadership today must be earned and renewed daily; it is no longer bestowed by self-perpetuating hierarchies.
At its best, business can lead the way toward prosperity for 9 billion people, create groundbreaking technologies for social benefit, and find ways to help us radically reduce our use of natural resources. Achieving this is no small feat.
In the world of sustainability, four dimensions of leadership are essential for everyone in business and provide the best path to a meaningful difference for all companies and the wider world.
1. Set Ambitious Targets
In 2010, several large companies exhibited leadership by raising the bar on their own sustainability performance. Companies including Panasonic, Walmart, Marks and Spencer, and Unilever distinguished themselves by adopting ambitious targets, creating a “sustainability north star” for their organizations, and inspiring other businesses to do the same. Even more striking, many CEOs have taken personal ownership of such goals, even as they acknowledged that meeting those targets is neither automatic nor easy. This trend represents a welcome change: For many years, business leaders were reluctant to commit to targets they couldn’t guarantee achieving. The fact that they now see more risk in not setting big goals than in missing big goals shows how much has changed.
2. Learn From the Margins
Traditionally, leaders were supposed to have all the answers. Today, it is more important to ask the right questions of the right people, no matter where they are found. The solutions to tomorrow’s challenges won’t come from centralized R&D laboratories, so leaders have to listen to weak signals and nontraditional voices.
Leaders increasingly live by the motto “there are a lot of smart people in the world, and most of them don’t work for me, ”and therefore aim to be masters at gathering ideas and solutions from all corners of the globe. This is especially crucial given that the biggest sustainability challenges—access to food, energy, and water, and the drive for community development and workers’ rights—are felt most acutely in rising economies. This trend is reinforced by the increased instinct for crowdsourcing, or “smart-sourcing” ideas from loose networks, using technology. Leaders also need to work with nontraditional partners, including customers, competitors, and employees, who are no longer passive parties to arm’s-length transactions, but actors shaping their own futures.
3. Invest in Infrastructure—of All Kinds
A sustainable economy depends on the right infrastructure—and by that we don’t mean just bridges and buildings. A sustainable future hinges on supporting social, financial, and policy infrastructures. This means that leaders can no longer be satisfied with merely making their own institutions the best they can be; they need to invest in the commons—shared resources that help their institutions, and others, reach their full potential. Leadership is no longer about separating yourself from others; it’s about bringing others along with you.
As a result, more leading businesses are working on systemic solutions to complex challenges. In the policy realm, it is heartening to see companies respond to inaction at the international level by calling for a price on carbon, which they recognize is the key to making the transition to low-carbon prosperity. Value chain solutions are—rightly—taking greater importance through efforts like the International Labour Organization and International Finance Corporation’s partnership on the Better Work program, which brings together governments, companies, and workers’ representatives to establish dignified work, and the Better Cotton Initiative, which takes on a single commodity. These examples go well beyond transactional partnerships that are a staple of the sustainable business world. They are investments in “whole systems” that enable sustainable business to thrive. Without this, companies committed to sustainability will continue to face headwinds.
4. Sail Fearlessly Toward the Future
We rely on leaders to anticipate the future. But today’s pace of change is much more intense than ever. The potential for truly disruptive change is great. The tenure of CEOs is shrinking. The survival of any one large company is not guaranteed, and the social license to operate can be erased overnight. Leaders have to encourage their organizations to understand the winds of change before they become a Category 5 hurricane. Doing this means questioning assumptions and, as we have said in past BSR Reports, paying more attention to long-term trends than short-term market gyrations.
The ultimate test of a leader today is how he or she enables others, because more people have the opportunity to make an impact than ever before and have the means to easily connect with like-minded people around the globe. In this world, leaders need to set big goals, listen to diverse voices, be architects of complex systems, and live both in the present and the future.
And let’s not forget: Everyone can be a leader, and we need all leaders to make the future a sustainable one.
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