New Year’s Resolutions for CEOs
Coming out of a year like no other, the world's business leaders must seize the moment to ensure the working world is changed for the better.
CEO Today hears from Vlatka Hlupic, Professor of Leadership and Organisational Transformation at Hult Ashridge Executive Education and CEO of The Management Shift Consulting Ltd.
2020 was a year when everything changed. A tiny virus globally changed the way we work and live. This has led to the threshold of a major shift in business management and momentous change in leadership that needs to happen now.
For decades, the dominant leadership approach has been based around the pursuit of short-term financial targets and cost control, with powerful chief executives deploying human resources as they seek to maximise returns. Concerns for welfare, or for society, were assumed to be an optional extra. You were supposed to choose between profits and conscience.
We now know that this approach is seriously flawed – and from a business perspective as well as from social and environmental considerations. What’s interesting is that, as a result of the global pandemic, business leaders are now forming part of a consensus challenging this paradigm; it’s not just a few gurus and academics, although it is based on research.
Responses to the pandemic by employers seem to be sharply polarised. Some are going to great lengths to make staff welfare a priority. Regrettably, others are managing only for the short-term – cutting jobs and costs, maximizing government support. Smart employers know that to look after staff in a crisis is to create a powerful asset for recovery. They understand the importance of emotional as well as economic recovery – and that the two are intimately linked. Team members who were supported by their leaders through a period of insecurity and fear will redouble their efforts once recovery begins. This is the essence of humane leadership.
Smart employers know that to look after staff in a crisis is to create a powerful asset for recovery.
This was confirmed by McKinsey’s survey of CEOs in 2020. The study found that if a critical mass of CEOs embraces and extends what they have learned during the pandemic, this CEO moment for humane leadership could become a CEO movement, a profoundly positive movement for the achievement of corporate, human, and societal potential. Similarly, a CEO survey conducted by KPMG established the increased importance of purpose for CEOs more than ever before.
There is urgency. The business world is crying out for courageous and compassionate leadership, to guide us out of the current state of fear. We need to create hope. For many, this challenge is intuitive and obvious – the challenge lies in understanding how our every behaviour affects this shift. Not all leaders possess the self-awareness necessary.
The behaviour of a leadership team has a ripple effect, felt first by the employee population and then more widely. This can be demonstrated both through employee engagement surveys and at the level of neuroscience. Our conduct and emotions are all infectious to the people around us. If we prioritise fair treatment, clear communication and employee welfare, we build a healthy culture that becomes a powerful commercial asset. If we prioritise cost-cutting, neglect of individuals and short-term targets, then commitment will dip, potentially imperilling any recovery. Fear can cause paralysis.
Now that the world has changed, leadership has become a new game; business as usual will not work anymore. We need humane, quantum leadership now, based on compassion, empathy, seeing the bigger picture, doing well and doing good at the same time.
The behaviour of a leadership team has a ripple effect, felt first by the employee population and then more widely.
Business leaders will not get another opportunity like the one we have right now to create a new world that is healthier, happier, prosperous, more diverse and more just. This pandemic presents a rare chance to write a new, more enlightened chapter for humanity.
Leaders need to harness human emotion, rather than block it; to inspire, rather than command. This is not a Utopian idea; it’s how the best performing companies already operate. It will explain the difference between those parts of your business that are really delivering, and those that are getting stuck. Once the energy of your people is unleashed, the customers get a great service and profits take care of themselves.
Every thought and action counts, which is why we need to choose our 2021 leadership resolutions astutely, letting go of the short-term, unambitious goals and focusing on higher purpose.
Most leaders do not realise how much impact they have. They create the biggest ripples within organisations. In 2021 leaders must remember how powerful they are, unleash that inner power, work on something much bigger than they are and spread ripples of humane leadership.
The five ambitious New Year’s resolutions leaders should make in 2021 are :
- Development of a truly caring organisational culture based on intrinsic motivation;
- Devotion to organic growth based on expertise;
- Cross-fertilisation of ideas between communities and teams;
- Embracing of experimentation and tolerance of mistakes;
- Distribution of leadership responsibility, decision-making and control.
In this new emerging business environment, priorities are turned upside down, and the importance of leadership behaviour and surveys on employees’ mindset and engagement is increased. As I mentioned, this is not Utopia. Difficult decisions will still have to be made; budgets cannot always be increased; some product lines will have to be closed and some positions made redundant. But what we have learned is that the organisations with high trust and performance make such changes more effectively than others; with fewer redundancies and less of a dip in performance. Cost control is still important, but it can become easier with high engagement. One of the business leaders who is overseeing a transformation from a bureaucratic to an entrepreneurial culture in a large European company said to me:
‘This is not a New Age kind of leadership … And I’m not doing this because it’s fun. I’m doing this because it’s important. I’m doing it because this is the only way to get results. This is about changing a culture.’
This historic shift in the business model is daunting, but it is also tremendously exciting. No longer do we have to sacrifice conscience in the pursuit of profit. You can do well and do good; you can even do well by doing good. Your people are not your resources, but your partners.
Let’s make it happen.