If you read the leadership or business literature, you will see stakeholder leadership mentioned more and more often. You will also notice that corporate boards are experiencing investors pushing strongly for diversity on boards, attention to climate change, and in general pressure to adopt a more humanizing approach, commonly referred to as ESG. “Environmental, social and governance (ESG) issues are increasingly seen by shareholders as a window into the future. And a clear hierarchy is emerging. Leading companies view ESG issues as a business imperative.” In fact, from PWC’s survey of corporate directors 2020, 62% agree with prioritizing a broader group of stakeholders.
Research shows that companies led by diverse boards delivered a profit margin of over 20% during Covid. According to Pipeline Research, “In 2021, companies with greater numbers of women on their executive committees continue to have fared significantly better on their profit margins than those who have failed to embrace gender diversity at executive level.” There is a societal push for equity in general, and certainly in wages and services. Clearly, we are moving toward inclusion of stakeholders – employees, communities, the environment – as well as shareholders.
So, what now? Just how do we change the structure of our work? What do leaders need to do?
My recent experience tells me that most senior leaders in organizations of all types are being asked to do more, know more, and cover more assignments and staff, as well as more functions. They are working more hours, coaching more direct reports and expected to understand more roles and tasks. It begs the question: How can leaders function well in this new business environment?
Surviving will require being profoundly self-aware and able to recognize personal strengths, weaknesses and the triggers that activate old, ineffective behaviors.
Leaders will need to become more purpose-driven and less goal-driven. Purpose is more inclusive and tends to separate the wheat from the chaff, making it easier to prioritize. Obviously, this helps with time management, and it helps with decision-making and peace of mind too.
Leaders will need to work on keeping centered and grounded to be able to remain open and flexible to people, trends, uncertainty and change.
Leaders will need talented and exceptional teams and advisors to assist in leading others.
Leaders will need to be able to deeply listen and learn, experiment and recover.
None of the behaviors mentioned is impossible to learn. Like developing a good golf swing, perfecting a favorite recipe, or achieving a good time in a 10 K run, it requires focus, time and practice. Working with a coach is the quickest and surest way to get there.