THE CALL FOR LEADERSHIP
This is an excerpt from For Love & Money
What are we to do when society’s traditional leaders don’t provide the leadership called for by the times?
We currently face a crisis in trust of all of our major institutions, from government to media; from the business world to non-profit organisations, not to mention our religious institutions.
With the climate crisis, we face the biggest test of humanity in our lifetime. Truth be told – in humanity’s existence. And we’re coming up woefully short.
Our political leaders to date have lacked the leadership and conviction that we so desperately need. The lack of consensus. The lack of will. The lack of a vision for a better future, to inspire people to follow them towards it and to help create it.
When you give yourself space to contemplate it… this “lack of” is breathtakingly depressing. Yet these are society’s so-called leaders.
So do we blame them or the system that creates them?
It has become patently clear that the real business that governments are in, is in getting re-elected. In order to achieve this goal, there are vested interests to serve. Politicians are expected to serve those interests loyally. When they go off script, there’s a price to be paid.
Time and again we have seen this play out. Australian politics since 2009 is a prime example. In the 10 years between 2010-2020, through only 3 elections, Australia had 5 Prime Ministers. Through the rise and fall of all of these political leaders, none managed to fulfil the role of true leadership for our nation and society. None have come close to showing up as a global leader.
This begs the question – what is leadership?
A brief review of the usual sources for definitions on leadership is pretty unsatisfying.
One I’ve come across that I believe communicates a leadership definition effectively and succinctly is from a 2013 Forbes article by Kevin Kruse.
He defines leadership as:
“… a process of social influence, which maximizes the efforts of others, towards the achievement of a goal.”
Isn’t that exactly what the world needs in the midst of this crisis?
By the way, isn’t that what a young Swedish girl, Greta Thunberg, has managed to do?
Business has the means. More than any other institution, business has the ability to innovate; to leverage and direct their resources to create change; to inspire others – their people and customers – to create solutions and new opportunities.
Business has the resources, the know-how and the reach to mobilise people to create the movements of change that society needs.
Let’s take a look now at some business leaders who have led and are leading from the front. These leaders have shown the kind of vision and courage that we’ve found lacking in our political leaders.
Paul Polman - Unilever
In January 2009, in the midst of the global financial crisis, Paul Polman took over as CEO of Unilever, one of the world’s largest consumer goods companies.
It was his first time in the role of CEO, having previously served as CFO at Nestle and in various roles at Procter & Gamble.
On his very first day in this new role, he took a remarkably bold step; telling Unilever’s shareholders that the company would now be taking a longer-term view and they would be abolishing quarterly annual reports as well as earnings guidance for the stock market.
He went further, telling shareholders who didn’t buy into the long-term value-creation model, that they should put their money somewhere else.
Pretty ballsy don’t you think?
In an interview, Polman quipped that he did it on the day he started because he didn’t think he could get fired on his first day!
The following year, under his leadership, Unilever launched a new strategy called the “Unilever Sustainable Living Plan”. Through this strategic plan, Unilever aimed to decouple their growth from environmental impact. It was an ambitious plan, with a goal to double revenue by 2020 while halving the company’s environmental impact.
Just imagine, back in 2010, how business and financial commentators would have responded to this plan.
Unilever, under Polman, was way ahead of the curve.
They recognised they would need to provide clear evidence that this strategy was driving success. So each year they measured the growth and contribution to profit of their Sustainable Living Brands portfolio against their other non-sustainable living brands.
In the last five years, Unilever’s Sustainable Living brands have consistently grown faster and contributed to more of the company’s profit than their other brands.
In their last report from 2019, the Sustainable Living Brand portfolio grew 69 per cent faster than the rest of the business in 2018 (compared to 46 per cent in 2017) and contributed to 75 per cent of the business’ growth (compared to 71 per cent in 2017).
Polman stepped down from Unilever in 2019. He was replaced by current CEO Alan Jope, who is committed to building on this strategic trajectory. The mantle of leadership was passed on. He said
”We believe the evidence is clear and compelling that brands with purpose grow. Purpose creates relevance for a brand, it drives talkability, builds penetration and reduces price elasticity. In fact, we believe this so strongly that we are prepared to commit that in the future, every Unilever brand will be a brand with purpose.”
Today Unilever is considered a leader and a respected example of a purpose-led organisation. Their purpose is to make sustainable living commonplace.
They have demonstrated what is possible when the strategy is clear, takes a long-term value creation perspective and your leaders have conviction and are able to influence others to contribute their best efforts to achieve their goals.
However, make no mistake, it took courage to take the path less travelled.
In Paul Polman, Unilever had a leader who was purpose-led and who was able to socialise that purpose through the organisation. He was able to face the critics and naysayers and show the results of his and the organisation’s commitment to their purpose to make sustainable living commonplace.
Tim Ryan – Senior Partner and Chairman, PwC, US
The role of Diversity and Inclusion in business has grown exponentially in recent years, as it should. The idea that workplaces should represent the people they serve is an obvious one. Increasingly, executives are understanding that a diverse workforce (age, gender, race, nationality, religion and sexual orientation) brings huge value to an organisation. Some of the benefits that come from broadening an organisation’s perspective due to a more diverse workforce, include better innovation, more empathetic customer service, better decision-making and higher revenue.
It seems wherever you look online these days there are articles about “Six Ways To Improve Diversity and Inclusion in the Workplace” or the like. We are also starting to see wider use of the term JEDI, which stands for Justice, Equity, Diversity and Inclusion.
While progress is happening, it still seems like a siloed effort, especially in the corporate world, where it’s largely an issue limited to the remit of the HR Department. In smaller and medium-sized organisations it appears to be even less of a priority, most likely due to lack of resources in this area.
So when I saw an article about what PwC US were doing to increase D&I in their organisation, it immediately caught my attention. Written by Tim Ryan, Senior Partner and Chairman, he highlighted his organisation’s efforts around what he described as a critical priority for their business: diversity, equity and inclusion (DEI).
He spoke about trust. He referenced the Edelman Trust Barometer data from January 2021, which positioned business in both the US and globally as the most trusted institution (being seen as both competent and ethical). And he highlighted the opportunity and responsibility that these trust dynamics created for business.
Transparency was what he zeroed in on. Specifically he highlighted his belief that there has never been a better time to be transparent about DEI data “as a way of holding ourselves accountable for the progress we seek to make, and that our people, investors, customers and other stakegholders expect from us”.
He then shared that PwC tried a version of this transparency. In August 2020 they publicly released their diversity data, including racial and gender representation, at all career stages, for all of their offices in the United States.
He admitted that while they were proud of some of the gains they’d made, they were also disappointed by some of the things their data told them – for example that representation of women and racially and ethnically diverse people at senior levels is not where they would like it to be. They also wondered how many people in communities that self-identify (e.g. LGBTQIA+ or people who experience disabilities) felt comfortable doing so.
What I took from this article was a strong sense of courage and leadership. By making themselves publicly accountable, PwC US are showing the way to create the kind of pace of change in DEI that the world needs. So long as organisations hold their data close, they do not subject themselves to the kind of public accountability that publishing their data creates.
Tim shared some of the consequences of sharing the data publicly.
Stakeholders care. PwC’s people appreciated it as did their clients and many other companies. They received hundreds of requests for advice from other organisations looking to do something similar.
They’re working harder, smarter and faster. Transparency makes tough challenges impossible to ignore. It has driven action in specific areas such as strengthening the organisation’s relationships with Historically Black Colleges and Universities, Hispanic Serving Institutions and community colleges. They are also focusing on fostering a culture of belonging, with an emphasis on allyship and critical dialogue.
They’re more outcome-oriented. Their awareness of the difference between activity and outcomes has been heightened.
Tim highlights the idea that public accountability of diversity efforts should be as transparent as those for any other business issue:
“In a sense, we’re simply providing the same kind of scorecard for our diversity efforts that we’ve long provided for our day-to-day operations. Said differently, DEI should be treated like any other business issue, and we are treating it as such. Most organizations that stay in business for meaningful periods of time do so because they are living, learning, evolving entities. We want that same spirit of adaptation to pervade our diversity efforts, at all levels, because everyone can see exactly how we are doing.”
Mike Cannon-Brookes – Atlassian
Mike Cannon-Brookes and Scott Farquhar are co-founders of Australian tech company Atlassian, who develop software products for business teams, like Jira and Trello.
The company has been a huge success story. At last count, they had nine offices in six countries, with over 4,000 employees and millions of users.
But its Mike’s strong voice and action on climate change that has brought him to the forefront of Australian media.
Do you remember the “billionaire tweet bet” story of 2017?
Let me take you back.
In 2016 South Australia had been hit by a catastrophic storm which knocked down more than 20 electricity pylons and three major transmission lines, leading to a state-wide blackout. The conservative Federal Australian government used the crisis to criticise the Labour-led State, suggesting that South Australia’s reliance on renewable energy was to blame. At the time it accounted for about 40 per cent of the state’s total electricity.
The crisis continued over the next few months. Then in March 2017 an article appeared in the Financial Review, quoting the head of Tesla’s battery division as betting the company could solve South Australia’s problem within 100 days.
Mike Cannon-Brookes responded with a couple of tweets. Firstly, sharing the article with an accompanying tweet “Holy s#%t”. Followed quickly by a tweet to Elon Musk asking how serious they were about this bet?
@mcannonbrookes "Lyndon & @elonmusk - how serious are you about this bet? If I can make the $ happen (& politics), can you guarantee the 100MW in 100 days?"
@elonmusk "Tesla will get the system installed and working in 100 days from contract signature or it's free. This serious enough for you?"
This twitter exchange triggered a huge response on social media. South Australia’s premier Jay Weatherill got involved. In just two months, Tesla installed the world’s biggest battery. Four years on, this battery has saved the state’s residents and businesses from wide-scale blackouts and more than A$116 million in energy costs. When the 2019/20 bushfires destroyed thousands of Australian homes leaving many without power, South Australia had so much power from the Tesla system that they were able to export excess electricitity to other parts of the country.
Since then, Mike Cannon-Brookes has been a fierce and vocal champion when it comes to the Climate debate. He has called out the Coalition Government many a time on its lack of substantial action.
After the bushfires, he and his wife Annie Cannon-Brookes committed AU$12 million to form and fund the Resilient Energy Collective, along with Tesla and solar energy deployment firm 5B. The goal, to provide power to communities affected by the bushfires and extreme weather.
He publicly endorsed the “Million Jobs Plan”, a five year plan launched by Think Tank, Beyond Zero Emissions in 2020, to create 1.8 million jobs by accelerating new energy projects and in the process, turn Australia into a renewable energy superpower.
He has publicly supported a Climate Action bill put forward in 2020 by one of Australia’s independent MPs, Zali Steggall. More recently, in partnership with Canada’s Brookfield Asset Management, Cannon-Brookes put in a joint bid to acquire AGL Energy, with a plan to then fast-track the closure of AGL’s two remaining coal fired generators. The bid was rejected by AGL.
Cannon-Brookes and his co-founder Scott have also set ambitious climate goals at Atlassian. They’ve already achieved their first goal five years ahead of schedule, which was to reach 100 per cent renewable power across all of their operations by 2025. Achieved in 2020.
In September 2019, at UN Climate week, Atlassian committed to a target of net-zero emissions by no later than 2050. They aligned their goals with a 1.5°C trajectory, which reflects the most ambitious objectives of the Paris Agreement, earning them praise from WWF.
These three stories show very different examples of leadership. Yet there are two characteristics that are common to all of them.
A desire to do make things better.
I believe we can use these examples of true leadership as inspiration for how we can each lead.
That just leaves two questions for us to answer…
How can we make things better?
Are we brave enough to do it properly?
BEFORE YOU GO...
On 17th April I will be co-hosting a webinar on Courageous Leadership with Risk Management Strategist, Lisa Sisson. We are inviting organisational leaders and influencers to answer the call to leadership and understand how they can start showing up as the courageous leaders that our workplaces, communities and societies need and deserve. We’d love you to join us.