Leadership today requires both value and values
In leadership today, excellence demands value ... and values.
In recent weeks, a number of corporate leaders have expressed opposition to a new North Carolina law that removes vital protections for transgender people in the state.
Facebook CEO Mark Zuckerberg and Apple CEO Tim Cook wrote a public letter to the governor expressing opposition. PayPal cancelled a major investment. Deutsche Bank halted plans to bring 250 jobs to the state.
Aren’t major companies supposed to be hesitant to weigh in on controversial issues? What’s going on here?
What we’re seeing in North Carolina isn’t an isolated incident; it reflects a convergence of value - profit, pay, prices and returns - with values - positions that reflect the public’s desire for inclusive, respectful, and sustainable societies.
Several reasons account for this trend, chief among them politics, demographics, and technology.
First, politics. Government gridlock has fueled a thirst for new solutions. Polarization across and within parties has made it difficult for moderate voices to bridge the gap and get things done through traditional legislative action.
As government flails, companies are well-positioned to fill the void. In fact, Edelman’s 2016 Trust Barometer finds a 20-point gap in trust between corporations and government: 61 percent of the public trusts businesses to keep pace with societal change, while just 41 percent trust government. Moreover, 80 percent of respondents look to business to solve social and economic problems in the communities in which they operate, while only 59 percent expect government to do the same.
The second factor hinges on demographics.
The war among companies for top-notch talent has always been intense, but companies today must appeal to younger recruits who came of age in a networked world and see themselves as part of a global community, one in which all people deserve respect for their distinct views and ways of life.
Whereas yesterday’s talent wars focused primarily on pay and perks, a recent study by Deloitte reports that six in 10 millennials cite a “sense of social purpose” as a key reason they chose their current employer. Hiring the best employees today means offering more than a great paycheck; it means providing a sense of social purpose and a motivating mission, as well.
Third, technology is radically changing the climate of corporate communications, presenting both opportunity and risk for the C-suite.
On one hand, the rise of social media empowers CEOs with platforms that allow them to rapidly communicate ideas, achievements, goals, and values to a global audience. This can help businesses present a compelling vision and build and reinforce brand loyalty.
On the other hand, global connectivity places CEOs under a microscope that scrutinizes both business conduct and public aspects of their personal affairs. CEOs who fail to deliver on values can no longer hide behind boardroom walls; they are more accountable to the public than ever before. And when they slip, their failures can generate backlash that goes viral, rapidly shifting from a headache to a full-blown crisis that poses real risk to the bottom line.
The good news is that values-driven leadership can enhance corporate value as much as it detracts, particularly when it comes to millennial consumers, who already account for 21 percent of U.S. consumption and will soon purchase more than any other demographic.
According to the Barkley advertising agency, 63 percent of millennials will likely do business with a company they find socially responsible, while a remarkable 37 percent would pay more for a product that supports a cause they believe in.
Despite mounting evidence that values-based leadership can create financial value for businesses, most companies are still not built to answer society’s growing demand for corporate value.
Why is this?
Corporate decision-making remains segregated. For most companies, business decisions and corporate social responsibility continue to run on separate tracks. Rarely does an adviser skilled at navigating the risks and opportunities of social advocacy have the ear of the C-suite.
Forward-looking companies should align their corporate philanthropy efforts with their business goals - and empower the corporate philanthropy team to adopt a “war room” mentality that anticipates, identifies, and responds to key public issues like the North Carolina law.
Most CEOs also remain hesitant to step into the fray for fear of compromising their privacy and alienating customers. While these fears are understandable, the “duck and cover” approach will only get harder to justify. CEOs should look to get ahead of a trend that will only accelerate in the years ahead.
That doesn’t mean jumping in blind. Navigating the choppy waters of values-based leadership requires savvy and precision. Three tips can help leaders do this elegantly, in a way that limits risk and maximizes return.
First, look around corners. Peer into the future. Anticipate where an issue is going, not where it is today, and shape your positions, and the actions of your business, accordingly.
Second, choose carefully. You don’t need to engage on every issue. Find the debates you feel strongly about, where your business has something to say and something inspiring to show. When it comes to public interventions, quality beats quantity every time.
Third, be authentic. Few people become senior corporate executives. This brings grinding pressure - but also incredible opportunity to shape our common values. Hold true to your moral compass, and seize the privilege to move our society in a direction you deem just.
While recent events in North Carolina bring the evolving landscape of values-based leadership into stark relief, the Tar Heel State is only the tip of the iceberg.
At a time when the public is open to and eager for businesses to solve societal problems, CEOs have a unique opportunity to leverage personal values to improve financial value.
Fortunately for those in the C-suite, the same qualities that help them succeed in business - foresight, strategic discretion, and authenticity - can also help them thrive in their growing role as stewards of public affairs.
Alan H. Fleischmann is President & CEO of Laurel Strategies, Inc., a global business advisory and strategic communications firm for Leaders, CEOs, and their C-suite.
SOURCE: World Economic Forum