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HR teams critical in enabling business to lead change in the new global economy, finds new report from the Cambridge Institute for Sustainability Leadership

last modified Mar 05, 2018 10:16 AM
5 March 2018 – Businesses need to develop leadership to respond to the unprecedented changes brought by the Fourth Industrial Revolution, according to a new report from the University of Cambridge Institute of Sustainability Leadership (CISL). Highlighting the important role of HR and L&D teams, the report sets out a framework for leadership development that delivers value for business, society and the environment.

Businesses are failing to develop the leadership needed to respond to the unprecedented changes brought by the Fourth Industrial Revolution, a new report from the University of Cambridge Institute of Sustainability Leadership (CISL) has found.

Rewiring leadership: The future we want, the leadership we need

According to the report, Rewiring leadership: The future we want, the leadership we need, new technologies and innovations offer novel possibilities for addressing existential threats to business and society, such as climate change and wealth inequality. But until now, a framework to equip business leaders and cultivate the necessary leadership to leverage these opportunities has not existed.

With the slow pace and reactive nature of regulation, society cannot rely solely on governments to effectively navigate these challenges. There is a growing expectation for business to step up and take responsibility for delivering positive outcomes for society and the environment. The role of leadership development and HR teams will be crucial to meeting this through recruiting, training and incentivising individuals to succeed in this context, CISL said.

“Effective leaders for the future will be motivated by a purpose that aligns commercial success with delivering positive outcomes for society,” said Lindsay Hooper, CISL’s Executive Director for Education.

“Many businesses recognise this and understand the need to respond to and, where possible, shape the changing context in which they operate,” she continued. “Yet at the same time companies are not systematically equipping their people to do so. For businesses to be successful in reconciling sustainability with profitability, we will need to see a significant shift in the development of leadership capacity. That means new collaborations spanning HR, L&D, sustainability and executive teams, and with an investment in leadership capacity right up to Board level.”

The business case

The business case for investing in sustainability and aligning organisational purpose with positive outcomes for society and the environment is increasingly clear. Companies such as GE, Unilever, Nike, IKEA, Toyota and Natura are reaping the benefits of offering 'green' products and services, a market which has grown to more than US$100 billion. Unilever’s purpose-driven brands are growing at twice the rate of the rest of their portfolio and if GE’s Ecomagination growth strategy was a standalone business, it would be a Fortune 100 company.

Anglo American recently launched its purpose-led strategy, FutureSmart MiningTM, the company’s innovation approach to sustainable mining. FutureSmart looks at finding new ways to make mining safer, more efficient and more sustainable, with a smaller physical footprint. Head of Leadership Development, Desray Clark highlighted the benefits of this approach, “This is crucial for a 100-year-old company like Anglo American and others in this sector. If we want to succeed in the long term we need to innovate, stay ahead of the curve but we need to do this whilst improving the lives of our employees and society.”

The leadership gap

Research carried out by CISL with HR managers and Learning and Development experts as well as sustainability professionals from more than 20 multinational businesses around the world for a report, Building leaders for long-term business performance, highlights the current leadership gap. It addresses how multinational companies are defining and developing their leadership and talent pipelines in this context. Key findings included:

  • a lack of alignment and collaboration between the sustainability, HR and learning teams;
  • board members and management teams often being out of touch with the new context;
  • a struggle to reconcile short-term business needs with long-term planning and performance.

In Rewiring leadership: The future we want, the leadership we need, CISL proposes that responding to global challenges to achieve continued business success will require organisations to cultivate leadership at all levels, and to embrace diverse and complementary strengths and approaches.

Speaking about this approach, Desray Clark, Head of Leadership Development at Anglo American said, “We have learnt that this is the only way to ensure that we deliver against our purpose. In the past, like many organisations, we reserved leadership development for select senior leaders who would return from their training, ready to implement what they had learnt – but the system was not ready for them.” 

She continued, “Now we realise the importance of adopting an inclusive culture where leadership development is tailored for all employees. We realise that one size doesn’t fit all. If we want to deliver on our purpose, it is crucial that all of our 87,000 staff understand and value this purpose and most importantly are equipped to deliver the outcomes we need to thrive in the future.”

The Cambridge Impact Leadership Model

The Cambridge Impact Leadership Model, developed by CISL, has been designed to help businesses to develop a more ambitious purpose-led, courageous leadership to shape the future economy. It builds on CISL’s work with senior business executives over nearly three decades.

The Cambridge Impact Leadership Model describes the leadership we need to deliver value for business, society and the environment. It is leadership this is:

  • guided by purpose
  • is built on thinking, values and practice to deliver on this purpose
  • continually reflects and adapts and holds itself accountable to deliver the results required.

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