The problem of leadership in CSR

20 April 2016

Paul Polman, Andrew Witty, Ian Cheshire and silhouette with question mark

Leadership is the defining factor for any movement for change.

Without it, you just get various tribes pursuing their own interests. And when one side wins over the other, then they celebrate and punish the losers. The losers regroup, fuelled by all the new grievances they’ve been given. And the game goes on.

Great leaders take their communities to places they didn’t know they wanted to go, but where they need to go. Think Gandhi. When his leadership held, he kept his followers non-violent in the face of enormous provocation. He treated the British as allies who hadn’t yet realised they had a common problem to solve that would be better for both of them. Think Mandela, who came out of prison and instigated a national process of truth and reconciliation.

There may be a new, dynamic group of change makers on the horizon, but I’m not sure I’ve spotted them coming.

Left to the habits of the tribe, the business community will keep going lobbying for its own interests, which it will define as its freedom to maximise profits. It’s a zero sum game that puts the business community in opposition to other parts of society and one only wins by making the other lose.

Leadership in business, in the era when we have no excuse for being ignorant of the common cause that binds us all together, means being prepared to change the rules of the game.

It’s not easy to do. Unlike Gandhi and Mandela, whose leadership was an enduring privilege of their unquestioned moral authority within their community, leaders in business are often only in that position on sufferance. And the people who can end the show are the ones who are most highly wedded to the status quo. The most tribal, and self-centred.

In spite of that, genuine leaders do rise up. Paul Polman at Unilever is the current one riding high. Why? Because he has taken a mainstream global products company and made sustainability a high priority. Because he has told shareholders that they won’t get quarterly reports, and if they’re not going to share the long-term vision for the company, they should perhaps own shares in another company.

It is genuine leadership, and that’s why it’s important. But it’s only possible because Unilever has been doing well. You can’t take that sort of position when the numbers are not being made. So, arguably, it’s riding the wave of the short-term, arguing for the primacy of the long-term, but probably only able to do so for as long as the short-term keeps delivering.

Other leaders have already faded. Ian Cheshire, who took Kingfisher plc strongly on the ‘net positive’ journey achieved huge respect for his business vision for sustainability. But Kingfisher was always a tricky company for the short term numbers. A spell of bad weather would mean the garden products wouldn’t sell. The UK might do well while the continental European businesses wouldn’t. There had been a succession of chief executives who came in, spun the plates and then were gently moved on. Cheshire was the latest.

In a recent podcast, I talked about Andrew Witty at GlaxoSmithKline. Witty tried to transform the business model for the pharmaceutical giant to one that better reconciled the interests of the global community with those of the industry. The shareholders weren’t impressed. They think the model of charging the highest prices you can to the small communities that can afford it is the best model. So he’s on his way.

So leadership in this area is difficult. That’s why generally, we get administrators. Leading their businesses according to the standard accepted rules. Looking to win in the marketplace by playing today’s game 2 percent better every year. Looking to be famous in CSR by doing something, maybe just one thing, very well. But never so well it can be said that it’s leading the business to take its eye off the ball or reducing short-term returns in any way.

Some of these are good people. Some of them get their businesses to create some real value for society. But they’re not the sort of leaders we need most to challenge current norms that are patently unsustainable. 2 percent better every year won’t do it.

You can’t ignore the fact that the most effective change advocates in business now are the ones who can’t easily be fired. Richard Branson. Bill Gates.

The question is where is the next generation of leaders? There may be a new, dynamic group of change makers on the horizon, but I’m not sure I’ve spotted them coming. That can be the case, of course. If you get promoted under the old rules, you have to show your commitment to the old rules until after you’ve been promoted.

The alternative explanation would be that they don’t exist. That would be a scary proposition.

Because we need that leadership right now. It can’t wait for long.