Updated: Jul 15, 2021
Author: Tiran Mohan
Sustainability is a long-term endeavour that demands long-term leadership, responsible decision-making, and a thorough understanding of sustainability ideas and commitments. Leaders that utilise sustainable leadership are more likely to make strategic decisions that include the economic, social, and environmental components of such decisions.
Corporate governance nurtures corporate sustainability as it aids companies in achieving their goals, can reduce risks and attract new investors and shareholders. As stated in Elkington’s “Triple Bottom Line” theory, profit, people and planet must work together to truly measure the financial, social and environmental performance of a company (Berry-Johnson, 2021). This analysis will explore the characteristics, benefits and evolution of sustainable leadership in organizations today. According to (Bergsteiner, 2011), “Sustainable leadership values people and considers the enterprise as a contributor to social well-being whilst incorporating characteristics of humanistic management. These activities constitute a self-reinforcing leadership structure that improves a company's performance and chances of survival.”
Many organizations today have recognized the importance that leadership plays as the drivers and motivators for adopting CSR practices to achieve sustainable development. Leadership is pivotal in creating a culture that promotes shared values, ethical behaviour and enhanced relationship with stakeholders. (Petrini, et al., 2021) Sustainable leadership values human development and the environment without ignoring the importance of the capital structure of the organization. These values strengthen the internal resources of the organization to resolve social and environmental challenges. Leaders have a strong duty towards the well-being of others in the organization, promoting the development of strength, resilience and vitality in people and highlighting interpersonal relationships grounded in ethical principles that are community and environment focused. (Iqbal, et al., 2020)
According to, (G.Tideman, et al., 2013) the economic theoretical paradigm is changing and it is not only important to know what is produced and consumed by organizations, but also understanding the way of thinking and level of awareness of social interactions.
Leadership Theory and Sustainable Leadership
There are many leadership theories that organizations base their leadership styles on, one of these is transformational leadership. Transformational leadership is frequently adopted in businesses today. Leaders and followers aid each other in achieving a stronger motivation to address unsatisfied social needs by revamping the status quo. They inspire followers with a mission and vision and encourage them to find new creative ways to change the environment to help people meet their needs. This form of leadership has a long-term perspective and a sense of continuity, as well as open-mindedness, moral courage, and a high level of self-awareness. This mind-set can be summed up in three Cs: context, consciousness, and continuity; (G.Tideman, et al., 2013)
Context covers interdependence within the organization, complexity, ambiguity, interconnection, resource constraints, regulators, and mega-trends. Consciousness addresses organizational mindsets, worldviews, beliefs, mental models, and attitudes. Continuity requires the establishment of a long-term horizon, courage, strength, unity of purpose, centering, and changing processes.
However, best practices utilised at High Sustainability Organizations (HSO’s) indicate that leadership needs a change in business thinking, mind-sets, awareness, and an evolved consciousness and skill set birthed from this consciousness (Moreno, et al., 2021).
Tomorrow's leaders must be able to incorporate changing business contexts, social, and environmental trends into strategic decision making, as well as the challenges and opportunities these trends present, the ability to balance short- and long-term considerations, and an understanding of the range of consequences that decisions can have. Only through the adoption of Sustainable Leadership can this be achieved. (Kanters, 2013)
Successful succession for sustainable leadership is achieved by grooming successors which promotes business continuity through new ways of thinking and doing. These new ways require development of three additional mind-sets and skill sets; connectedness, creativity and collectiveness. (G.Tideman, et al., 2013)
Leaders need to exemplify connectedness through instilling a sense of intrinsic drive in their followers by making them feel valued and bringing out the best in others through long and short term influencing, teamwork, trust, justice, altruism, relatedness, and addressing needs rather than wants. The spark of creativity should be ignited. Sustainable leaders should excel at taking chances, challenging followers' worldviews, and encouraging creativity through the stimulation of independent thought. Business models, new value measurement methods, flow and innovation for long-term shared value generation all fall under the banner of creativity. Being able to scale up for collective impact, incorporating sustainability in company structures, and sustainable consumption all fall under the umbrella of collectiveness.
As stated by (Hargraves & Fink, 2003) sustainable leadership, organizes and prepares for succession from the first day of a leader's appointment, therefore, Sustainable Leadership needs to be broader in scope and depth.
Further Characteristics Needed for Sustainable Leadership
(Roberts, 2012), suggests that transformational leaders should model the following competencies; holistic thinking looks at the “big picture” rather than being stuck in a siloed type of thinking, systems thinking allows leaders to recognise relationships between the parts of the organisation which fosters breakthrough innovation, humanistic thinking recognises the emotions of others and are able to connect on an emotional level when dealing with teams and groups of people, social optimism allows leaders to realistically envision big problems being solved and use this vision to overcome pessimism and authentic filtering enables leaders to quickly perceive the motives of others and react accordingly in difficult social situations.
However, sustainable leadership pushes the boundaries of these competencies and expands them further, specifically focusing on three areas. As investigated and discussed by (Burns, et al., 2015), a living process paradigm underpins leadership for sustainability: complex living processes reveal sustainable features and patterns, as well as crucial leadership methods. Leaders who want to be sustainable, must approach work from a holistic perspective, collaborating across boundaries. (Pearse & Dimovski, 2015) have explained that leadership that dries out its followers isn't going to stay long. Leaders develop sustainability in their organizations by how they approach, commit to, and protect deep learning; by how they sustain themselves and others around them to promote and support that learning; by how they are able and encouraged to sustain themselves, so that the organization can stick to its vision and avoid burnout; by how organizations ensure the improvements leaders bring don't diminish; how sustainable leaders evaluate the impact of their leadership on departments around them; how sustainable leaders foster and preserve ecological diversity inside their organizations rather than uniform prescription; and how sustainable leaders pursue activist interactions with their environs.
Leaders of the past thought in terms of pieces and boxes. (De Haan, et al., 2015) Systems Thinking for today's leaders must encompass seeing the big picture relationships between system elements and how these parts work together to create the emergent features of the whole. Cross-boundary collaboration for leaders today must enable thinking in a bigger, more expansive mind-set of "thrive and help thrive," which allows them to work across traditional corporate and social divides. Adaptability comes from the ability to create and adjust. Leaders in the past prioritized linear problem-solving and meticulous execution of specified plans; today's leaders must adopt a more creative mind-set, re-contextualizing old issues and allowing the inherent structural friction between their future vision and current reality to propel crucial objectives forward. (Roberts, 2012)
Benefits of sustainable leadership
In exploring the “why” of sustainable leadership, (Prakash-Mani, et al., 2002), highlighted the benefits of sustainable leadership. Sustainable leadership reduces costs by reducing environmental impacts and providing excellent service to employees. Businesses may cut costs by improving the environment, which has a direct influence on the financial bottom line. There is also evidence that treating people well can result in financial gains by increasing productivity i.e., creating more with fewer resources resulting in direct cost savings.
Revenue can be increased through existing items being made more appealing to concerned customers by innovating and inventing new products, perceiving "trash" as potentially saleable by-products, and improving procedures that generates revenue and benefits the environment.
Stakeholder engagement in businesses can reduce financial, reputational, and political risks. Recognizing the concerns and interests of employees, customers, NGOs, politicians, and business partners assists a corporation in better managing environmental and social standards, reducing the danger of civil action or death of a brand.
Improving your reputation by enhancing your environmental efficiency is important for organizations today; as new markets develop, organizations will certainly witness an increase in brand interest, which they should factor into their strategies even now. Environmental efficiency weighs heavy within society and even within companies as they move towards becoming more sustainable.
For crucial components of competitiveness including productivity, product quality, and innovation, a high-quality staff is essential. Therefore, sustainable leadership that exhibits human resource management can develop human capital.
Sustainable leaders can improve access to capital by reassuring excellent corporate governance standards that inform sustainability leadership such as, having the board is properly constituted, shareholder and stakeholder rights being honoured, and that the highest levels of transparency and disclosure are maintained.
Sustainable leadership provides more opportunities from engaging in community development and environmental products. Many firms, particularly those in the extractive industries, have established separate community development departments and/or foundations, allowing them to scale up strategic initiatives that maximize positive returns for both the community and the business.
Challenges faced on the journey to sustainable leadership
Leaders that use a sustainable and servant leadership approach are more likely to make strategic decisions including the associated economic, social, and environmental components, as voiced by diverse stakeholders (Hargraves & Fink, 2003). Sustainable leadership must also be a basic focus of the institutions in which leaders operate if change is to matter, spread, and last. Sustainable leadership leads to sustainability as environmental diversity and capacity expand however, there are challenges that leaders would face along the journey to achieve sustainability.
When an organization is mostly unprepared to deal with sustainability, making a clear and convincing argument for change is a major task. Because the organization is only reactive to the problems of sustainability (and sometimes oblivious of the opportunities), the sustainability leader must be skilled at collaborating and persuading people during the transition from unconscious to conscious behaviour. Once this is achieved, the next challenge faced is to turn high-level commitments into a comprehensive transformation program with well-defined actions and measurable commercial goals. To accomplish this, sustainability leaders must excel at delivering results and have a strong commercial awareness. Sustainability leaders must be able to identify and evaluate long-term sustainability trends, as well as spot new possibilities and implement strategies to reposition the organization to take advantage of them. The challenge is to integrate sustainability, like quality or financial management, in the DNA of the organization, so that it becomes a core value enabling the organization to be unconsciously proactive. (Kim & Phan, 2019)
As sustainable leaders, aspirations to make a difference, encourage others to follow in your footsteps, and leave a legacy should be tantamount. This legacy should encompass the shifting of the context of the organization, interdependency between stakeholders, longevity of an organization, meeting needs of all stakeholders, shared value creation and collective scalability of the organization. Organizational difficulties are complex and linked, necessitating everyone's cooperation to achieve a more sustainable future. I believe that long-term leaders should encourage people to collaborate and come up with their own solutions. They should assist people, embrace a connection with uncertainty, turmoil, and emergence, as well as bring people together and stimulate creative activity. It is known that even when values are shared; working together to address challenges can be a tough task. However, if sustainable leaders recognize that the stress, conflict, and uncertainty that arise from differences can be used to generate driven innovative solutions, this would benefit both the organization and society at large.
Tell us about your experience with sustainability leadership in your organization.