The other day I had the pleasure of meeting up with an old friend from my days in life insurance - a couple decades ago.
Jon and I have had many discussions over the years - a lot to do with innovation, creativity, leadership and life in general, so I knew he would provide some interesting insights into what his thoughts were on Responsible and Effective Leadership as we continue to gather thoughts from executives in preparation for the international conference - Responsible Leadership 2010 in November this year.
Jon began by explaining that you need to first think of where the responsibility is owed. This is not in a legal sense, instead it is an ethical framework that is much broader than religion or the economy and stretches across all communities.
"It is a 'Values Thing'..."
Leadership values suggest that words must be supported by actions. What you say must be reflected in what you do and Leadership is important in developing a culture that follows that process.
Jon explained a lot of things that he has learnt through his times working with various companies. Like the importance of alignment and working as a team.
You also need to value customers and communities in which you operate.
Commitment to high performance is an integral part of responsible and effective leaders. Not only does that demonstarte success that others can follow, it also enables security of peoples jobs, the values these people work by and enables profits and taxes that can then be re-distributed back into the community.
The value of development is also very important. This is a discussion we have had many a time whereby development leads to progress. With progress comes innovation, getting better whilst improving capabilities and skills.
It is going to be rare to have someone love their job for life these days - but leaders should give staff employability for life - no matter where they may end up so they can continue to support their families and those they love and care about.
A business that doesn't follow these principles will often cease to exist - or be taken over - leading to loss of jobs, instead of growing and employing more people.
We decided to not follow the conversation of the role of state versus welfare given the limited time we had. So instead Jon unveiled what he believed are the steps to a successful and responsible leadership.
Jon believes that looking at CSR (Corporate Social Responsibility) or Corporate Citizenship is far too narrow a focus when it comes to responsible and effective leadership.
"The number one thing that companies can do is make a profit!" As they grow profit streams, more people can be employed, more taxes can be paid for re-distribution to the community, shareholders earn dividends which they can spend and or distribute back to the community in ways they choose.
In this way we do what we know best and make the biggest contributions to society. We know business much better that we know how to run a charity.
Secondly, Businesses are important to societies fabric. Work is important to life. In the right environment and with a good quality culture it is rewarding and fulfilling - as well as challenging so you don't become bored. These are the rewards of work and a responsible employer will do this whilst keeping you safe, both with OH&S, but also physically, mentally - with health and wellbeing.
Thirdly, businesses should be entrepreneurial. If there is no entrepreneurship, you need to get better to stay in business. If all businesses are going well - then there are more jobs for everyone and the businesses can CREATE VALUE... which is of benefit to
- Consumers / Customers
- Employees
- Shareholders
- Government and society (through taxes)
How much goes to government is a political decision and society selects the politicians.
The customer must receive good value for their money in order for the business to remain competitive and in business.
And employees must receive enough so they want to work.
Fourthly , Corporate Social Responsibility (CSR).
Here comes the discussion of who is responsible for giving back and Jon believes that in truth, governments should be less bureaucratic and waste less.
With less charities we would also likely have better economies of scale - though these are subjects of other discussions.
Should businesses step in and support charities? Of course, though by working within the areas they have impact on.
Firstly businesses should consider how they impact the environment and minimise waste. Not only is that better for the environment - it usually saves money in the long term - whilst adding to better business culture and relationships with customers, suppliers, shareholders and society.
Aligning with shareholders who own the business is usually a good place to start - find areas with mutuality of interest and then work with ways to support society in those areas.
One of the best ways businesses can do this is by sharing IP they have developed that has made them successful with charities and community organisations through in-kind support.
As more businesses make it their duty to share intellectual capital with charities and society, they can better stand on their two feet, instead of relying on welfare.
It is the old story. You can give a person a fish and feed them for a day or you can teach that person to fish and they can feed their family for life.
These should be the social ventures that help to get people out of welfare dependence.
If a business takes on a person in need with an internship - they can learn, generate an income and support those they care for.
Fifthly tied in with above is a focus on the environment.
Businesses must minimise environmental damage for our future generations. Often the true profit of business doesn't reflect true damage to the environment.
A tax could change behaviour. Perhaps what is needed is a combination of a carrot and stick approach.
At the stick end you have a tax that penalises businesses for damaging the environment. Though Jon is more in favour of a levy - so the money has to be spent on related purpose projects.
So, with climate, the levy could be spent on more renewable power options for example.
At the carrot end you have subsidies for good environmental behaviour. So for example - buying more green power. Increase demand for sustainable energy resources makes them more competitive over time.
The one concern with the areas of climate change etc is 'how is everything measured?' - the subject of another discussion.
Within these 5 areas described above, there needs to always be leadership that is measured by corporate governance. Business practices must comply with laws and follow a code of conduct that is reflected by responsibility. It needs to be part of the businesses culture.
And one final thing that can have a large impact - avoid conflicts of interest.
If you liked this article, you may also enjoy the articles shown here
No comments:
Post a Comment