Article: Building sustainable business leaders to drive sustainable businesses

Leadership

Building sustainable business leaders to drive sustainable businesses

According to a United Nations Global Compact - Accenture survey, 92% of CEOs believe the integration of sustainability is critical to business success, while 48% are actually integrating sustainability in their operations.
Building sustainable business leaders to drive sustainable businesses

The cause of Sustainability has garnered significant traction with business leaders in India. Today it is considered central to business strategy, long-term competitive advantage, and value creation. Moreover, corporates today view sustainability as an ingrained part of day-to-day operations, rather than a cursory ‘statutory outlook. This requires a sustainability mindset i.e. a purpose-driven belief that business is not a commercial activity divorced from the wider societal and environmental context in which it operates. Such a mindset can be entrenched in the organization only by the right leaders. 

In a study conducted by Russell Reynolds Associates by assessing 99 Indian C-Suite executives, Indian leaders displayed relatively less innovation and inclusiveness as compared to their global counterparts and thus points us towards the need to identify and develop leaders with the right competencies.

Who is a sustainable leader? 

RRA and UNGC research determined that sustainable leaders are differentiated by four critical leadership attributes: Multilevel Systems Thinking, Stakeholder Inclusion, Disruptive Innovation and Long-Term Activation. These competencies or mindsets must be integrated into the entire talent management strategy, to truly imbibe sustainability as an organizational way of life. Often, while the intent may exist, the level of literacy around sustainability may not be enough to drive systemic changes across levels. The right leaders can guide the behavior of their people and drive sustainability top-down.

The HR Role in Upholding Sustainability

HR plays a crucial role in building the desired culture, values, and talent areas. Here’s how: 

  • Hiring: Hiring decisions for sustainable leaders must be done basis competency and mindset. Another parameter to look for while hiring talent is an openness to change or new ideas, the rationale being that such people, even if unconvinced or indifferent to the impact and need of sustainability, can be brought around to see its importance. Rajeev Sharma, CHRO, Royal Enfield, shares, “If you are in the early stage of your sustainability roadmap it is likely to find a person who hasn’t done much in the area. Hence, the way out is to look out for mindset and experience.” Assessment of behavioral values for executive hiring is a must. Sakshi Handa, HR Head, Unilever, Bangladesh shares, “We have two criteria- purpose and service which we assess while hiring fresh graduates. When you start probing into purpose and service, you do come across a set who either believes or doesn’t believe in sustainability. The best practice is to keep the philosophy of hiring on these two parameters consistent throughout the roles and levels when you hire”.
  • Values and Culture curation: Most of the sustainability initiatives are top-down. But we need more comprehensive development programs where each employee practices sustainability. Lakshmanan, CHRO,  L&T Technologies, shares, “The Nordic value system is ingrained in L&T and the first value of this Nordic Value system is Sustainability. Sustainability forms the ethos of the company value system. Leaders naturally lookout for opportunities to ensure the planet, society becomes better. To attract the masses, people development interventions need to be bottom-up i.e. we need to focus on how each and every employee wears sustainability on his sleeve”. Sustainability has to be woven into the organization’s fabric for it to reflect the inactions of every employee. For example, Sapna Purohit, SVP & Head HR, Sun Pharma says, “We imbibe a sense of larger purpose in every employee i.e. ‘assisting healing for patients and families. Such purpose-led employees are more likely to adopt sustainable practices than someone who is not aligned with the purpose”.
  • Learning and development: Values must be intricately interwoven with developmental programs. Rajesh Jain, CHRO, Welspun Enterprises, shares, “At Welspun, we promote  ‘Global Mindset’  as a value that helps us think globally on the matter of inclusion and sustainability. Welspun development programs are categorized into two phases–Aware and Implement, so as to make people aware of sustainability as a concept and how they can integrate into their work. Second, by practicing the first step, we empower people to come up with ideas and programs that can create a bigger impact on achieving sustainable goals.” Leadership development programs should have sustainability elements formally defined in them. For example, at Exide, each leader has defined sustainability goals based on the Exide Leadership Behaviour framework for long-term sustainable success. Another case in point is ITC Infotech- they incorporate “contextualization” in their coaching interventions and focus extensively on visibly rewarding and pointing out success stories. 
  • Total Rewards and Performance Management: The most prominent challenge in taking sustainability to the front line is a lack of connection between it and perceived performance. To tackle this, PepsiCo’s performance management system breaks employee KPIs into three buckets: Faster (addressing core short-term metrics), Stronger (addressing systemic transformation), and Better (Addressing long-term sustainability). At Dabur, a form of reward mechanism was conceptualized to engage employees in the company’s CSR activities aimed to reduce plastic usage. The sight of short-term incentives sometimes makes leaders take actions that hamper the cause of sustainability. Linking performance and rewards to sustainability can help adjust the vision towards the bigger picture.

By hiring and building a sustainable mindset, the fundamental fabric of doing business can be altered. Siemens, for instance, is taking a hard look at some of the businesses they are into and are in the process of exiting the Coals business. Tata Coffee continuously attempts to review the amount of water-usage for their coffee plantation operations. Such revolutionary changes are possible only when HR commits to make a conscious investment. For this, the HR skillset and mindset must change too. Pooja Bansal, Head HR, Piaggio Vehicles shares, “HR needs to have the right skills and strategy to evaluate people on mindset, values, and competency for sustainable leadership. HR must assess and arrive at the right framework for assessing leadership potential”.

Viju Raj Eranezhath, Consultant, Russell Reynolds Associates, shares a comprehensive framework to help HR leaders assess leaders on sustainability, “They must be assessed first using indicators expected of any top-tier leaders, followed by additional screens of sustainability, track record, competencies, and mindset”.

Leadership endorsement being the first step, sustainability measures need to be embedded into the value chain at multiple levels across the entire value chain. 

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Topics: Leadership

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