Research Note and Crisis: “Responsible Business and Leadership and the path towards Purpose”.
April 26th 2020
“How do you want your leadership from this time to be remembered?” – this could be the inspiring question most leaders will need to address as they find their way through the current crisis. Last week the Center for Responsible Business and Leadership issued its first Research Note with the title “Responsible Business and Leadership and the path towards Purpose”. Based on a systematic review of the main Responsible Business practices, it aims to shed light on the importance of businesses to act as Responsible Businesses and to understand what sort of Leadership should be expected from corporate leaders. If its relevance have always been undisputable, now, more than ever, the concepts need to be fully incorporated in every leader’s agenda. The Research Note is divided in four parts:
History of the concept and a proposed definition of Responsible Business;
The kind of responsible leadership that businesses seem to be in need of;
Recent Leadership examples from the Coronavirus crisis;
The business case for action.
In that context we ask ourselves - is there anything special about Responsible Business Leadership or the traits, styles and skills of Leadership are all the same? We suggest the answer relies on the complexity of the different angles (economic, environment, social) that calls for a coordinated and, holistic approach. And above all, an approach that needs to be guided by a common Purpose - even more important in crisis like this, where the trade-off between short term performance vs long term values and commitments, yet again, will be in every Board agenda. The concept of “purposeful leadership” is the one who puts people, customers and other relevant stakeholders first, all embracing a shared purpose treating profit as an outcome rather than the goal. Purpose driven leadership, the ability to align stakeholders around a common aspiration that goes beyond the direct interest of stakeholders, seems to be a key leadership characteristic, even more important in moments of crisis. Companies who have Purpose clearly defined and understood by its stakeholders, will certainly have an easier time now – from communication to financial performance, from staff motivation to loyalty throughout the supply chain. As Hubert Joly (Executive Chairman Best Buy) puts it “this belief is particularly relevant in times of crisis like the one we are going through now. This is a time when performance is not defined by a company’s share price. This is a time when performance will be judged by how a company and its leadership serve everyone and fulfil a higher purpose —and specifically how they have shown up and met the requirements and expectations of its multiple stakeholders”. And he sums it up with a question: “How do you want your leadership from this time to be remembered?” Have a great and impactful week! Nuno Moreira da Cruz Executive Director Center for Responsible Business & Leadership Católica Lisbon School of Business and Economics