The events in the US banking sector last week have me reflecting (again!) on corporate leadership. No matter who bears the brunt of SVB’s failure, capital has evaporated both through its failure and the resulting market volatility. That capital was not notional and could have been put to greater use in a world filled with climate problems and mass inequality. Leadership matters for many reasons but not least because we entrust leaders with the oversight of corporate finances and that impacts us all.
The biggest frustration I have when it comes to leadership is we can’t seem to join the dots around cause and effect. On one hand, people such as myself are invited to speak to leadership teams on topics such as purpose and purposeful leadership. On the other hand, companies continue to promote leaders who make decisions which compromise people/planet or take unnecessary risk to promote short term returns. We don’t seem to be able to reconcile the decision-making process around who runs our corporations and what we expect broad societal outcomes to be as a result.
Don’t get me wrong, money matters. Purpose-led organisations cannot exist without profit, but it is a delicate balancing act between the two and a skill which is underdeveloped in many leaders which we need to grow. There may be a lot of talk about purpose in the marketplace but the reality is many CEOs still struggle to understand and manage the conflict it creates. If the leaders of today still struggle, how do we plan to develop the leaders of the future?
I had been reflecting on this idea anyway because there has been a lot of press coverage lately on MBA programs including which university ranks higher etc. To which, I find myself thinking does that still matter? When I look at many of these programs, I don’t see a curriculum which has changed a lot in the last decade (I looked up 6 but if you know 1 which warrants a mention– feel free to comment below). And yet, our world has changed dramatically in the last decade. I highlight MBAs not to be overly critical of them in particular, but to pose the question about how we plan to source leaders for the future? In what new ways can we grow a pipeline of leaders who have the courage to be different?
Questions we should want to know answers to from aspiring CEOs and CFOs include:
· Who are you? What matters to you? How does that inform your decision-making?
· When you are at the helm of this purpose-driven organisation, what will your commercial strategy look like when key stakeholders include society and our planet?
When it comes to leadership, we need to be more radical in our thinking. Getting it right might save us billions in lost capital, future spending on leadership development programs and attempts to undo the devastation of climate change and inequality.