In the old days… (well… maybe not so long ago, or maybe not old at all and still very ‘now’?) leadership was all about maximising results, whatever it takes. As the economist Milton Friedman depressingly put it in the seventies: The business of business is business.
Meaning that shareholders were the most important stakeholders, and that their interest should always come first. If the CEO would spend resources on anything that did not enhance shareholder value, he was simply failing his duties and should be fired.
Nowadays more and more people question this idea. But unfortunately… many still believe that this is true. It is the kind of thinking that lets a corporation:
- fire 1,000s of employees to raise stock prices temporarily;
- engage in environmentally damaging production, modern slavery and abuse;
- introduce a culture of overwork that works employees to the bone while damaging their careers, their health and their private lives;
- confuse and cheat customers into buying as much as possible at the highest price possible, rather than helping customers buy what they need;
- exploit workers, always paying them as little as they can get away with to make more money for their investors;
- create toxic cultures where employees live in near-constant fear and frustration.
Everybody understands that this line of thinking has a negative bottom line, for people, the environment and for ourselves. The biggest problem with this kind of thinking is that it is contagious. As long as we, the public, the employees, the customers, do not explicitly condemn this kind of behaviour, it will continue to exist and even to spread further. Since if CEO’s behave as if the shareholder is the most important stakeholder, instead of clients and employees, this is the norm for behaviour. And behaviour is what is copied most. Unfortunately, we still see this behaviour very often. We see CEO’s do it, and employees follow it. And an even more scary thought: isn’t it true that what you see happening at work, is effecting your views on raising children? (or am I too negative now?!)
In any case, it’s clear, now with the pandemic even more than ever before, that we need a new type of executives -one that is motivated primarily by doing good. Or, in other words, by increasing happiness. And we do see a lot of these leaders too. They are not perfect people but they have a clear vision of what they want in the world and rather than just maximizing shareholder value, they want to create more happiness in 4 domains:
- For themselves
- For their employees
- For their customers
- For the world
These leaders create organizations that are a force for good in the world. They lead in a way that is sustainable – not just environmentally but also economically and psychologically.
Their employees’ lives are better and happier for working there. Customers’ lives are improved by the company’s services or products. And the world is in some way a better place because this company exists.
And don’t ignore the first one: These leaders are happy themselves, because they know that their leadership is making things better, not worse.
Do you see signs of this new type of leadership emerging? Have any good examples? Share them with us!