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Will Hutton

Will Hutton

Principal, Hertford College, Oxford University and chair of the Big Innovation Centre

Thursday 21 Jun 2012
The Role of HR in Developing Leaders Fit for a Rapidly Changing World

The Role of HR in Developing Leaders Fit for a Rapidly Changing World

A new report Leadership in a Rapidly Changing World: How Business Leaders are Reframing Success outlines what we can learn from Chairs and CEOs from some of the world's most influential businesses about the shifting demands of business leadership, and these findings have acute implications for talent management and leadership development.

The UN study conducted for the Rio+20 Summit by Ashridge Business School and the International Business Leaders Forum (IBLF) reveals that many business leaders are now defining success in terms that have conventionally been the territory of political leaders and NGO activists.

Based on in-depth interviews with top executives, the report reveals that a growing number of business leaders are looking for ways to align their core business to serve not just their direct customers, but also the interests of wider society at the same time. This is in sharp contrast to a generation ago, when the prevailing attitude was that it was the role of political and civil society leaders to address the big societal issues of the day, not business leaders.

Sir Stuart Rose, former Executive Chairman and CEO of Marks & Spencer and one of the interviewees in the research, stated: "The 100 largest financial entities in the world used to be governments. Now over 50 of them are businesses, so suddenly the whole scale in the world has changed, and businesses have become much more important than they used to be."

This is changing the role of business leaders. Not only are business leaders needing to lead significant cultural change within their own businesses - they now increasingly work with others to play a leadership role beyond conventional business boundaries, and so are playing a much more explicit role in global politics. Far from being a distraction, they see this new role as central to how they create value.

As Sir Stuart Rose continued: "CEOs aren't just leaders within their business any more. They also play a role leading collaboratively with others in all kinds of places such as supply chains or government regulation. M&S has been doing this around sustainable fish sourcing, health and nutrition, waste and recycling and sustainable livelihoods in supply chains. Today's business leaders need to pay attention, because there is a group of leaders who are redefining the rules for everyone else."

The report notes that this new role calls for senior executives to develop skills in areas that have not been a conventional part of the business leader's repertoire. HR professionals and executive education providers must embrace this opportunity to accelerate this new kind of business leadership through talent management and management education.

First, senior executives need a nuanced understanding of the major societal forces shaping the world, and to know where and how to respond for the good of their organization and for society as a whole. This doesn't just mean having a thorough grasp of global issues like climate change, human rights and public health. It also means having the right tools to make sense of the world around them, the kinds of ways of interpreting the world that come from disciplines like sociology, anthropology or development studies.

Neville Isdell, former Chairman and Chief Executive of The Coca Cola Company and one of the research interviewees stated: "I had the benefit of coming from a social science and liberal arts background, so you understand geography, history, the whole contextual framework of the world. You certainly don't get that in an MBA programme."

Secondly, not only do senior executives need to be able to lead change within their organisations, they must now be able to engage meaningfully with multiple constituencies and relate well with all kinds of different groups in society. They must be able to engage in public and political debate with a point of view. Not only has it become far more important to know how to engage with policymakers, but now they increasingly see it as their role to proactively energize government policy, industry competitors, and wider society, and get people pulling together.

The role of business leaders has changed over the past 20 years, challenging the world's HR and L&D professionals to further accelerate the change that has already begun to occur. Training and development has a crucial role to play in this transformation, coaching and teaching today's and tomorrow's leaders, helping them make sense of a changing world and developing their capabilities to lead in ways that contribute to a globally inclusive marketplace.

A growing number of HR teams are already embracing this changing role of business leaders, embedding the kinds of first hand experiences, reflection and skills development that help build the right capacity for this kind of business leadership into the heart of their leadership development activities, but many others are only just beginning to think about it.

You might think, in the midst of current pressures, that all this sounds like a distraction. But as leaders at the top of a growing proportion of the world's most influential businesses reshape and redefine tomorrow's business landscape and what it means to succeed as a leader in it, the evidence suggests that in today's world, you cannot afford not to.

Leadership in a Rapidly Changing World is based on interviews with Sir Stuart Rose, former CEO and Executive Chairman of Marks&Spencer, Neville Isdell, former Chairman & CEO of The Coca Cola Company; Paul Walsh, CEO of Diageo; John Brock, Chairman & CEO of Coca Cola Enterprises; Lord Browne, former CEO of BP; Sir Mark Moody Stuart, former Chairman of Shell and Anglo American; Frederick Chavalit Tsao, Chairman of IMC Pan Asia Alliance Group; Carolyn McCall, CEO of easyJet: Richard Reed, Co-founder of Innocent Drinks, Mark Foster, former Group Chief Executive, Accenture, and others.

Matt Gitsham, Director, Ashridge Centre for Business and Sustainability and co-author of Leadership in a Rapidly Changing World: How Business Leaders are Reframing Success