Living in Africa, one is constantly aware of the vast poverty that plagues the continent. The poverty is in stark contrast to the continent’s natural wealth that led to Britain, Belgium, France, Germany, Italy, Portugal, and Spain, to colonize parts of Africa. How is it that a continent so rich can be so poor?
The answer is the poverty of African leadership. The impact of leadership, good or bad, is profound, both for nations and businesses.
Conscious capitalism cannot exist without conscious leadership. Business leadership has evolved as business and society evolved. In the past, the celebrated leader was the powerful commander reminiscent of history’s great military leaders. They commanded and controlled their vast army through a clearly defined hierarchy of authority.
In the latter part of the 20th century, we evolved to “mercenary leadership” caricatured by Al Dunlap, nicknamed “Chainsaw Al” and “Rambo in Pinstripes.” He earned hundreds of millions for himself temporarily raising the share prices of companies and permanently damaging them.
Towards the end of the 20th century and the beginning of the 21st century, a new style of leadership became more apparent and more common. Three trends seem to have converged to produce this more evolved leadership style.
The first and oldest trend is “Servant Leadership,” articulated by Greenleaf in his 1977 essay. The idea has its roots in Hermann Hesse’s “Journey to the East” where the servant Leo turns out to be the leader of the multinational secret Order. He is a leader because he humbly serves the people and the Order.
John Gerzema and his team at Young & Rubicam articulated the second trend which was evident from research they had conducted. They identified what they dubbed the “Athena doctrine,” why women, and men who think like women will lead the corporations of the future. This type of “feminine” leadership is not a “soft and squishy” type, but like the Greek goddess Athena, wise and strong.
In 2008, the Hedge Fund Research Organization reported that funds run by women had significantly outperformed those run by men for nine straight years. Credit Suisse did a study in 2012 that tracked the shares of large corporations with market capitalizations over $10b. Those whose boards included women outperformed the same size corporations with all male boards by 26%.
The third trend is that of Conscious Leadership, the style of leadership required of conscious capitalism. Clearly, a leader has to have sufficient analytical intelligence, but conscious leaders have, in addition, the feminine Athena and Servant Leadership characteristics, or what is called in the popular literature, “emotional intelligence.”
Conscious Capitalism requires from its leaders something more, what Danah Zohar termed “Spiritual Intelligence.” Spiritual Intelligence embraces all of the Athena and Servant Leadership ideas, but adds the dimensions of “holism” - seeing larger patterns, relationships, and connections, and “being vision- and value-led.”
Conscious Capitalism, as described in the first of this series of blogs, views the employees, leaders, customers, shareholders and all other stakeholders as part of an inextricably connected system. This “holistic” view is now being referred to as “systems intelligence,” the ability to see larger patterns, relationships, and connections.
“Being vision- and values-led,” the other characteristic of the Conscious Leader is becoming more mainstream. It is taught at prestige business schools now that the connection to profitability is widely accepted.
George Merck of Merck Pharmaceuticals, addressing the Medical College of Virginia in 1952 said: “We try never to forget that medicine is for the people. It is not for the profits. The profits follow, and if we have remembered that, they have never failed to appear. The better we have remembered it, the larger they have been.” At this time Merck was a maverick, who walked his talk. Merck donated the drugs that cure River Blindness to the sufferers who could not afford to buy them. Until Merck forgot this, they were a top-rated Fortune 500 company.
After Starbucks lost its way in the first decade of 2000, founder and ex-CEO, Howard Schultz, returned to revitalise the company’s commitment to its core purpose and sense of authenticity. This return to Starbuck’s vision increased sales from a negative 6% in 2009 to a positive 8% in 2011, tripled net profits, and increased the share price by $43 in three years.
Conscious Leaders are holistic thinkers, committed to a higher purpose for their organizations, with Athena-like wisdom and strength, and the humility of the Servant Leader. If you wish to see this in action, observe Phil Duff at work, as I have for over a decade. His leadership style permeates the culture in SYSPRO, one that views every customer as a ‘customer for life’, and is one of the reasons why SYSPRO enjoys one of the highest retention rates in the industry.