The importance of authenticity and values in leadership

What makes a business responsible? A deceptively simple question which is often the source of complex debate, writes Stephen Howard.

To mark Responsible Business Week 2015, we asked this very question to over 2000 members of the public to try and get under the hood of what responsible business means today. Their verdict? Treating employees well is the most important sign of a good business. Interestingly this ranked higher than some of the more traditional outward facing activities - sending a powerful message that being a responsible business today requires much more than CSR reports and values statements.

 The notion that simple philanthropy, giving cash or ad hoc CR defines a business as responsible is simply outdated. There is far more to being a good business than these activities and the public and employees are savvy enough to recognise this. To be genuinely perceived as responsible a business must have values that influence everything it does - from how it treats employees and uses natural resources to how it operates within the community and down the supply chains.

Business leaders are at the heart of ensuring that values are embedded within the company culture and throughout the organisation - which is why I believe that authenticity is the most important trait that must underpin how they act and lead.
Authentic business leaders inspire trust because they understand the wider purpose of business – a purpose which is far beyond simply generating a profit. Authentic leaders are humble, they recognise their own limitations and understand that a responsible business cannot be created from the top down and instead must involve collaboration across and through the business to bring employees on board. Transparency - particularly in our 24/7, digital news era in which business failures and wrongdoing are rapidly shared and amplified – is also essential. Finally, I believe that the underpinning-defining characteristic of an authentic leader is one who creates value by living their values.

Of course fostering a values driven culture is not easy but there are some practical steps business leaders can take to demonstrate their authenticity.

1. Create a clear long and short term vision aligning your personal values to your business goals
The average length of service of a chief executive in the FTSE 350 is a little over 6 years - a relatively short time to make an impact and create transformational change within a business. As well as considering their immediate impact, CEO’s must set strategies that extend beyond their own short tenure which balance short-term business pressures with the long-term sustainability of the business and society. At the same time it is important that CEO’s develop a shared vision for the business, which aligns their personal values and business goals, and develop a business strategy, which lifts up the synergy between commercial activity and sustainability.

2.Demonstrate your values and reward the behaviours you want to see more of in your business.
Authenticity means leading by example. Chief executives everyday decisions and behaviours set the tone and spirit of an organisation. They are the ones that represent and embed a culture of honesty, and integrity and they have the power to embed values into business strategy. Without values truly being part of ‘business as usual’ for every employee it will in many cases continue to be perceived as the job of the CSR manager or team, instead of a shared responsibility across the business. To make values actionable business leaders must think about how they demonstrate, recognise and reward it. Key to this is ensuring that every employee, at every level, understands that responsible behaviour is genuinely expected and encouraged. For example, ensuring organisational values are built into team targets, personal KPIs, objectives and performance reviews for individual employees. Transparency is also key – however it is equally important that leaders react swiftly when behaviour occurs that falls short of organisational values.

3.Think beyond financial return – start identifying and communicating the long term value creation
Despite pockets of progress, financial value continues to be seen as the most recognised metric of business success amongst large sections of the investor community. Shifting this will take greater collaboration and transparency then ever from CEO’s and a genuine willingness to engage with investors to articulate how a responsible approach to business will build trust and create value. Stakeholders outside of the business including NGOs will be key partners to help business articulate the broader economic and social value that business creates.

4.Develop the next generation of responsible leaders
Enabling employees to have experiences outside of the business to help nurture their values and decision-making is a powerful and practical way for business leaders to develop this next generation and enable them to influence business strategy. Allowing days off for secondments, volunteering, mentoring and immersive learning are all examples of experiences that business leaders can offer their staff to help build advocacy for responsible behaviour and imbed a more responsible mindset. Leaders such as Duncan Tait, CEO of Fujitsu, Sir Andrew Witty, CEO of GSK, and Steve Holliday, CEO of National Grid are great examples of leaders who understand the value and power of sending staff out of the business. Business in the Community has sent over 9,000 senior business leaders out into the communities as well as a further 155 full time business secondees – through programmes that are reaping rewards for business and society.

5.Be an advocate
Authentic business leaders are willing to put their head above the parapet and share what they are doing how and why. I spend much of my time speaking frankly with CEOs of some of our largest brands and on the whole the leaders I meet share a common desire to do the right thing and make a difference. They are increasingly recognising that responsible practice adds value to their business – the challenge often is encouraging more of them to articulate this, which is why Business in the Community regularly convenes CEOs to enable shared learning and foster collaboration.

Business leaders that act on their commitment to creating a fairer society and a more sustainable future will foster the values and culture that will encourage innovation and regain trust. Furthermore, by demonstrating the wider value that responsible business creates for society business leaders will encourage many more businesses to join the growing responsible business movement.

Stephen Howard is ceo of Business in the Community, the Prince’s Responsible Business Network.