Responsible Leadership: Shifting the Dial From Profit to Purpose

The business of leading organisations is no longer simply about sustaining profitability in the here-and-now while embracing and implementing the innovations that will secure future growth. Today’s leaders must balance these, often conflicting, demands, at the same time fostering stakeholders’ trust through positive social and environmental actions.
Diane Nowell
Dec 03, 2021

It’s no easy feat, especially amid the existential challenges posed by social injustice, climate change and Covid-19. Charting a successful route through a constantly evolving landscape demands a new kind of leadership – one that goes beyond the pursuit of profit to crown purpose as its north star.

Responsible leaders see their organisations in a broader, pan-societal context, and view their power and status as a conduit through which they can help create a better world. They make sustainable business decisions that benefit all stakeholders – not just shareholders but employees, clients, and suppliers, as well as the communities they touch, the environments they impact and the future generations they influence.

Responsible policies in practice

These principles aside, there’s no single way to be a responsible leader; indeed, the biggest shifts in policy and practice are more likely to result from inspired experimentation than from following a well-trodden path.

At Headspring’s recent Learning Xchange event, Headspring’s Head of Learning Innovation, Liz-Ann Gayle chatted to the renowned speaker and futurist Graeme Codrington from TomorrowToday. Graeme helps organisations anticipate the forces that will shape their industries in the future, and to prepare for disruptive change today. He spoke of the imperative for leaders to disrupt the status quo – to find new ways of ‘showing up’ – as they pivot towards their purpose.

‘It’s not about finding more efficient ways of doing the things we’re already doing,’ says Graeme. ‘It’s about pausing first to work out what the good things are. There’s a moment in history here, waiting for us to step in.

‘We need to think longer term, engage stakeholders more creatively and aim for greater inclusivity by distributing authority and decision-making more widely, instead of clinging to the same old hierarchical structures that aren’t serving us so well.’

The shift towards longer-term thinking is a fundamental departure from the traditional shareholder-first focus on quarterly profits. The planning lens must be recalibrated to allow organisations to embrace the policy changes that will underpin tomorrow’s responsible leadership practices in our new stakeholder-primacy model. These practices will, in turn, enable organisations to thrive in a changed world.

Graeme: ‘Organisations can probably survive for the next few years by pushing productivity and profitability, but, ultimately, they won’t keep their staff and clients will choose other companies that are more responsible.’

Embracing purpose

There’s no shortage of evidence to show that organisations with a strong sense of purpose regularly outperform their peers. However, leaders must embed purpose at the heart of their strategy to ensure it’s expressed within a broader company culture of ‘doing the right thing’ if this purpose is to be embodied in lived values rather than residing in an ESG tick box on the annual report.

At the Headspring Learning Xchange event, Chief of the IE University Centre for Corporate Learning Innovation, Dr Nick van Dam, spoke with Tim Munden, Chief Learning Officer of Unilever as part of the keynote ‘Embracing Purpose’ speech.

Tim explained that Unilever’s purpose – ‘making sustainable living commonplace’ – acts as the company’s compass: ‘It’s integrated into our business and brand strategy and underpins how we care for our people and grow our leaders,’ says Tim. ‘We know that companies with purpose last, that brands with purpose grow and that people with purpose thrive.’

Cultivating a purposeful approach is not only helping companies to engage more authentically with their customers, though, it’s also creating a competitive advantage by strengthening the bond between employer and employee, reducing attrition and increasing retention rates.

Recent research from Global Tolerance shows that Millennials already rate ethics and values more highly than a generous salary, with over 60 percent keen to work for an organisation that makes a positive impact and more than half committed to working harder in return for making a bigger difference to others.

As the workforce changes to reflect increases in Gen Y and Gen Z employees, purpose is likely to become even more important in the war for talent. In recent WEF Young Global Leaders survey, 61 percent of emerging leaders believed that business models should only be pursued if they generated both ‘profitable growth and improved societal outcomes’, accepting that organisations’ obligations to its stakeholders was at least as important as its profitability. The report also highlighted the disconnect between traditional leadership models focused on growth and innovation and the values of stakeholders that often skewed towards stronger ethical considerations.

According to Tim Munden, Unilever is already gaining an advantage from a ‘Future Fit’ professional development programme that aims to help people find their purpose.

‘We’re encouraging people to be purposeful in their work and to put it at the heart of their development plan,’ says Tim. ‘Research with LSE showed that people who’d been through our training were 33 percent more satisfied with their work and 29 percent more satisfied with their life. Everyone deserves opportunities to find fulfilment in what they do.’

Going the extra mile

Companies with a genuine purpose do well by doing good, creating a strong value proposition for customers, suppliers and investors, and giving employees a way to integrate the same sense of purpose into their life and work.

If this purpose is embedded within an organisation’s core business functions, responsible leaders can unlock their organisation’s potential, devolving power to small teams, deploying talent based on ability, not hierarchy, and supporting personal and professional growth through training and development.

Responsible leaders recognise that small decisions enacted at the top can create tidal waves of impact further down the line, influencing people’s wellbeing for better or for worse. By focusing on others, they can make decisions that support the greater good.

In the words of Graeme Codrington: ‘This is the right thing to do, so why not be the leader who changes the course of their organisation and industry?’


Graeme Codrington & Liz-Ann’s Fireside Chat: Responsible Leadership


Unilever’s CLO Tim Munden on Embracing Purpose

Diane Nowell

Writer and communications consultant