ST 520 Responsible Management Session 9 CSR and Leadership

1. Don Minday ST 520 Responsible Management Session 9 CSR and Leadership 1

2. Why should anyone be led by you? 2

3. Agenda • Responsible leadership • Trends in leadership thought • Examples • Ray Anderson & Interface • CSR heroes • Break • Cultural debriefing • Course feedback • Exam information 3

4. Leadership is about who you are, not what you do. 4

5. Leadership can be developed 5

6. What is leadership? Your models?

7. Leadership • SKILLS • Technical • Interpersonal • Conceptual - strategy • Political - persuasion • Self-awareness • TRAITS • Values • Personality: self-confidence, locus of control • Motivation • Energy • Optimism • KNOWLEDGE • Company, product, industry, markets Experience Background Didactic Experiential 7

8. Prolific literature on leadership2,000 books / year in the U.S. alone

9. Historical approaches to leadership in organizations Responsible leadership Ethical " Servant" Authentic " Spiritual " Transactional leadership Transformational leadership

10. Transactional Leadership The ability to influence and direct a group towards the achievement of its goals Jack Welch Former CEO of GE 10

11. Transformational Leaders . • Charismatic - motivate through inspiration • Effective in turnaround situations • Generate exceptional performance • Get media attention 11

12. Pierre-Louis DreyfusFormer CEO of Adidas

13. Warren Bennis’ observed qualities of leaders Has a vision. Communicates the vision Perseveres in pursuit of the vision. Want to lead, have high level of energy Self-awareness: Maximizes his/her strengths Minimizes weakness, relies on team 13

14. Responsible leadership • A leader who gets "…superior sustainable results the right way" • "…how you deliver results has a profound impact on the long-term health of the enterprise." • "…fairness, honesty, a long and hard view." – - John Wells, president of IMD Business School, Lausanne 14

15. Responsible leadership(Pless and Mack, 2011) • Value-based and long-termleader-stakeholder relationships (not leader-subordinate relationships) • Responsible leaders build "sustainable relationships with stakeholders…to achieve mutually shared objectives based on a vision of business as a force for good" to achieve sustainable social change for the many [common good] "and not just a few (shareholders, managers). " • NOT an ego trip!

16. Ethical leadership(Pless and Mack, 2011) • Leader as a positive role model who acts according to value-based standards and uses principles of moral reasoning in decisions • Focuses on the micro-level, the individual characteristics of a leader, and not on the relationships and multi-level outcomes which characterize responsible leadership.

17. Moral managementWith respect to shareholders-customers-employees-community Immoral managers Amoral managers Moral managers

18. Moral management • Immoral managers • Active negation of what is moral • Exploit opportunities for themselves and their company • Example: Top management of Enron before company's collapse • Amoral managers • Insensitive to potential long-term consequences of their actions • Lack of ethical awareness • Believe business and morality don't mix • Ex: Leadership of Total after Erika oil spill • Moral managers • Ethics drive their behavior • Want to be profitable only if fairness & justice are respected • Obeying the law is the minimum, not the standard • Ex: CEO of Johnson & Johnson duringTylenol scandal 18

19. 3 leadership conceptsRelated to responsible leadership Authentic leadership Servant leadership Spiritual leadership

20. Servant leader Others-centered: Focused on followers' success, not ego building Participative Leads by example Humble Self-critical, admits mistakes Is a life-long learner Gives credit to the team Responsible leadership Goes beyond the team Serves the broader organizational purpose and focus, through stakeholder relationships, on the broader needs of society 20

21. Servant leadership Mike Tomlin Tony Dungy Mike Tomlin, cited in Rhoden, W., "Steeler's Coach Takes a Quiet Route to Brillance," NY Times 2 Feb. 2011 "He (Tony Dungy) tries to lead through service, and I do the same. I learned that from him in providing the men what they need to be great. Every day when I go to work, I don't think about things I have to do, I think about the things I can do to make my men successful. So I have a servant's mentality in terms of how I approach my job, and I get that from Coach Dungy." (Many leaders have a mentor) 21 21

22. Authentic leaders • Influence, energize, and develop followers through: • Self awareness: deep understanding of values, emotions, motives, goals, identity • Self-regulation: the ability to align values with intention and actions. "Walk the talk" • Positive psychological state • Comparison to responsible leadership: • Both authentic and responsible leadership emphasize organizational impacts. • Responsible leadership's emphasis on stakeholder relationships takes it beyond organizational boundaries.

23. Spiritual leadership • Leaders who bring meaning in the workplace • How? • Motivating vision • Meaningful job • Skill variety • Task identity • Task significance • Autonomy • Feedback • Recognition • Empowerment • Focus on employee well-being • Not the strong external / stakeholder relationship focus of responsible leadership.

24. Leadership gap in the financial sector • Focus on individual bonuses instead of overall good of the company. • Too much individual decision making  companies have asked business schools, to focus more on team leadership. • Weak management skills: give little feedback, expect long hours, destroy work-life balance • Lack of government oversight / regulation and cooperation with competitors. Jerome Kerviel, French trader who lost 2.4 bn. € for the SociétéGénérale Bank Source: "Eyes on the Wrong Prize: Leadership Lapses That Fueled Wall Street's Fall"

25. Developing responsible leaders • Can business schools contribute to the development of responsible leaders? • GRLI Globally Responsible Leadership Initiative: • a worldwide network of companies and learning institutions whose mission is to "develop a next generation of responsible leaders" • works closely with the EFMD (European Foundation of Management Development) and would like to "reframe the purpose of management education." • What do you think? Jerome Kerviel

26. Responsible leaders Jeff Swartz, CEO of Timberland (video) Joe Santana, head of operations at Mi Rancho tortillas, California 26

27. Local examplesGrass roots initiatives in Le Méné (22)

28. Local examplesVision: energy independence by 2030 Wind farm in Le Mené (22) A retired engineer, Marc Théry The mayor of St. Gouéno, Jacky Aignel "Don't wait for national politics to act" Révolution énergétique : les Bretons à la pointe

29. TerracycleTrenton, New Jersey Vision: Transform waste into useful products Videos Garbage  worm food and other products Entrepreneurial convictions and persistence. How it's done Tom Szaky, founder and CEO of Terracyle, "built on garbage, run by a kid, loved by investors" 29

30. Ray Anderson of Interface "Sustainability has been our salvation" "The worldwide leader in design, production and sales of environmentally-responsible modular carpet for the commercial, institutional, and residential markets, and a leading designer and manufacturer of commercial broadloom." www.interfaceglobal.com

31. It started with a book… "We've been screwing the planet for 20 years."

32. InterfaceRay Anderson's new responsible leadership • New vision: the end of "take-make-waste" • Used "Rational, emotional, and moral intelligence." See video on his business case for responsibility. • Managed change: • Selling the vision to stakeholders • Passing ownership of vision to stakeholders - small innovations, incremental changes "bottom-up" • Team building, training in process and product innovation • Competitors followed • "Seven fronts program": eliminate waste,…

33. InterfaceResults: sustainability is good business • Decreased manufacturing costs • Decreased inventory • Decreased volume of waste sent to landfills • Reduced water and energy consumption • Reduced greenhouse gas emissions • Reduced petroleum-based raw materials consumption So why don't more manufacturing companies "go green?"

34. Take awayThe responsible leader's "right way" Long-term stakeholder relationships for the common good Practices stewardship Develops resources – human, natural, financial capital – entrusted to him /her Serves the organization and team, not self Takes into account ethicsin decision making Demonstrates integrity and character Is an example and inspires through authenticity consistent in values and actions – walks the talk Seeks to bring meaning to the work. 34

35. "I'm not a leader" What are you doing to develop yourself? Do you want to be?

36. Your CSR heroes ?