Increasingly businesses have to deal with changing stakeholder expectations and the pressing need for environmental and social responsibility. This article delves into the need for visionary leadership as companies adapt to new norms, address sustainability demands, and guide their organizations through transformative times.

THIS ARTICLE IS WRITTEN BY SUZANNE DE BOER ([email protected]) AND RUBEN HARDING ([email protected]). SUZANNE AND RUBEN FOCUS ON ESG AND BEHAVIROUAL CHANGE AND WORK WITHIN RSM NETHERLANDS BUSINESS CONSULTING SERVICES.

One of the driving forces behind the transition to a sustainable economy and its implications for companies lies in the changing norms and values within society. Those are often championed by Millennials and Gen Z, who comprise a substantial portion of companies future clientele and workforce. For a lot of companies, successfully navigating this transition mandates a comprehensive re-evaluation of the strategy, value chain, its activities and (future) investments. 

Visionary leadership as a cornerstone of successful transitions

Leadership is one of the key factors for successfully adapting to and taking charge of transitions. Leaders face multifaceted demands that require a spectrum of skills, encompassing a lot of operational leadership. Operational adaptations are essential to comply with new ESG-regulations and to integrate ESG considerations into risk management frameworks, policies and reporting mechanisms. Although this is essential, the necessary changes that the transition to a sustainable economy require are so big that this can’t be resolved by merely complying with regulations and operational excellence alone. Placing too much focus on the ESG compliance might even distract companies from one of the most pressing issues of this transition; the role and responsibility an organisation has for its conduct towards and impact on the environment, society and its employees.

This is where visionary leadership comes into play. It is crucial that leaders address the deeper questions that their company has to deal with. What is the organization's purpose? What is the real impact that it has on society and the environment and where can it drive meaningful change? And how can it change this impact for the better?

Answering these questions in a manner that is understandable to your stakeholders is a prerequisite to spark the energy which forms the basis for necessary changes for transitioning into a sustainable company. Human beings tend to be less inspired by legally based arguments (‘because we have to') and more by intrinsically motivated arguments (‘because we want to’). This requires visionary leadership, based on relevant traits including persistence, being courageous, fostering increasing collaboration, being emotionally intelligent, remaining optimistic, being open minded and being inspirational to those around you.

Six suggestions on how to approach visionary leadership

What can you do to adopt this visionary leadership style which can guide your organisation through the sustainable transition:

  1. Present a clear picture of the future: A clear, recognizable and inspirational view of the future and how the organisation positions itself in this future is necessary to energize employees and underline ‘the why’ of the intended changes. Consider whether this picture is  attainable and not too abstract.
  2. Make sure change seems attainable: Translate the vision for the future into concrete goals and break them down into smaller steps to create a starting point and the possibility to celebrate small successes quickly. Furthermore, make sure that employees understand which role they can play in contributing to this future.
  3. Be prepared to deal with emotions: Change is never easy; differences will exist in the way that the future goals are perceived by employees and how they react to those changes. Resistance and avoidance are behaviours that are sparked by the fear of the unknown, just like willingness to change and excitement and participation are behaviours for those who are comfortable and energized by change. 
  4. Be visible and inspire consistently: Inspiration and energy for intended changes might fade after a while, especially when people are caught up in their daily business. To combat this, it is important visibly and constantly inspire in different ways and through different channels.
  5. Acknowledge that change can’t occur without set-backs: Acknowledge that this journey is not easy and errors will be made. By being realistic and applying a balanced approach with room for success and challenges, it will be easier to start the change while knowing it does not have to be perfect at once. ESG is a developing field and things will be changing constantly. 
  6. Exemplify the change you want to see: This might seem obvious, but still; remember that leaders serve as role models. And certainly in times of change, employees look at leadership more than normally and also judge your behaviour more than you might expect. So, be aware of your own behaviour; it should go above and beyond from the behaviour that is expected of others. 

You are not alone; different leadership roles at different levels

The previous information might feel overwhelming and imply that this transition is dependent on ‘one true leader' who embodies all those skills. Seeing that the transition to a more sustainable economy will affect many parts of your organisation, it almost becomes impossible that leaders embody all the mentioned traits and can be solely responsible to drive the organisational changes necessary in the transition to a sustainable economy. Different layers and people will need to be included like middle-management, team-leaders and informal leaders each having a distinct role to play with different leadership styles. To operationalize this, we advise to:

  1. Identify leadership types: Assess your organization to determine the diverse leadership personas present.
  2. Evaluate skill sets: Judge whether these leaders possess the required skills to spearhead the transformation.
  3. Skill enhancement: Nurture leadership skills through training or consider enlisting aides to complement leaders' change-driving capabilities.

After doing so, acknowledge each other's strengths and role to play in collectively working towards a new and energizing future for your organisation.