Ethics is the currency of the new economy


Posted on: Monday 31, October 2016
Category: Leadership Development

A new ‘ethical economy’ is emerging demanding new levels of leadership. This article considers why this is important and how can leadership teams meet this need.

[2 1/2 minutes reading time]

The Dawn of a New Era

Many people around the world were stunned by the seemingly low levels of integrity from all sides in the recent 2016 US elections and UK referendums. Alternative facts and fake news hit today's headlines and challenge truth and honesty. But, despite what's happening in politics, many business leaders believe that a new ‘ethical economy' is about to emerge that will impact all of us in business. Also, our media streams make us aware of many issues facing the world today and that we need to adopt a sustainability mindset. We can't deny this or bury our heads. Furthermore, young people at the start of their careers today, have very different expectations of conduct and ethics. The Millennials age group is well-informed and want to work for a purpose. At the same time, they demand that business has a care of duty to wider society too.

CEO of World Foods Market and Author, John Mackey says there is a shift in peoples' minds as to how enterprises make money today. In this economy, it’s no longer good enough just to make money and hit your numbers for profit or shareholder value alone. Businesses will need to move away from self-interests and become forces for good instead.

If you're an entrepreneur or working as part of an SME, you might think that these sorts of macro changes only apply to large corporations? Think again!

I believe that tomorrow’s SME’s need to step up and be ready too. So if you as leaders don’t get in tune and on board with these changes, you might not make it in tomorrow’s world!

In this new sharing era, leaders will need the capacity to raise the bar far higher than yesterday’s companies. The ethical economy is about win-win outcomes geared for both high performance and a core purpose.

Here's a current example:

PepsiCo - Performance with Purpose

PepsiCo CEO Indra Nooyi, she is doing just that with her leadership team. PepsiCo has a huge challenge to reduce sugar levels in their products to acceptable standards. Indra acknowledges the step change needed to reinvent PepsiCo’s future that will make the world better. At the same time, they still must hit their performance KPI's.

She believes that all companies should operate with a ‘licence from society’ mindset. It demands leadership teams to do their very best work of their lives. Indra calls this: Performance with Purpose.

Check out her brilliant talk on this very topic. (Click video below or this link - video).

Indra challenges other companies to do the same too. She says that failure to adapt to this new ethical economy will mean public pressure and newly formed ethical companies will come after you. That might sound like a radical notion, but Indra makes a lot of sense with her views.

New leaders, please step up

The demand today is that leaders develop the strength of character and work together to solve wide-ranging and complex goals. These require decisions that affect many peoples’ lives, their families, and communities too. Because of this, skilled leadership will become more crucial than ever. Leadership must now count for something beyond short-term gain and the pay-cheque.

The impacts on leadership teams are huge. What's more, it requires executives to listen to the needs of their buyers first. That will affect R&D, sales, marketing, products, and services, right through the supply chain. Hopefully, informed consumers will put pressure on future government policy too (but don't hold your breath). 

To operate in the new ethical economy as a Performance with Purpose business will mean challenges. You as leaders need to be educated and informed so you can set big long-term goals and new KPI's around intentions that:

  • Make a difference in peoples’ lives and to public health.
  • Care for the wider communities and societies in the world as a whole.
  • Are committed to set long-term goals to support the environment.
  • Make your people, (and their families) happy and proud, so they bring their whole selves to work.
  • Lead the way to make the world better step by step. Contribute back to society as much as you take.
  • Is in step with ethical trends. Not just doing your own thing.
  • The people who can't change will need to go.

Leadership for tomorrow's economy starts today

First steps - transform into authentic leaders

So to step up and become a Performance with Purpose business (Re: PepsiCo) begins with a commitment.  You as a team need to develop yourselves as leaders emotionally

I believe that to become an authentic leader, you must build a critical foundation to operate successfully in an ethical economy. 

That foundation is about inner change. You need to gain essential skills, qualities, and capacities necessary to become a high-performance team. You have to learn how to nurture the deeper you. To do that you need to tune into your head, heart, and emotions around your purposes and intentions.

You will need some help along the way too. So invest in leadership team development to teach and coach you all as a team as individuals. To do your best work and succeed requires you to work on yourselves as leaders and managers first.

To draw together all the aspects of this Blog doesn't happen overnight. It takes time. So it’ll require a long-term plan too. PepsiCo’s health and water usage program will take ten years (however, they’re a huge multi-national corporation).

I hope you enjoyed this Blog. In the next Blog, I will explore authentic leadership more deeply.  And what it means and why it is important to let go of your vices to allow your virtues to shine through.

END

[871 words]

I run practical workshops and a 6-day (2 days per quarter) authentic leadership training programme alongside one-to-one coaching to teach leaders, managers, and teams these skills. 

For soft skills, development programmes, training, coaching, NLP for Business and team building days for leaders, managers, and teams, please contact me.

Post Note.

On the subject of PepsiCo and sugar reduction - public pressure and government lobbying on sugar and sodium reductions of global products, for instance, will force the food industry to take note. For example, I saw this news flash from Kelloggs today (14.11.16):

Being skeptical, I'm sure that sugar reduction needs to go much further, but it's a current example of using ethics to create (or force) change. About time too!

Unfortunately many corporations are still not listening. For example in 2010 Kraft took over Cadbury, the once highly ethical Quaker-based confectionery company. UK newspaper - The Independent, reported that Kraft broke many promises it made in pursuit of short term gain and profit. Kraft pledged to protect employee jobs which they didn't, they then backtracked on fair trade agreements and also reduced the quality of chocolate to consumers. Savvy customers may in the end switch brands - I certainly have. Read the full articles here:

I watched Cadbury's ethical decline from the inside

The final betrayal of the Cadbury brand

Book List

The New Leaders Paradigm, Richard Barrett, Lulu 2011

You Are More Than You Think - the return to your authentic self, Andrew Jenkins, SRA 2014

Conscious Capitalism, John Mackey, HBR Press 2013

 

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andrew@pdx-consulting.com


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