In HBR's Imagining the Future of Leadership blog, Rebecca M. Henderson discusses leadership in the age of climate change.
Henderson points out that the CEOs of Unilever (Paul Polman) and Cisco (John Chambers), have both insisted that addressing climate change and reducing the carbon footprint of their respective organisations could also be opportunities to increase profits.
The author observes: "This is one face of effective leadership in the age of climate change: the recognition that the challenges that we face – not only with respect to GHG emission, but also with respect to growing water scarcity, and the accelerating depletion of the natural systems on which we all rely – are simultaneously opportunities to make a great deal of money."
She adds: "I suspect, however, that it is only one face. I think the other may be the explicit recognition that it is simply the right thing to do."
This all leads Henderson to wonder if leadership in the age of climate change will be all about the combination of a deeply felt sense of moral purpose with an equally serious regard to the financial aspect.
Effective leadership, says Henderson, is not a choice between hard-headed business approach and thoughtful morality; rather, it's an integration of the two.
She continues: "The ability to integrate the two motivates employees, reassures customers, gives meaning and purpose to work – and enables the firm to identify opportunities and to take risks that others might not see.
"The business of business might be business, but business is a deeply ambiguous undertaking; every day there are judgments to be made about how the world is likely to evolve and countless choices as to where to invest."
Henderson highlights a quote from Unilever CEO Polman where he says: "Even if a company's moral compass is not sensitive enough to trigger action, self-interest should... In my view, food and consumer goods companies like Unilever have a responsibility to act – not just for the common good but in the interests of shareholders."
Henderson concludes with the belief that Polman could be "seeing levels of commitment and enthusiasm that many firms would give their right arm to see – and that they will find opportunities that others will not as a result and execute against them much more effectively as a result."
Leadership in the Age of Climate Change
Rebecca M. Henderson, HBR.org, 05/05/10
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