Meaningful business transformation is impossible without non-incremental leadership
17 Oct 2023
Blog
In an era where the boundaries between work and home have become almost indistinguishable, the inability of today’s leaders to connect their observations of the world and utilize them in a business context has never been more evident. The implications? Organizations falter in addressing the pressing demands of our society, appearing outdated and ill-prepared for the future of work.
The crux of the issue is complex: businesses operate within many value systems, and unanimity within these systems is rarely achieved. Embracing a particular societal issue or viewpoint carries inherent risks. Leaders today face the temptation of virtue signaling, making superficial gestures without initiating substantial and meaningful change.
Consider nearly every modern company has launched an environmental policy. They might pledge to achieve zero carbon emissions or introduce sustainability measures – but it’s usually within specific financial confines. The objective seems to be incremental change that is budget-friendly rather than a transformative shift that our world desperately requires. Such a cautious approach extends beyond environmental concerns like poverty and food scarcity.
There’s an unmistakable urgency for a paradigm shift from mere transactional, incremental leadership to one that is genuinely transformational. True leaders, from the boardroom to the grassroots, must advocate for circumstances enabling employees to express themselves authentically and passionately champion their causes. This enlightened approach might mean making brave decisions that recalibrate core products or services for the collective good.
Outdated reward model
Take some global drinks giants. Despite loud proclamations of societal care, will they ever drastically slash sugar content or eradicate single-use plastics significantly? Similarly, what would it take for leading energy companies, for all the promises to lead innovation in renewable energy, to say in five years, “We will not sell a single barrel of oil anymore”?
These examples underscore the pervasive notion that steady, incremental steps might eventually result in transformative change – a tragically flawed and foolish belief. If someone wants to be a transformational leader, they must understand that consistent incremental leadership will never be enough.
More than that, incremental leadership is a blocker to meaningful change. With its unwavering focus on shareholder value and customer satisfaction, the business landscape is wired to reward the small, regular wins of incremental leadership. This system becomes an intoxicating drug for leaders, addicted to the euphoria of routine and modest successes.
When incremental leadership goes wrong
However, the frailty of such a model is evident when it stumbles. For instance, a leader might have had three good years, but suddenly something happens, and the business has a bad year. The knee-jerk reaction is to fire a hefty fraction of the workforce or for the board to vote out the CEO and others at the executive level.
Further, we are so used to the negative consequences of straying too far away from the expected path that CEOs are disincentivized to be non-incremental leaders.
At the same time, internal mechanisms must be in place to support and even encourage transformational decisions. If a leader announces ambitious emission reduction goals at the year’s onset, the subsequent quarterly discussions should not merely revolve around revenue or profits. The focus must remain unwaveringly on those transformative objectives.
A year ago, in September 2022, Patagonia’s founder, Yvon Chouinard, made a transformational decision by announcing he would, in effect, bequeath the outdoor clothing company to Mother Nature. It spurred other leaders in the retail industry to be bold. In the same month, Edinburgh-headquartered shampoo-maker Faith in Nature became the world’s first organization to appoint “Nature” to an executive board.
Essentially, the incremental leadership model is at odds with the values and culture businesses purport to their consumers. As we navigate the challenges of 2023 and beyond, the clamor for transformational leadership intensifies. It isn’t just a business imperative; it’s a moral obligation for the world we hope to shape.
