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Brain Circuits
There are 4 types of responsible leader. Which one are you?Â
Every leadership approach has its pros and cons. Recognizing your style and knowing how to blend different approaches – and avoid the traps – will improve your ability to respond to challenges and stakeholder expectations.
Traditionalist
The traditionalist leader sees their purpose as maximizing profit and creating short-term economic value for shareholders.
Approach to CSR
Reserved or defensive – corporate social responsibility (CSR) initiatives are determined on a strict economic cost-benefit basis, ensuring basic compliance with laws and industry norms.
Risk: myopia trap
Leadership that is unable or unwilling to respond to stakeholder expectations can lead to stakeholder conflicts or corporate crises, resulting in job losses, destruction of shareholder value, and threats to business survival.
Opportunity seeker
The opportunity seeker shares some of the characteristics of the traditionalist but aims to create social value because of its business and reputational benefits.
Approach to CSR
Opportunistic – views CSR and sustainability as strategic opportunities to maximize shareholder value and improve financial performance.
Risk: credibility trap
If leadership decides to scale back on social and/or environmental initiatives, stakeholders may interpret it as evidence of window-dressing or greenwashing, eroding trust and putting the company’s social license at risk.
Integrator
The integrator’s greater sense of accountability to stakeholders means they try to deliver on multiple bottom lines (profit, people, planet) and go beyond economic, legal, and strategic concerns to incorporate a broader purpose-driven perspective.
Approach to CSR
Proactive – aims to drive positive change and integrative value creation in business and society.
Risk: priority trap
With growing expectations not just to do better but to do more, integrators may also attempt to do too much, exposing themselves to the priority trap and risking loss of focus.
Idealist
Driven by strong moral intentions, idealist leaders dedicate their businesses and energy to solving societal challenges.
Approach to CSR
Sees the business as a means (not an end) to tackle social problems – even if it impedes growth or risks business longevity.
Risk: underperformance trap
If they do not invest in management development, the idealist can be caught in an underperformance trap, risking business failure. The breadth and depth of their challenges also leave them more at risk of burnout.
Key learning
Different leadership styles all have their advantages and disadvantages. Being aware of the pros and cons of each optimizes your decision-making when faced with complex problems, helping you navigate a business successfully and sustainably in times of polycrisis.
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