Leadership responsibility is in the news almost every day. Why is this becoming so important now? Is there a suggestion that leaders are failing to drive their organizations? The answer is yes—and no.
True, the global economy has experienced a long tail of growth. Many companies have doubled the value of their share prices. Globalization has opened up new market opportunities, new rights for people and new growth.
But a sustainable future is under threat. Many people in advanced and emerging economies have not benefited from economic growth. Environmental issues threaten our planet, putting our future at risk. And the promise of advanced technologies is not without its consequences. There are negative side-effects, bringing risk to our jobs, our health and our privacy.
Today, leaders are having to face new responsibilities. They must deliver organizational performance, embrace continuous innovation to unlock long-term value, and—and this is the most challenging of all—build and earn stakeholders’ trust. These stakeholders—consumers, employees, investors, business partners, policymakers and representatives of civil society—are exponentially vocal in demanding a more equitable and sustainable wave of growth and the generations Y and Z are at the front line of this movement.
Making it happen
Is it realistic to deliver organizational value and honor societal values? Our research titled “Seeking new leadership” would argue it is. We analyzed more than 2,500 listed companies. We found that those who combine top-tier innovation with top-tier sustainability and trust outperform their industry peers. Estimated operating profits are 3.1 percent higher on average, and these companies deliver a higher annual total return to shareholders than their industry average.
What makes the difference? We found that the way they are led, matters. Leaders of these companies display distinctive leadership qualities.
Our research aimed to define a new model of responsible leadership in the 2020s—one that delivers sustainable and equitable growth for all. With that objective, we extended our analysis to listen to the views of more than 20,000 people around the world (business leaders, stakeholders, emerging leaders and generation Y and Z[i]). We asked about the leadership qualities they value most and those that are critical in this new decade. We then classified those qualities into Five Elements (see Figure 1).
Figure 1. The Five Elements of Responsible Leadership
It may come as little surprise to you that company executives and stakeholders value leadership qualities differently. Companies with strong financial performance value first and foremost Technology & Innovation. While stakeholders signal the growing importance of Mission & Purpose and Emotion & Intuition. And emerging leaders, represented in our research by the Forum of Young Global Leaders and the Global Shapers Community, gave the highest priority to Stakeholder Inclusion.
Despite some differences of opinion, we know that there’s a consensus on the need to adopt the Five Elements of leadership as we enter a new decade. We believe that, whatever the leadership level, everyone has an opportunity—and yes, even an obligation—to build a sustainable and equitable future for all.
Take a look at our report about creating a new model of leadership. And watch for our blog to come taking a deeper dive into the Five Elements Model and the journey beyond.
[i] The 5 Elements of Responsible Leadership was shaped by input from more than 20,000 people around the world. Via surveys, we obtained the views of 1,830 World Economic Forum Young Global Leaders and Global Shapers, 2,298 senior company executives, and 2,971 business stakeholders (consumers, employees, investors, business partners, regulators, and representatives of civil society). We hosted three online focus-group discussions bringing together 500 people born mostly since 1980—Generations Y and Z. We interviewed a sample of leaders individually. And we benefited from other Accenture research that surveyed more than 2,500 CEOs and company executives and more than 11,000 consumers and employees.