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ST 520 Responsible ManagementSession 9

CSR and Leadership

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Don Minday

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Why should anyone be led by

you?

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Agenda Responsible leadership

Trends in leadership thought Examples Ray Anderson & Interface

CSR heroes

Break

Cultural debriefing Course feedback Exam information

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Leadership is about who you are,

not what you do.

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Leadership can be developed

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What is leadership?

Your models?

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Leadership

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SKILLS Technical Interpersonal Conceptual -

strategy Political -

persuasion Self-awarenessKNOWLEDGE Company,

product, industry, markets

TRAITS Values Personality: self-

confidence, locus of control

Motivation Energy Optimism

ExperienceBackground

DidacticExperiential

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Prolific literature on leadership

2,000 books / year in the U.S. alone

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Historical approaches to leadership in organizations

Transactional

leadershipTransformational leadership

Responsible leadershipEthical "Servant "Authentic "Spiritual "

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Transactional Leadership

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The ability to influence and direct a group

towards the achievement of its

goalsJack Welch

Former CEO of GE

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Transformational Leaders Charismatic - motivate through inspiration

Effective in turnaround situations

Generate exceptional performance

Get media attention

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Pierre-Louis DreyfusFormer CEO of Adidas

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Warren Bennis’ observed qualities of leaders

Has a vision. Communicates the vision Perseveres in pursuit of the vision.

Want to lead, have high level of energy

Self-awareness: Maximizes his/her strengths Minimizes weakness, relies on team

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Responsible leadership A leader who gets "…superior sustainable results

the right way"

"…how you deliver results has a profound impact on the long-term health of the enterprise."

"…fairness, honesty, a long and hard view." – - John Wells, president of IMD Business School, Lausanne

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Responsible leadership (Pless and Mack, 2011)

Value-based and long-term leader-stakeholder relationships (not leader-subordinate relationships)

Responsible leaders build "sustainable relationships with stakeholders…to achieve mutually shared objectives based on a vision of business as a force for good" to achieve sustainable social change for the many [common good] "and not just a few (shareholders, managers). "

NOT an ego trip!

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Ethical leadership (Pless and Mack, 2011)

Leader as a positive role model who acts according to value-based standards and uses principles of moral reasoning in decisions

Focuses on the micro-level, the individual characteristics of a leader, and not on the relationships and multi-level outcomes which characterize responsible leadership.

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Moral managementWith respect to shareholders-customers-employees-community

Immoral managers

Amoral managers

Moral managers

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Moral management Immoral managers

Active negation of what is moral Exploit opportunities for themselves and their company Example: Top management of Enron before company's

collapse

Amoral managers Insensitive to potential long-term consequences of their

actions Lack of ethical awareness Believe business and morality don't mix Ex: Leadership of Total after Erika oil spill

Moral managers Ethics drive their behavior Want to be profitable only if fairness & justice are respected Obeying the law is the minimum, not the standard Ex: CEO of Johnson & Johnson duringTylenol scandal

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3 leadership conceptsRelated to responsible leadership

Servant leadership

Authentic leadership

Spiritual leadership

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Servant leader Others-centered: Focused on followers' success, not ego

building Participative Leads by example Humble

Self-critical, admits mistakes Is a life-long learner Gives credit to the team

Responsible leadership Goes beyond the team Serves the broader organizational purpose and focus, through

stakeholder relationships, on the broader needs of society

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Servant leadership "He (Tony Dungy) tries to lead through service, and I do the

same. I learned that from him in providing the men what they need to be great. Every day when I go to work, I don't think about things I have to do, I think about the things I can do to make my men successful. So I have a servant's mentality in terms of how I approach my job, and I get that from Coach Dungy."

(Many leaders have a mentor)

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Mike Tomlin, cited in Rhoden, W., "Steeler's Coach Takes a Quiet Route to Brillance," NY Times 2 Feb. 2011

Mike Tomlin

Tony Dungy

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Authentic leaders Influence, energize, and develop followers

through: Self awareness: deep understanding of values,

emotions, motives, goals, identity Self-regulation: the ability to align values with intention

and actions. "Walk the talk" Positive psychological state

Comparison to responsible leadership: Both authentic and responsible leadership emphasize

organizational impacts. Responsible leadership's emphasis on stakeholder

relationships takes it beyond organizational boundaries.

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Spiritual leadership Leaders who bring meaning in the workplace How?

Motivating vision Meaningful job

Skill variety Task identity Task significance Autonomy Feedback Recognition Empowerment

Focus on employee well-being

Not the strong external / stakeholder relationship focus of responsible leadership.

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Leadership gap in the financial sector

Focus on individual bonuses instead of overall good of the company.

Too much individual decision making companies have asked business schools, to focus more on team leadership.

Weak management skills: give little feedback, expect long hours, destroy work-life balance

Lack of government oversight / regulation and cooperation with competitors.

Source: "Eyes on the Wrong Prize: Leadership Lapses That Fueled Wall Street's Fall"

Jerome Kerviel, French trader who lost 2.4 bn. € for the Société Générale Bank

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Developing responsible leaders

Can business schools contribute to the development of responsible leaders?

GRLI Globally Responsible Leadership Initiative:

a worldwide network of companies and learning institutions whose mission is to "develop a next generation of responsible leaders"

works closely with the EFMD (European Foundation of Management Development) and would like to "reframe the purpose of management education."

What do you think? Jerome Kerviel

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Responsible leaders

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Jeff Swartz, CEO of Timberland(video)

Joe Santana, head of operations at Mi Rancho tortillas, California

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Local examplesGrass roots initiatives in Le Méné (22)

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Local examplesVision: energy independence by 2030

Révolution énergétique : les Bretons à la pointe

A retired engineer, Marc ThéryThe mayor of St. Gouéno, Jacky Aignel"Don't wait for national politics to act"

Wind farm in Le Mené (22)

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TerracycleTrenton, New Jersey

Vision: Transform waste into useful products

Videos Garbage worm food and other products Entrepreneurial convictions and persistence. How it's done

Tom Szaky, founder and CEO of Terracyle,"built on garbage, run by a kid, loved by

investors"

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Ray Anderson of Interface"Sustainability has been our

salvation"

"The worldwide leader in design, production and sales of environmentally-responsible modular carpet for the commercial, institutional, and residential markets, and a leading designer and manufacturer of commercial broadloom."www.interfaceglobal.com

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It started with a book…

"We've been screwing the planet for 20 years."

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InterfaceRay Anderson's new responsible leadership

New vision: the end of "take-make-waste" Used "Rational, emotional, and moral intelligence." See

video on his business case for responsibility. Managed change:

Selling the vision to stakeholders Passing ownership of vision to stakeholders - small innovations,

incremental changes "bottom-up" Team building, training in process and product innovation

Competitors followed "Seven fronts program": eliminate waste,…

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InterfaceResults: sustainability is good business

Decreased manufacturing costs Decreased inventory Decreased volume of waste sent to landfills Reduced water and energy consumption Reduced greenhouse gas emissions Reduced petroleum-based raw materials

consumption

So why don't more manufacturing companies "go green?"

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Take awayThe responsible leader's "right way"

Long-term stakeholder relationships for the common good

Practices stewardship Develops resources – human, natural, financial capital –

entrusted to him /her Serves the organization and team, not self Takes into account ethics in decision making Demonstrates integrity and character Is an example and inspires through authenticity

consistent in values and actions – walks the talk Seeks to bring meaning to the work.

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"I'm not a leader"

Do you want to be?

What are you doing to develop yourself?

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Your CSR heroes ?