Leadership reflections from 2023

If the following statement wasn’t clear enough in January, it surely is right now in December.

The leadership approaches which have got executives and organisations to where they are today are not going to be enough for them to succeed in two or three years’ time.

In this newsletter, I have regularly discussed the level of disruption in today’s world. Seismic events are happening every year. If 2022 was marked by Russia’s invasion of Ukraine and the cost of living crisis, 2023 will be remembered for the onset of generative AI and the Israel/Palestine conflict. All this disruption means business models, even in the short-term, are under threat.

Who knows what 2024 will have in store? One thing is certain, though: leaders and their organisations need to adapt to a world that is changing at an ever quicker pace. Therefore, in this final Leadership 2050 newsletter of 2023, I am reflecting - using my own experiences and some of the year’s major news stories - on leadership lessons we can take into the new year.

1. The necessity of leading from stillness

At the beginning of the year, I started a new role as CEO of Transcend.Space, my leadership coaching company (which I have been running alongside my work at the University of Oxford’s Saïd Business School). As part of this new beginning, I hosted Transcend.Space's first leadership retreats, inviting colleagues and partners to stunning surroundings in Brecon Beacons, south Wales, in April and West Lexham, Norfolk, in November. These provided a prototype for the global leadership retreats Transcend.Space is launching next year. The insights which emerged were more than I could have hoped for.

What these retreats did was further my belief that leaders need to… pause.

What we did was get away from the relentless grind of running businesses - and being wired to emails, Zoom meetings and Slack messages - and connect with nature for a few days. We went for walks. We looked at trees. We opened up our vulnerabilities to each other.

What we subsequently got out of this stillness was space to collectively explore some of the challenges we were coming across with our clients, and in our industries. And, on a personal level, reflect on our own abilities and directions as leaders (read more about this in October’s newsletter). Given the disruption in today's world, it’s never been as important for leaders to retreat and reflect - because if they can’t see what is coming on the horizon for their organisations, they are not doing their job properly.

2. Rhetoric over action continues to fail

Last week saw the conclusion of an often-fraught COP28. While the end agreement saw a historic commitment to “transition away” from fossil fuels, there are nagging doubts that the ambiguity of the text still gives wiggle room for the oil companies to pursue short-term profits over long-term climate goals.

However, we can look at the example of Shell in 2023 and take encouragement that companies which demonstrate more rhetoric than action will be called out.

For example, Follow This, the activist investor, continues to cause headaches at every AGM. This year, its resolution calling for more ambitious climate targets got 20% support from shareholders. Shell had issued guidance saying the resolution was "not in the best interest of shareholders". But how long will that approach be feasible?

Meanwhile, pressure is coming from within the company, with employees issuing an open letter to CEO Wael Sawan in September calling out his energy transition strategy. In addition, regulators have got involved, with the UK’s Advertising Standards Authority banning “misleading” adverts in June about the environmental impact of its energy production activities. It shows how companies which don’t match their marketing with concrete activity will be dragged into disrepute.

3. The good that can happen from leading for impact

This year, I released the third series of my Leadership 2050 podcast. The first of those nine interviews profiled a leader unlike any I’ve come across before: Jack Sim, founder and director of the World Toilet Organization (WTO). You can read my detailed reflections about this conversation in my newsletter from March but my key takeaway was the good that can happen when someone leads for impact.

Jack, who for 22 years has successfully campaigned for governments across the world to install toilets, has done so with next to no resources, employing just three people. He also has a hard time winning financial backing because, as he told me, many companies would rather be associated with green and blue causes as opposed to toilets.

He gets around this by embracing his “Mr Toilet” persona - he is always happy to pose for publicity pictures sitting on a toilet or brandishing a plunger - and through the sheer skill of his advocacy work which has convinced governments ranging from Brazil to China to prioritise safe sanitation.

Jack may be a leader of a non-profit, but there are lessons executives at for-profit organisations can take from him given the challenges the world is facing. Consider this powerful quote from the episode: “I think that we need ultimately to define a billionaire or a company based on this: that a billionaire is [someone] that improves the life of a billion people.”

4. How far should businesses go in making moral judgements?

During the summer, the former UK Independence Party and Brexit Party leader Nigel Farage kicked off an almighty row in the UK when he claimed his bank, Coutts,* had closed his account because it did not agree with his political views. Farage, using a subject access request, then acquired Coutts documents which said his views “do not align with our values”. An independent review released in October found the account closure was lawful but that his political views were a factor in the decision. This was a saga which made it to the top of government, with UK finance minister Jeremy Hunt pledging to “tighten the law to stop people being debanked for the wrong political views”.

It raises an interesting question: how far should businesses go when it comes to challenging or controversial clients? One might not like Farage, but is it up to businesses to make moral judgments… and especially when banks like NatWest, which owns Coutts, have a key role in the functioning of society? Ultimately, we’re in a democracy and it’s down to governments and police forces to set out the boundaries. Purpose is now a mainstream concept in business, but it also needs to be measured.

*Incidentally, I interviewed Peter Flavel - then-CEO of Coutts - in the third series of the Leadership 2050 podcast. The interview took place before he stepped down in the wake of the Farage saga, having said the bank fell below its “high standards of personal service”. Peter did lots of good work modernising Coutts and I reflected on that in this newsletter from May.

5. A business model of the future

Another highlight from the third series of the podcast was my interview with Pinar Akiskalioglu, founder of Takk, an “essentials only” personal care brand which urges customers to only buy the bathroom products they need (shampoo, hand soap, toothpaste etc). What is more, there is only one version of each product. It’s a company taking a stand against the “choice overload” many beauty brands force on consumers.

Pinar asks her customers to consume less for the good of the planet. She has taken a stand against the 20th century ideal of profits above all else. And yet, almost paradoxically, she has created a loyal base of customers who have bought into Takk’s “we want to sell you less” promise.

What is different about Takk is that its business is less about the products it sells and more about the customer’s choice behind buying those products. Given the environmental challenges we face, businesses need to be part of the solution - and Takk has a business model of the future.

A message from the author

Thank you for reading the 56th edition of the Leadership 2050 newsletter. You may be interested to know why I am writing it. As a senior fellow of management practice at the University of Oxford’s Saïd Business School, my research and teaching focuses on how leaders transcend 21st century challenges such as disruptive technology change, the climate crisis and creating diverse and inclusive environments… alongside the ongoing challenge of delivering profitable growth. At Saïd, I direct the Oxford Advanced Management & Leadership Programme and, in this capacity, work with leaders from many geographies, industries and governments. All this has given me a deep understanding of how good leaders create value - and bad leaders destroy it. One could argue that never before has this topic been so important on a global stage, hence why I am undertaking this work.