Leadership in VUCA-World

26 Jan 2024
We are honoured to kick off the ‘Sasin Collaborative Thought Leadership: Transforming Our Critical Systems’ series with the vision and insights shared with us by eminent business leader and thinker, Professor Dr. Klaus M. Leisinger, on the importance of purposeful leadership as a foundation for the creation of future-fit systems.  
Leadership in VUCA-World
by Klaus M. Leisinger We live in a world that is characterized by volatility, uncertainty, complexity and ambiguity (VUCA). Doing the right thing in such a environment requires the ability to successfully manage economic, social and ecological dilemmas in search of corporate success that contributes to the social and ecologial sustainability goals. To say it bluntly: The complexity and dimension of the issues we face today is the result of the deficient political, business and societal leadership of the past. As we cannot solve our problems with the same thinking we used when we created them, and as it would be insanity to do the same thing over and over again and expecting different results, leadership concepts must be scrutinized with regard to their ability to do the right thing in the VUCA context. Leadership has always been demanding, but leadership under today’s conditions is exceptionally difficult. While “transforming our world” towards sustainability (Agenda 2030) necessitates a different leadership profile also in the political, societal and academic sphere, we will focus here on business leadership. Business enterprises are “specialized organs of society performing specialized functions” – and this in different contexts (OHCHR 2011). Business leadership starts with reflecting on and answering the “why-question”, i.e. the corporation’s purpose: “Why are we we doing what we are doing? What are our goals? What is the legitimacy of our business and the corresponding activities in a greater sustainability context?” A thorough discourse of the purpose will, on the one hand, help leaders to determine the responsibility demarcation from other societal sub-systems such as e.g. public policy, non-governmental organizations and academia. On the other hand, acknowledging that business companies are part of a larger societal whole, the discourse on purpose helps to decide with which social groups professional relationships are to be established and in what way. Profits are not an end in itself but the reward for a comprehensive good performance in all dimensions of corporate impact. A helpful tool to create a corporate culture that combines entrepreneurial spirit and effectiveness with an responsible contribution to society as a whole is a values-based management concept ensuring that,
  • the company’s mission is defined holistically, i.e. being not only successful in the short-term business, but in the longer-term generation of social capital, the protection of natural capital as well as in the promotion of human dignity and human rights;
  • a catalogue of basic values is defined (with the participation of many employees), the content of which is non-negotiable also in difficult times and ensures legitimacy and not only legality of corporate actions;
  • corporate guidelines as well as codes of conduct are articulated in the spirit of these values – -compliance management is enforced accordingly in everyday business life;
  • Criteria for personnel selection (hiring), promotions, and performance appraisals reflect the spirit of these values and guidelines.
To create a corporate performance culture like this necessitates a special personality profile. Capabilities and competences like adaptability and flexibility in response to the rapidly changing and unpredictable nature of the environment, strategic thinking, resilience, and communication skills continue to be preconditions to good leadership – but “interesting times” ask for more than these traditional leadership capabilities. Effective leaders in a VUCA world need to have an orientation that the eminent German psychoanalyst and humanistic philosopher, Erich Fromm, called “biophilic”, or Albert Schweitzer called “reverence for life”. This includes the basic elements care, responsibility, respect and knowledge:
  • Care, i.e. recognizing the needs of other people (colleagues, employees, customer, stakeholders), strengthening their personalities, values and self-awareness; motivating them through sensitivity, recognition and shared values; and, in particular, helping employees to grow. Care also includes the intergenerational application of the Golden Rule, i.e. not to do to human beings of future generations what you would not wish to have done to yourself;
  • Sense of responsibility, i.e. the leaders’ response to the needs, expressed or unexpressed, of another human being. To be “responsible” means to be able and ready to “respond” to those needs, including developing sensitivity for human dignity and rights;
  • Respect for others, i.e. the ability to see a person as she or he is – and not seek to manipulate them so that they become as we want them to be. Respect is expressed by being aware of and accepting another human being’s unique individuality in such a way that their dignity is preserved;
  • Knowledge, i.e. not only life-long learning about new social, ecological, psychological and other phenomena, but transcending the concern for oneself and learning to see other people in their own terms, without the filters of self-interest, considerations of utility, prejudice and organizational hierarchy. To do so requires leaders to possess ‘self-knowledge’, a sober awareness of their strengths and weaknesses, talents and competence, prejudices and blind spots.
Last, but not least: Also leaders are human beings and thus concerned about the legacy they leave: Leaders in any sphere of society who are mindful of their legacy are aware that short-term success remains an important duty but never an isolated, overruling criteria for doing the right thing.   Suggested further reading: Klaus Leisinger (2020): The Art of Leading. CRT publications, Minneapolis; Klaus Leisinger (2021): Integrity in Business and Society. CRT publications, Minneapolis; Erich Fromm: (1956/1975): The Art of Loving, London; Leipzig Graduate School of Management (2017): The Leipzig Leadership Model, Leipzig; United Nations (2011): Guiding Principles on Business and Human Rights. New York / Geneva.
About the Author Klaus M. Leisinger is the former President and CEO of the former Novartis Foundation for Sustainable Development – a position that was part of the company’s senior management. He worked for UN Secretary General as his Special Advisor on the Global Compact and subsequently as Special Advisor on the 2030 Agenda for Sustainable Development and Business Ethics for the Global Compact. He is a professor emeritus at the University of Basel (Switzerland) and continues to research and teach on business ethics and corporate responsibility for Sustainable Development at universities in Europe, the US and Asia.

Sasin Collaborative Thought Leadership: Transforming Our Critical Systems Complex multi-actor systems have developed around satisfying critical human needs, such as nutrition, mobility, energy, or housing. These systems, as well as enabling sub-systems such as education, finance, etcetera, represent most of our economic activity, but there is also enormous inefficiency embedded in the complexity and dynamics through which these systems have evolved, making them responsible for most of humanity’s environmental and social impact. Current efforts to reduce our negative impact can hardly be considered successful, because too much focus is still on marginal improvement of our traditional models. Only 18% of the 169 targets set for the 2030 SDGs are on track to be reached (most targets show virtually no progress and 15% are in fact reversing). This is why increasingly, scholars and practitioners are trying to understand the nature of systemic change, the radical reinvention of our critical systems. Cambridge University Press recently published ‘Transforming our Critical SystemsHow Can We Achieve the Systemic Change the World Needs’ by Sasin professor GJ van der Zanden and researcher Rozanne Henzen. Sasin has invited thought leaders and practitioners from around the world to share their visions and insights on the reinvention of the systems that they are part of. These pieces provide a rich variety of perspectives from business, policy makers, civil society, academia and think tanks, as well as enablers such as finance, technology and start-ups. In systems change, incorporating perspectives from multiple stakeholders is essential to come to a shared understanding of the system dynamics and challenges, develop a shared vision of the future and explore possible interventions and collaborations.
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