Why Conscious Leadership Is The New Management Imperative

(This blog was first published in November 2012 and co-written with Joseph Zepedeo at The Integral Business Leadership Group’s website and blog)

“Greatness is not a function of circumstance.  Greatness…is a matter of choice.” – Jim Collins author of From Good To Great: Why Some Companies Make The Leap…& Others Don’t

What do current top business leaders like Yvon Chouinard of Patagonia, John Mackey of Whole Foods Markets, Tony Hsieh of Zappos, Richard Branson of Virgin, and Eric Schmidt of Google, have in common with the late Anita Roddick of the Body Shop and Ray Anderson of InterfaceFLOR?

They all made the shift to a New Way of Leading that takes into account the importance of financial results as well as the way in which those results are produced. They have realized that sustainable success in today’s market is defined by more than short-term profit goals and maximizing shareholder wealth.  This is a necessary but not sufficient condition to sustainable success in a world that is increasingly becoming sensitive to the negative impacts of producing those profits in the first place.  Indeed, it is now a matter of good business for leaders to consider “people, profit and planet” as their management imperative.

This shift is more important today than it has ever been and yet up to now few leaders have been able to answer the call.  And the ripple effects are huge.  How many companies struggle and collapse because of important leadership blind spots that gradually erode opportunities over time?  How many companies have failed because their leaders continued to manage in the same ways that once made them successful?

“Most companies are still dominated by numbers, information and analysis. That makes it much harder to tap into intuition, feelings, and nonlinear thinking – the skills that leaders will need to succeed in the future.” –  Mort Meyerson, Chairman, Perot Systems

In today’s modern “creative economy” the industrial management model, where humans tend to be viewed like material resources to command, control and expend, is rapidly giving way to a more evolved business approach where great leadership and a culture of learning and excellence is being created through the pursuit of higher levels of personal mastery and genuine self-actualization at work.

“Let people be their whole selves” — John Mackey, Co-Founder & Co-CEO of Wholefoods Markets

It is becoming increasingly clear that, long term, a more virtuous pursuit of excellence achieves more in both our personal and professional lives than an unbridled and short-term pursuit of conventional success.  As it turns out, maximizing shareholder wealth and profit maximization are not the dominant driving forces in most long-lasting financially successful companies.

For instance, Collins and Porras found in Built To Last: Successful Habits of Visionary Companies that throughout the history of most visionary companies they saw “a core ideology that transcended purely economic considerations”.  In fact, this group of companies performed over 15 times better financially than the general US market from 1926 up to modern times.

More recently Raj Sisodia and co-authors found in Firms of Endearment: How World-Class Companies Profit from Passion and Purpose that more conscious and purpose-driven companies financially outperformed the market by a 10.5-to-1 ratio (1996-2011).

“The core of leadership is vision. Vision is seeing the potential purpose hidden in the chaos of the moment, but which could bring to birth new possibilities for a person, a company or a nation.” – William van Dusen Wishard

Yet vision alone is not enough.

An increasing body of research shows that the best leaders not only demonstrate commitment to a worthwhile vision, they also have a genuine passion for work, ability to create trusting relationships, can sustainably perform at a high level and maintain a focus on creating results that are aligned with the larger organizational mission. Further, these leaders have realized that conventional KPIs are necessary but not sufficient to inform them about how things are. They also know how to see and interpret the intangible and immeasurable. These are skills that take genuine experience, practice and demand higher degrees of awareness and maturity.

“Your work is going to fill a large part of your life, and the only way to be truly satisfied is to do what you believe is great work. And the only way to do great work is to love what you do.” – Steve Jobs, Apple Founder and past CEO

 “We need to develop the art of being sensitive, intuitive and attuned enough to understand what is happening in the organization.” — John Mackey, Whole Foods Markets Co-founder and co-CEO

Another recent 20-year research project on organizational effectiveness surveying over a million individuals from a broad range of companies and countries undertaken by the Gallup Organization empirically demonstrated that what the most talented employees want and what keeps them retained is found in a leadership culture where they are being seen, valued, are able to grow and develop, experience genuine relationships at work and are encouraged to do what they do best every day.

“Part of my job as a leader is to empower the people that are working with me to unleash their creativity, their ideas, their passions in order for us to jointly serve the purpose of Whole Foods Market.” – John Mackey, Whole Foods

We observe that today’s top leaders are beginning to make this shift.  A shift that is gaining momentum.  We hear more top leaders say that management’s number one business priority is to populate the company with as many great leaders as possible. Based on the latest research on leadership development and our own experience the personal capacities this kind of leader must develop points to something which can best be described as a more Conscious Leader.

Fred Kofman, doctorate in economics from the University of Berkeley, teacher of the year at MIT’s Sloan School of Management and author of Conscious Business: How To Build Value Through Values states that conscious leaders are shifting from unconscious attitudes, behaviors  and reactions to conscious attitudes, behaviors and reactions. For this to happen the leader must grow in the capacity to both be aware of what habitual patterns are limiting their performance AND their power of choice to take new constructive action (breaking old patterns, building new ones and taking unconditional responsibility).

According to Kofman, the conscious leader shows genuine responsibility, integrity, humility, honest communication, win-win negotiation skills, outstanding ability to collaborate with others, greater self-awareness and high levels of emotional mastery.

Jim Collins in Good-To-Great pointed to similar qualities in what he described as “Level 5” leadership; further, he believes that people can evolve to become “Level 5” leaders.  Joiner & Josephs, in Leadership Agility: Five Levels of Mastery, refer to these leaders as “Synergistc” and state that: “we believe that these capacities … represent the cutting edge of leadership development for the 21st Century”.

Having made the shift, there are a growing number of such leaders who are now trying to make mindful leadership and corporate cultural evolution a key priority in their organizations. For example, to sharpen their performance, Google and General Mills have created an in-house program in meditation and mindfulness, John Mackey is consciously pursuing a corporate culture geared towards individual self-realization and transformational change and companies like Zappos are intent on cultivating values such as personal growth, happiness and learning as essential to achieving lasting business success.

If we look at the common threads of these approaches and philosophies, we see that they are pointing towards a shift in leadership that is increasingly engaging the ‘mind, heart and soul’ of people to produce amazing results.

“I believe the highest leverage can be gained by focusing on culture. I also believe that the strongest determinant of an effective, healthy culture is conscious leadership. Developing consciousness in its top managers is the most efficient way for an organization to improve.” – Fred Kofman

We agree that Conscious Leadership is the new master competency to handle today’s complex business challenges in a world that is increasingly demanding “doing well by doing good”.

“The Zen Master would say that profits are what happen when you do everything else right.”  — Yvon Chouinard, Patagonia Founder

“I want to work for a company that contributes to and is part of the community.  I want something not just to invest in.  I want something to believe in.” – Anita Roddick, the Body Shop Founder

Is this kind of leadership coaching only for CEO’s or top executive leaders?  No.  We believe anyone who manages people has leadership responsibility whether they are aware of it or not. Leadership is simply put the way in which a manager manages. An increasing wealth of research shows that the best managers are also great leaders.  Therein lies the developmental opportunity to “populate the organization with great leaders”–as some top leaders have already urged.

So what is the measurable value in developing the leadership capacities described here?

While the following data are based on more conventional coaching approaches, they none-the-less serve to exemplify the power of leadership coaching in general.

Firms of Endearment: How World-Class Companies Profit from Passion and Purpose show that more conscious and purpose-driven companies financially outperformed the market by a 10.5-to-1 ratio (1996-2014). [Raj Sisodia at TED Talk]

For instance, a recent global study conducted by PriceWaterhouseCoopers and Associated Resources Center concluded that the mean ROI for companies investing in coaching was 7 times the initial investment, with over a quarter reporting an ROI of 10 to 49 times  [ICF Global Coaching Study 2009]

The value of leadership coaching is echoed by Eric Schmidt, chairman and CEO of Google, who says his “best advice to new CEOs is to have a coach”.  [Financial Post, 2012]

One large Australian telecom company that had lost 9% of its customers after industry deregulation found that a meditation program helped to stem the company’s loss of customers and saved it US$20 million. [Wall Street Journal 2012]

Another study quoted in FastCompany focusing on Leadership Coaching found that 43% of CEOs and 71% of the senior executive team had worked with a coach and that 63% of organizations say they plan to increase their use of coaching.  Most telling, 92% of leaders being coached say they plan to use a coach again. Both indicate strong endorsements of coaching; the first by the organizations paying the bills, and the second by the leaders who are actually receiving coaching.  [FastCompany, 2006]

General Mills have reported that among experienced leaders participating in their four-day Cultivating Leadership Presence course:

  • 80 percent reported a positive change in their ability to make better decisions with more clarity.
  • 89 percent reported enhanced listening capabilities – to themselves and to others.

Seeing the benefits of this program, more than 30 different organizations have sent leaders from around the world to the program that began with General Mills leaders. They have also become very popular not only for the benefits they have created at work, but also for improving participants’ home lives.

In another study on executive coaching ROI, a large employer in the hospitality industry saved between $30 million and $60 million by coaching its top 200 executives. (Chemistry Business magazine, “The Case for Executive Coaching,” November 2002 International Coach Federation and “Analysis of the 1999 Survey on Coaching in Corporate America”, November 22, 1999)

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