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Sustainability: Leadership, Values and Culture in a New Leadership Paradigm

Richard Barrett

The Global Sustainability Challenge?

Global Sustainability Issues

Pandemics

Climate Change

Global Economy

GlobalTerrorism

Poverty Reduction

Food Resilience

Natural Disasters

Energy Resilience

Species Extinction

WaterShortages

The significant problems we face cannot be solved at the same level of thinking that created them.

Pollution

Waste Disposal

The Sustainability Challenge

The problems of existence have become global but the decision-making structures we have for

dealing with them are national.

We cannot move forward without a high degree of global cooperation.

A New Leadership Paradigm

Private Sector

Social Sector

Public Sector

The paradigm that divides the world into the social sector, the private sector,

and the governmental sector is not working.

It creates artificial barriers. We are each a constituent of the

problem, so we have to combine our forces, our efforts, and our

competencies.

Tex Gunning, Unilever, Best Foods Asia

Sustainability and the New Leadership Paradigm

Business is a wholly owned subsidiary of society, and society is wholly owned subsidiary of the environment.

If we lose our environment and our life-support systems, our society will perish.

If we lose our society, we will lose our economy and our businesses will perish too.

Our Business Leaders need to recognise that:

Ultimately, the problems of existence we face are issues of consciousness.

We will only get beyond this stage of our collective evolution if we can put aside our narrow self-interest, focus on the whole system, and build a values-driven

framework of policies that support the common good.


Richard Barrett, The New Leadership Paradigm, 2011

What this means for Business and Politics

Political leaders must give up their parochial self-interest andexaggerated false belief in national sovereignty learn how to solve the problems of

existence through international cooperation and collaboration.

Business leaders need to work with their competitors, political and societal leaders to define a framework of policies that support the evolution of our global society by

developing industry charters that regulate the rules of competition between companies in a way that supports the societal common good.

Building a sustainable future for everyone is not just societal imperative. It is business imperative, too.

A Crisis in Leadership


After conducting fourteen formal studies and more than a thousand interviews, directly observing dozens of executives in action, and compiling innumerable surveys, I am completely convinced that most organisations today lack the leadership they need.

John P. Kotter and James L. Heskett, Corporate Culture and Performance (New York: The Free Press, 1992).

John Kotter, Harvard Business School


I have come to believe that much of what my colleagues and I taught has caused real suffering, suppressed wealth creation, destabilized the world economy, and accelerated the demise of the 20th century capitalism.

We managed to produce a generation of managers and business professionals that is deeply mistrusted and despised by a majority of people in our society and around the world. This is a terrible failure.

Shoshana Zuboff, “The Old Solutions Have Become the New Problems,” Business Week, Viewpoint, July 2, 2009.

Shoshana Zuboff, Harvard Business School


Bill George, Harvard Business School

An enormous vacuum in leadership exists today—in business, politics, government, education, religion, and nonprofit organisations. Yet there is no shortage of people with the capacity for leadership.

The problem is we have a wrongheaded notion of what constitutes a leader, driven by an obsession with leaders at the top.

Bill George, True North: Discover Your Authentic Leadership (San Francisco: Jossey-Bass, 2007).


Average leaders take care of themselves and their families.

Good leaders take care of themselves, their families, and some of the community.

Great leaders—and great companies—not only take care of all stakeholders but also want to change the world.

They want to leave the world better than they found it.

Tex Gunning, Unilever, Best Foods Asia

A shift in focus from “I” to “we”

A shift from self-interest to the common good

A shift from being the best in the world to the best for the world.

WE NEED A NEW LEADERSHIP PARADIGM

We need a Culture Change

The Three Mantras of Culture Change

The Three Mantras of Culture Change

Cultural Capital is the new frontier of competitive advantage.

Organisational transformation begins with the personal transformation of the leaders.

Measurement matters. If you can measure it you can manage it.

From Leader’s Values to Shareholder Value

Corporate Sector Leader’s Values/ Behaviours

Corporate Culture

CompetitiveAdvantage &Resilience

Performance & Shareholder

Value

From Leadership to Customer Satisfaction

Public SectorLeader’s values/

behaviours

OrganisationalCulture

Mission Assurance

CustomerSatisfaction

The Leader and the Values

Tom Peters, “In Search of Excellence: Lessons from America’s best run companies”, 1983

The real role of the leader is to manage the values of the corporation.

For the first time in human history we have the possibility of making the evolution of

consciousness, conscious.

Why now? Because we can measure it, both at a personal, organisational and national level.

And if you can measure it, you can manage it.

The Good News

Richard Barrett, The New Leadership Paradigm, 2011

Models and Tools for Measuring Personal, Organisational and National Consciousness

1998 20111995 2006

Personal Growth and

Transformation

Organisational Growth and

Transformation.Measuring

Consciousness by Mapping Values

Implementing Cultural

Transformation based on eight

years experienceA Text Book, Web Site, and Learning System

for the 21st Century Leader

Origins of the Cultural Transformation Tools

Growth NeedsWhen these needs are fulfilled they do not go away, they engender deeper levels of motivation and commitment.

Deficiency NeedsAn individual gains no sense of lasting satisfaction from being able to meet these needs, but feels a sense of anxiety if these needs are not met.

Physiological

Safety

Love & Belonging

Self-esteem

Know and Understand

Abraham Maslow

Self Actualization

Maslow’s Needs to Barrett’s Consciousness

Know and Understand

Physiological

Safety

Love & Belonging

Self-esteem

Abraham Maslow

Know and Understand

N e e d s C o n s c i o u s n e s s

Self-Actualization

Richard Barrett

Maslow’s Needs to Barrett’s Consciousness

Know and Understand

Physiological

Safety

Love & Belonging

Self-esteem

Know and Understand

N e e d s C o n s c i o u s n e s s

1. Expansion of self-actualization into multiple levels.

2. Substitute ‘states of consciousness’ for hierarchy of needs.

3. Each state of consciousness is defined by specific values and behaviours.

Stages in the Evolution of Personal Consciousness

Positive Focus / Excessive Focus

Service

Making a difference

Internal Cohesion

Transformation

Self-esteem

Relationship

SurvivalFinancial Security & SafetyCreating a safe secure environment for self and significant others. Control, greed

BelongingFeeling a personal sense of belonging, feeling loved by self and others. Being liked, blame

Self-worth Feeling a positive sense of pride in self and ability to manage your life. Power, status

Personal GrowthUnderstanding your deepest motivations, experiencing responsible freedom by letting go of your fears

Finding Personal MeaningUncovering your sense of purpose and creating a vision for the future you want to create

Collaborating with PartnersWorking with others to make a positive difference by actively implementing your purpose and vision

Service to Humanity and the PlanetDevoting your life in self-less service to your purpose and vision


Financial StabilityShareholder value, organisational growth, employee health, safety. Control, corruption, greed

BelongingLoyalty, open communication, customer satisfaction, friendship. Manipulation, blame

High PerformanceSystems, processes, quality, best practices, pride in performance. Bureaucracy, complacency

Continuous Renewal and LearningAccountability, adaptability, empowerment, teamwork, goals orientation, personal growth

Building Corporate CommunityShared values, vision, commitment, integrity, trust, passion, creativity, openness, transparency

Strategic Alliances and PartnershipsEnvironmental awareness, community involvement, employee fulfillment, coaching/mentoring

Service To Humanity And The PlanetSocial responsibility, future generations, long-term perspective, ethics, compassion, humility

Stages in the Evolution of Organisational Consciousness

Service

Making a difference

Internal Cohesion

Transformation

Self-esteem

Relationship

Survival

Stages in the Evolution of National Consciousness


Economic Stability Prosperity. Health, Defense, Social Safety Nets. Corruption, Greed, Violence

Social StabilityConflict Resolution, Racial Harmony, Rituals. Discrimination, Intolerance

Institutional EffectivenessRule of Law, National Pride, Governmental Efficiency. Bureaucracy, Elitism, Power

Democratic ProcessesEquality, Freedom of Speech, Consensus, Adaptability, Accountability.

Strong Cohesive National IdentityTrust, Openness, Transparency, Shared Vision and Values, Fairness.

Strategic Alliances with Other NationsRegional Collaboration, Environmental Awareness, Quality Of Life.

Global SustainabilityHuman Rights, Future Generations, Ecological Resilience.

Service

Making a difference

Internal Cohesion

Transformation

Self-esteem

Relationship

Survival

Placement of Values by Level

Current Culture 100 EmployeesTop Ten Values

1. tradition (L) (59)

2. diversity (54)

3. control (L) (53)

4. goals orientation (46)

5. knowledge (43)

6. creativity (42)

7. productivity (37)

8. image (L) (36)

9. profit (36)

10. open communication (31)

10

42 5

7

9

6

8

3

110

Service

Making a difference

Internal Cohesion

Transformation

Self-esteem

Relationship

Survival

Cultural Entropy

Distribution of Values by Level

Current Culture 100 Employees

11%

Service

Making a difference

Internal Cohesion

Transformation

Self-esteem

Relationship

Survival 1

2

3

4

5

6

7

Organisational (Cultural) Values Assessments

What is Culture?

“The way things are done around here”

The culture of an organisation or any group of individuals is a reflection of the values, beliefs and behaviours of leaders of the group and the legacy of past leaders.

Engineering and Projects Company (339)

Level 7

Level 6

Level 5

Level 4

Level 3

Level 2

Level 1

Personal Values Current Culture Values Desired Culture Values

IRS (P)= 6-4-0 | IRS (L)= 0-0-0 IROS (P)= 0-2-5-0 | IROS (L)= 1-1-1-0 IROS (P)= 1-3-6-0 | IROS (L)= 0-0-0-0

Matches

PV - CC 1CC - DC 4PV - DC 2

Health Index (PL)

PV: 10-0CC: 7-3

DC: 10-0

1. honesty 169 5(I)

2. accountability 165 4(R)

3. commitment 150 5(I)

4. continuous learning 92 4(I)

5. balance (home/work) 91 4(I)

6. family 91 2(R)

7. self-discipline 91 1(I)

8. responsibility 89 4(I)

9. respect 81 2(R)

10. open communication 76 2(R)

Black Underline = PV & CC Orange = CC & DC P = Positive L = Potentially Limiting I = Individual O = Organizational

Orange = PV, CC & DC Blue = PV & DC (white circle) R = Relationship S = Societal

1. continuous improvement

111 4(O)

2. customer satisfaction

111 2(O)

3. safety conscious 102 1(O)

4. cost reduction 88 1(O)

5. job insecurity (L) 77 1(O)

6. inconsistent (L) 75 3(I)

7. teamwork 74 4(R)


9. blame (L) 71 2(R)

10. corporate image 64 3(O)


2. customer satisfaction

147 2(O)

3. continuous improvement

143 4(O)

4. employee development 111 4(O)

5. employee recognition 96 2(R)

6. commitment 95 5(I)

7. inspirational leadership 95 6(O)

8. employee fulfillment 94 6(O)

9. teamwork 90 4(R)

10. professionalism 80 3(O)

Values Plot Copyright 2011 Barrett Values Centre February 2011

The values that are important to

employees in their personal lives.

How employees experience the company - What is working well? What is undermining the sustainability of the company.

What employees believe is necessary

for the company to achieve its

full potential

Engineering and Projects Company (339)

C

T

S

Values Distribution Copyright 2011 Barrett Values Centre February 2011

C = Common GoodT = TransformationS = Self-Interest

Positive ValuesPotentially Limiting Values

Total number of votes for all values

at each level

Cultural Entropy % of Votes for Limiting

Values

Common Good

Transformation

Self Interest

Definition of Cultural Entropy

Cultural EntropyCultural entropy is the amount of energy consumed in unproductive work.

It is a measure of the conflict, friction, and frustration that exists within an organisation or social system.

35

ValueCurrent Culture Votes

Desired Culture Votes

Value Jump

accountability 71 180 109

inspirational leadership 15 95 80

employee fulfilment 23 94 71

employee recognition 28 96 68

employee development 57 111 54

professionalism 36 80 44

efficiency 30 74 44

commitment 55 95 40

honesty 33 70 37

balance (home/work) 29 66 37

Value JumpsVotes for Values in

Current CultureVotes for Values in

Desired Culture

Nedbank, South Africa: An Example of Cultural Evolution

Entropy 13%Entropy 25% Entropy 19% Entropy 17% Entropy 14%

Nedbank: Current Culture Evolution

1. cost-consciousness2. profit 3. accountability 4. community involvement 5. client-driven 6. process-driven7. bureaucracy (L)8. results orientation 9. client satisfaction10. silo mentality (L)

2005

1. cost-consciousness2. accountability 3. client-driven 4. client satisfaction 5. results orientation 6. performance driven7. profit8. bureaucracy (L)9. teamwork 10. community involvement

2006

1. client-driven 2. accountability 3. client satisfaction 4. cost-consciousness5. community involvement6. performance driven 7. profit8. achievement9. being the best 10. results orientation

2007 2008

1. accountability2. client-driven 3. client satisfaction 4. community involvement 5. achievement6. cost-consciousness7. teamwork8. performance driven9. being the best 10. delivery

2009

1. accountability2. client-driven 3. client satisfaction 4. cost-consciousness5. community involvement 6. achievement7. teamwork 8. employee recognition 9. being the best10. performance driven

5 matches4 matches4 matches3 matches 6 matches

25%

19%17%

14%13%

0%

5%

10%

15%

20%

25%

2005 2006 2007 2008 2009

Nedbank: Cultural Evolution

Entropy reduction leads to improved performance—increased revenues, profits and share price. Working toward entropy of <10% will result in healthy functioning of the organisation and improvement of staff morale.

Entropy Scores

Entropy risk bands

<10% Healthy functioning10-19% Some problems requiring careful monitoring20-29% Significant problems requiring attention30-39% Crisis situation requiring immediate change40%> Impending risk of implosion, bankruptcy or failure

Cultural entropy represents the degree of dysfunction in a culture

Cultural Entropy

Entropy Impact

<10% Prime: Healthy Functioning

11-19% Minor Issues: Requiring cultural and/or structural adjustment

20-29% Significant Issues: Requiring cultural and structural transformation, and leadership coaching

30-39% Serious Issues: Requiring cultural and structural transformation, leadership mentoring/coaching, and leadership development

40-49% Critical Issues: Requiring cultural and structural transformation, selective changes in leadership, leadership mentoring/coachingand leadership development

Nedbank: Response Rate to Values Survey

18276083

10155

14091

18206

0

4000

8000

12000

16000

20000

2005 2006 2007 2008 2009

63.0%

50.4%

28.0%

35.5%

20.2%

28,898 employees in 2009

Response rate

nu

mb

er

of

pa

rti

cip

an

ts

Nedbank: Cultural Evolution

Nedbank Staff Survey Scores

59.6% 66.3%71.5% 75.1% 78.8%

0.0%20.0%40.0%60.0%80.0%

100.0%

2005 2006 2007 2008 2009

Revenue grew average 16.9% (CAGR) per year from 2004 to 2007

Share Price grewaverage 20.4% (CAGR) per year from 2004 to 2007

Nedbank: Financial Impact of Cultural Evolution

78

100

134 136

96

0

20

40

60

80

100

120

140

160

2004 2005 2006 2007 2008

Closing share price (Rand)

1402715809

18948

22428 22077

0

5000

10000

15000

20000

25000

2004 2005 2006 2007 2008

Revenue Rm (operating income)

CAGR : Compound Annual Growth Rate

Values in Organisations

Tom Boardman Former CEO of Nedbank, South Africa

National and Regional Values Assessments

National/Regional Values Assessments

Denmark Latvia Sweden Canada

Iceland Bhutan USA Belgium

AustraliaUK North West) BrazilFinland

Spain (Extremadura) Macedonia (Skopje) Argentina Venezuela

Entropy Percentages by Nation (2007 – 2010)

72%

63% 60% 58%54% 53% 51% 48%

43% 42% 39%34% 32%

21%

4%

0%

10%

20%

30%

40%

50%

60%

70%

80%

Vene

zuel

a

Icel

and

Arg

enti

na

USA

Latv

ia

Belg

ium

Braz

il

Finl

and

UK

(NW

)

Aus

tral

ia

Spai

n (E

XT)

Swed

en

Cana

da

Den

mar

k

Bhut

an

Cultural entropy is a measure of the dysfunction in a social system

Cultural Entropy Impacts in Nations

Cultural Entropy in Nations

Entropy Impact

< 10% This a low level of entropy and augurs well for the future.

11%-20% This is a relatively low level of entropy indicating that there is some degree of dissatisfaction with the current culture that could lead to social unrest.

21%-30% This is a moderate level of entropy indicating potential unease among the population and/or potential conflict situations that need to be addressed.

31%-40% This is a relatively high level of entropy indicating unresolved issues that if left unaddressed could lead to significant social unrest.

41%-50% This level of entropy indicates leadership issues that if left unaddressed could lead to changes in government.

>51% This is a high level of entropy that could lead to riots, civil disobedience and social unrest. This indicates a need for a change in policy that could also be accompanied by a change in government

Iceland: August 2008 (635)

Level 7

Level 6

Level 5

Level 4

Level 3

Level 2

Level 1

Personal Values Current Culture Values Desired Culture Values

PL= 11-0 | IRS (P)= 6-5-0 | IRS (L)= 0-0-0 PL= 2-8 | IROS (P)= 1-0-1-0 | IROS (L)= 2-3-3-0 PL= 10-0 | IROS (P)= 3-2-3-2 | IROS (L)= 0-0-0-0

Matches

PV - CC 0CC - DC 0PV - DC 4

1. family 420 Level 2

2. honesty 297 Level 5

3. responsibility 258 Level 4

4. accountability 225 Level 4

5. financial stability 185 Level 1

6. trust 181 Level 5

7. friendship 175 Level 2

8. positive attitude 175 Level 5

9. humor/fun 158 Level 5

10. adaptability 155 Level 4

11. respect 155 Level 2

Black Underline = PV & CC Orange = CC & DC P = Positive L = Potentially Limiting I = Individual O = organisational

Orange = PV, CC & DC Blue = PV & DC (white circle) R = Relationship S = Societal

1. materialistic (L) 419 Level 1

2. short-term focus (L) 324 Level 1

3. educational opportunities 275 Level 3

4. uncertainty about the future (L)

275 Level 1

5. corruption (L) 269 Level 1

6. elitism (L) 264 Level 3

7. material needs 224 Level 1

8. wasted resources (L) 207 Level 3

9. gender discrimination (L) 196 Level 2

10. blame (L) 177 Level 2

1. accountability 352 Level 4

2. family 307 Level 2

3. employment opportunities 281 Level 1

4. financial stability 249 Level 1

5. optimism 233 Level 5

6. dependable public services 228 Level 3

7. honesty 222 Level 5

8. social responsibility 174 Level 4

9. human rights 163 Level 7

10. poverty reduction 160 Level 1

Values Plot Copyright 2008 Barrett Values Centre September 2008

The values that are important to citizens

in their personal lives.

How citizens experience the country - What is working well? What is undermining the sustainability

of the country.

What citizens

believe is necessary

for the country to achieve its

full potential

Iceland: August 2008 (635)

C

T

S

Values Distribution Copyright 2008 Barrett Values Centre September 2008

C = Common GoodT = TransformationS = Self-Interest

Positive ValuesPotentially Limiting Values

Personal Values

Current Culture Values

Desired Culture Values

To get a copy of this presentation:

http://www.slideshare.net/BarrettValues

• www.newleadershiparadigm.com• www.valuescentre.com

Other relevant Web sites:

http://www.newleadershiparadigm.com/

http://www.valuescentre.com/