Responsible leadership and ensuring good leadership legacy
What does responsible leadership mean to you personally?
I'm personally in a very happy place, because the concept that organisations now have responsibilities to multiple stakeholders, rather than just making money for the benefit of shareholders, aligns very comfortably with my values.
We have customers, colleagues, communities, and the planet to consider – so multiple and varied responsibilities. Being a successful business is about finding a way of satisfying, to the greatest possible extent, the needs of all those stakeholders.
Sometimes leading responsibly is hard, as whilst you might want to offer cheaper prices to your customers, on the other hand if you're under pressure to offer higher wages to colleagues, satisfying both can be very difficult.
I think philosophically and feel very comfortable that I'm involved in two listed companies – Tesco Plc and Barratt Developments Plc. I'm not just a lone wolf in my thinking – responsible leadership is a strongly held view on the management and boards of both businesses, and it provides a very good yardstick to take decisions against. In management you have to make a lot of rapid decisions and provide a measure on which to base the business principles.
Value systems have shifted over the past decade or so. In my early years as a CEO, I remember meeting a large institutional shareholder who had been going through the company accounts. He had spotted that we'd given a relatively small amount of money to support an organisation such as the RNLI, and said to me, ‘Listen sunshine, when we decide to give our money to charity, we’ll let you know’. I was pretty shocked. I think it's inconceivable that a shareholder would have that mentality or use that sort of language with the company today.
In fact, shareholders are now exerting certain pressures on companies to do the right thing and are recognising that the right thing is not just one dimensional. So, I think responsible leadership is about doing all you can to ensure that the organisations you’re involved in, and the people working for them, understand the importance of this kind of multidimensional approach to management.
One of the big satisfactions of now being in a Chair role is that I can focus on meeting people within the organisation, spotting talent, listening to them, sharing with them and encouraging them. I think learning by example is the best way of doing that. I've always believed that talking to people in small numbers, being open and honest about what we’re getting right or wrong is more effective than addressing thousands of people at a huge conference.
Management fashions change, however, there is increasing evidence that companies which manage stakeholder complexity well, perform well. Personally, I’d rather be involved with a company that’s trying to do all the right things by all its stakeholders rather than working with an organisation that is single-mindedly producing slightly better financial results. Financial results are one measure of success but they're not really a true, all-embracing measure.
How are you ensuring you leave a leadership legacy?
That's a very interesting question. I think it has quite a lot to do with people, because when you get to a senior role in an organisation, such as the Chair, you do have an enormous opportunity to influence things like the appointment of CEOs and CFOs. By ensuring you appoint people who have not only got the right skills and experience, but also the right values, you can have a much greater influence over the organisation. It’s one of the things I am very keen on.
I’m currently Chair of two public limited companies and the end of my term of office is within sight, because we now have this corporate governance nine-year rule, which stops Chairs clinging to their positions and going beyond their best before date!
I therefore know when I will step down from Tesco and Barratt, and part of what I want to try and leave behind, working with two very able Chief Executives, is to ensure that we actually get the very strongest possible, most diverse, most resilient management in place.
We look at who is coming through the organisation, to the next generation of leadership. Legacy is therefore a lot do with people but also having the right processes in place and really focussing on individuals and their needs.
We need to establish how people can be best equipped to take on more responsibilities going forward, and it's incumbent on the organisation to get this right. In my opinion, Tesco does that particularly well, and as a result we have a lot of diversity in senior roles.
I think we are particularly good with school leavers, and I am proud of the programme we’ve created called ‘Options’ for people who join us straight from school. Once they've got to know the business, they're able to do a variety of jobs and progress through to more senior operational roles.
Starting from age 16, straight from school, or entering as a graduate, the environment is very much a meritocracy, where if you have ambition and commitment you won’t really be constrained from progressing. I think that's actually where it should be.
What do you understand by moral authority and where do you get your moral authority from?
I haven't given deep thought to this before, but I think it's grown over time, not because of some sort of institutional association or because I’m involved in any organised religion or political party or anything else, but it stems from the way I was treated in the very first company I worked in – Unilever Plc.
As a management trainee I learned things on my first job that have stayed with me for life. The first is that how well you are supported in your early years of work, has an incredibly significant influence on your future. As a young employee you are like a sponge drawing on all the learning and experiences. Consequently, how you are treated by your boss or more senior leaders has a lasting impact.
Probably the biggest single influence that shaped my future in business came from those first three years of my career. I could have earned a bit more money elsewhere or had a bigger company car, but chose to stay for three years because of the phenomenal support from my boss.
I joined Unilever straight after university and then went on to work for a series of companies in different industries. I’ve been fortunate to have a very international career that’s been rich in diversity, not just in the narrow technical sense but also in terms of working with others who’ve held widely diverse views and opinions. It’s been a rich learning ground and helped me consider just how complicated this world is.
It’s truly surprising how many good things and good people there are all over the world, and how if you're prepared to look for the good in others, you’ll often find it. One of the reasons why I love living in London is because of diversity in its widest sense, and my wife and I have friends from all over the world. Boy, is it interesting to understand and share differences of opinion! It’s really shaped me over the years.
I grew up in a family where I was an only child. My parents had very modest financial means and were very decent people, and so I think the values my parents demonstrated influenced me significantly. This meant that early in my career I understood the value of getting something right or wrong, putting my hands up and admitting to errors.
Moral authority is important in the business world, absolutely, and actually in every sphere of life - whether in business, politics or whichever sector you’re in. I think if people don't believe that you're behaving in a way which is consistent with the way you profess to behave, or are asking others to behave, then you’re on a sticky wicket. I do believe as leaders we need to practise what we preach.
How are you seeding lasting impact in the lives of those who work for the organisations you are involved in?
I'm spending time talking to people who have been identified as having significant potential going forward and trying to encourage them to realise that potential. I would hope that doing so encourages them to aspire to more senior roles.
I think it's about leading by example again. If people see that organisations are really interested in them and their careers, and are helping them get on and encouraging them to make the best of themselves, they will more likely apply themselves.
I know one of my strongest internal drivers is the desire to learn more about things, so I’ve always preferred to do something I haven’t done before rather than do the same thing over and over again. As a result, I’ve got into lots of different industries. Four years ago I started an executive mentoring business with a really talented partner, Anna Joseph, who deserves most of the credit. We work with about a quarter of the FTSE 100 companies providing mentoring. Some clients have just been appointed as CEOs, some will become CHROs or CFOs, and others newly appointed Chairs. I also do quite a bit of mentoring of individuals, and two of the people I’ve mentored recently have been announced as the next CEOs of FTSE 100 firms.
The thrill for me is of actually supporting the leaders of tomorrow to step into their future roles and fulfil their potential. It’s something I enjoy very much as it effects change in the broadest sense in the business world.
John will be speaking about these themes in more detail at our next webinar, on Wednesday 26th October 2022. Windsor Leadership Alumni can book their place here.
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