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A new kind of capitalism needs a new generation of inspired–and inspiring–leaders

A powerful vision for how a company can benefit the world–and not just stockholders–can have amazing effects on employees’ sense of mission.

A new kind of capitalism needs a new generation of inspired–and inspiring–leaders
[Source Image: Dshnrgc/iStock]

Around 500 years in, capitalism is challenged. Undoubtedly the most powerful force to have shaped the world we live in, it is also the cause of an unprecedented climate crisis, extreme wealth inequality, and general discontent. Even the Economist, in a recent editorial, acknowledged, “The sense of a system rigged to benefit the owners of capital at the expense of workers is profound. In 2016 a survey found that more than half of young Americans no longer support capitalism. This loss of faith is dangerous, but is also warranted.”

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Yet too often companies still look for answers from the old sources that helped architect this state of affairs: business schools teaching late-20th century orthodoxy, shareholder value-oriented CEOs and boards, repressive pyramidal management structures, “master of the universe” consulting firms, ad agencies creating new veneers, and, lately, enterprise software designed to enhance efficiency. In an example of the old reflexes, the Economist’s answer to this generational challenge is: more competition. Given today’s extreme consolidation of power, that may not be wrong, but it misses the need for a new animating force. From our research and experience working inside both challenged and leading companies, the old answers miss one crucial source: the power of inspired leaders.

The characteristics celebrated in business leaders are most commonly the inputs of creativity and innovation, or the outputs of power and wealth. These celebrations provide guidance for people in business. And yet this guidance system has brought us to the current global crises (climate, inequality, distrust), and internal crises. Research my firm, Enso, a creative impact agency, has conducted revealed only 14% of Americans strongly agree that the values of their employer match their own, and Gallup recently found that 85% of workers are “disengaged” in their work. From a wealth-and-power leadership agenda, you get a downward spiral: disengaged teams and disaffected customers and stakeholders, leading to even greater internal challenges.

[Image: courtesy of the author]
By contrast, inspired leaders operate from an intrinsic motivation based on something they want to see in the world. When tapping into this authentic, inner motivation, leaders are naturally more decisive and persuasive. They often, although not always, operate from a positive intention for people or the world. Teams are emboldened and energized by a larger vision, which leads to clearer, bolder expressions of the company in the world and broader customer and stakeholder conviction–an upward spiral of engagement.

[Image: courtesy of the author]
Inspired leaders can create forward momentum for their organizations much more efficiently–in both societal and financial impact. These organizations contribute more to the world than they extract; we think of this as generative capitalism, distinct from the extractive capitalism that results from leaders with a wealth and power orientation. Generative capitalism contributes new value to the world; extractive capitalism reallocates existing value.

What do these inspired leaders look like? There are famous examples like Paul Polman, Unilever’s CEO and champion of the company’s Sustainable Living Plan–a combined business and social impact agenda. Or John Mackey, founder of Whole Foods, who saw his own inspiration echoed by customers, employees, and suppliers eight months after opening when they all collaborated to help the store reopen after a devastating flood. Or Rose Marcario, CEO of Patagonia, whose inspiration channeled through a meditation led to the company suing the federal government to preserve national lands. Marcario epitomizes what inspired leaders sound like: “My whole self is here. My values, my passion, my sense of urgency.” During her tenure, profits have tripled.

This month, Toms CEO, Blake Mycoskie, gave a vivid example of the speed and impact that inspired leaders can instill in their teams. After hearing about the Thousand Oaks mass shooting, Mycoskie resolved for Toms to do something; 12 days later he announced a new initiative with Jimmy Fallon on the Tonight Show: End Gun Violence Together. In those 12 days, his inspiration led to conviction from employees, investors, partners, and new nonprofit collaborators. It also led to 500,000 people joining the brand’s mission in the first five days.

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Inspired leaders can also bring purpose-oriented innovation to older companies. The ongoing rejuvenation of Barbie owes much to chief designer Kimberly Culmone, whose own inspiration enabled an inspired design team. Breaking decades-old patterns, that team changed Barbie’s body shape and skin tone, and the brand is now seeking to reduce the self-limiting beliefs that girls form around the age of 5 to 7 years, known as the “Dream Gap.” The reinvention of product and brand resulted in a feature documentary and a 14% year-over-year revenue increase.

Despite inspiration being an animating force of a generative form of capitalism, generations of business leaders have been equipped with analytical frameworks, employee evaluations, and competitor benchmarks, but limited guidance toward intrinsic inspiration. A Bain and Economist Intelligence Unit study found that less than half of employees find their manager inspiring or motivating, despite inspired employees being twice as productive. This year, we conducted research on how purpose-oriented (beyond self-enrichment) Americans perceive 100 top leaders of many kinds –political, faith, entertainment, sports, business. It was striking that Americans generally rank entertainment, faith, and political leaders significantly ahead of businesspeople. The No. 1 ranked leader was Bill Gates, but he’s more known for the Bill & Melinda Gates Foundation than his business work. After that, Elon Musk ranked No. 14, and only Warren Buffett, Mark Zuckerberg, and Richard Branson are in the top 50.

[Image: courtesy of the author]
One option to solve this challenge is for the world to give up on established leaders, and instead look for grassroots leaders. Another option is for leaders to learn from analytical research on the conditions and traits of inspiration (being an expert, goal setting, compelling oratory, etc.). In our experience, the answer is simpler, but not always easy. The most powerful form of inspiration is intrinsic. The most inspiring leaders have taken the time to find in themselves what animates them–rather than co-opting inspiration from others.

For John Mackey, this involves questioning: “We have to ask those questions–what do we care most about? What gets us excited? What are we passionate about? Those are windows into our soul –indications of what our higher purpose is.” For him, it was also an act of shedding: discarding all the things he did not enjoy or get energy from, in order to concentrate on what he did. This began at school, where he shed classes to focus on ones that energized him and continued in his business career; he created the conditions for continual inspiration.

When we embark on new initiatives at Enso, we ask leaders what vision of success they want to achieve, or coach them when they are struggling to identify it. When leaders can animatedly describe an ambitious vision of the world they want to see–of their personal mission–it energizes the room and is an important indicator of the potential success of a new initiative. Often these visions include a combination of business success and social impact, but what’s missing is the traditional language of combative, extractive business: competitor destruction, wealth, and power.

Inspiration leadership is not an end in itself; the inspiration needs to lead to tangible impact for its power to sustain and scale. Inspirational leadership can, and often does, lead to unfulfilled potential or a gap between rhetoric and action. But it is a critical first step at creating the conditions for impact, and an upward spiral of employee, customer, and stakeholder engagement.

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Unfortunately, many businesses crush inspiration by devaluing it and crowding it out with short-term goals, functional evaluations, and process-driven training and systems. The sickly state capitalism finds itself in is the result. Changing course requires a generation of leaders finding inspiration within–and finding the support and structures around them to thrive.

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About the author

Sebastian is the co-founder of enso.

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