by Barbara Stöttinger
Efficiency increase, profit maximization, and shareholder value – these foundations of modern business management intriguingly appear somewhat old-school. Entrepreneurs tend to focus more on long-term visions and corporate social responsibility. So what can managers and CEO’s in management-operated enterprises learn from entrepreneurs? The answer is: responsible leadership.
The Austrian enterprise Sonnentor is a beacon in the business world. Employing 320 staff members, the medium-sized company based in the Waldviertel region exports organic teas and herbs to 53 countries around the globe, generating annual revenues of about 45 million euros. CEO Johannes Gutmann, who knows every single one of his employees, pursues a management style oriented towards the common good. Fair payment, appreciation, and sustainable business practices instead of competitive zeal and profit maximization.
You might say this is easy because the company is reasonably sized and managed by one of its owners. It is not listed on any exchange, it is not held accountable by shareholders, and it does not have to worry about quarterly figures. But let’s not forget: Amazon, Microsoft, and H&M are successful listed groups which are still managed by their respective owners through voting rights – a key difference. After all, owner-operated businesses are overall more sustainable, pursue more long-term strategies, and actively protect corporate values instead of merely focusing on shareholder value.
Responsible and values-based management that considers the needs of employees, customers, and the environment and that is profit-oriented in order to secure the enterprise’s continued existence while simultaneously caring about its impact on society is no longer only expected from NPOs. The world has become a global village. The shareholder-oriented business world has been turning into a global stakeholder-oriented society that also encompasses customers, suppliers, raw materials producers, and the environment. Human rights as well as social and environmental aspects have to be considered in management decisions – not least because this is increasingly demanded by customers. In order to avoid negative boomerang effects for society, responsible decision-making and sustainable actions have to become main pillars of all business practices. After all, values-based enterprises such as Sonnentor are appreciated by their customers because of this very focus on values.
The transformation from profit-oriented to values-based is naturally anything but easy. It requires a comprehensive system change that does away with old structures: rigid hierarchies and management structures as well as incentives such as bonus payments for managers which reward short-term successes based on a small number of key figures. Also, cooperation styles have to change fundamentally, replacing competitive thinking with collaboration. Managers and CEO’s are re-redefining their roles: fewer and fewer of them are satisfied with quickly climbing the career ladder and acquiring status. Instead, they want their work to serve a greater purpose and be part of a positive change.
I interpret our responsibility as a business school against this backdrop: as values-based and responsible management has become indispensable for the business world of tomorrow, it is our job as executive education providers to equip our students with the tools essential for future leadership positions. After all, change starts with the individual. For this reason, our programs for executives at the WU Executive Academy are based on three pillars: profit, people, and planet. We support participants in utilizing the impact of their management style on society in the best-possible way: for the financial stability of their organization but also for employees, customers, and the environment. Together, we develop learning and career objectives that are perceived as meaningful and foster the students’ self-determination.
Our MBA programs include, for instance, Ethics & CSR modules, in which students reflect on social and ethical management and learn to check their personal values against those of their organization. We also apply the “Giving voice to values” approach developed by former Harvard professor Mary Gentile, through which students can practice to express their values also in a professional context. In the Leadership Lab, which was designed at our business school, participants reflect on learning contents and hone in on how their management style and career objectives can impact their personal lives, their organization, and society in a positive way. To this end, the great diversity of our student body is a great asset: people from more than 30 countries not only learn with but also from each other. This way, every individual develops a clear vision of the leadership of tomorrow over the course of time. And students also acquire a critical entrepreneurial spirit that helps them act in a self-determined way.
All of this contributes to fostering a personal mindset as a socially responsible manager and CEO among students – for a more sustainable business world of the future.
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