“Lean on me.” Responsible leadership in the COVID crisis. Has anything changed?

10th February 2023

Authors: Professor Veronica Hope Hailey (University of Bath), Katie Jacobs (CIPD), & Joe Carter (Forward Institute)

This piece asks a simple question: has the impact of the COVID pandemic from 2020 – 2022 changed the nature of Responsible Leadership?

To answer it, we need to consider three things: how we describe what it takes to be a responsible leader; how leaders bring those ideas to life through practice and how they show up; the expectations of responsibility placed on leaders by their various stakeholders.

The why and what of responsible leadership

The idea of Responsible Leadership captured the imaginations of Western business leaders as a response to the public outrage over the global financial crisis. Although originating in the context of the private sector, many public sector organisations and third sector organisations now embrace it as an underpinning philosophy.

However, long before the financial crisis, NGOs, Institutes and academics had been promoting alternative ideas to the dominance of the late 20th century model of global capitalism’s prioritisation of “shareholder value” (Pingali, 2020).  For others, the interest in RL is not just a response to the financial crisis nor to a call for a rebalancing of capitalism, but in a pioneering light. Asking business leaders to embrace a broader remit of objectives beyond the financial helps with tackling complex global issues that require cross sector solutions (Pless, 2007; Maak and Pless, 2009;).

Much has been written over the last 30 years about what constitutes RL. A literature review uncovers these main characteristics (Maak and PLess, 2006; 2009):

Responsible leadership:

  • Considers the views of a wide range of internal and external stakeholders, not just shareholders
  • Is values based and driven by purpose
  • Has a desire to create positive, sustained social impact for the long term (Waldman and Galvin, 2008)
  • Is based on cultivating and sustaining inclusive and caring relationships with stakeholders
  • Is a moral and ethical phenomenon (Pless, 2007; Wuffli, 2021).

How to be a responsible leader?

So how to bring this to life through practice? We can break it down into three tiers:

  1. The individual: The importance of character attributes, and their development, in shaping Responsible Leaders (Pless, 2007).
  2. The organisational: How leaders role model ethical and values-based leadership, not just through their own moral code or sense of integrity but in terms of the organisation’s purpose. How do they communicate, inculcate and galvanise the whole organisation to ensure that an ethical approach permeates throughout the value chain?
  3. The societal: The role and engagement of Responsible Leaders as global citizens with the power to influence complex geo- and socio-political issues. They must also develop competencies around the management of relationships with internal and external stakeholders (Lamsa and Keranen, 2020.)

This last point in particular is challenging for many leaders to fulfil, given the level of relational skills but also knowledge required. The sheer range of different stakeholders – communities, government, employees, customers, shareholders, NGOs, and so on - makes it a daunting task for the average CEO. It calls for a broad knowledge base ranging from local economic development policy through to the UN’s SDGs, as well as the ability to flex interpersonal styles as needed.

The lofty aim of meeting the needs of all these different stakeholders obscures the inherent tensions that exist within Responsible Leadership. How, for instance, to maintain the status quo of espoused Purpose and Values whilst, at the same time, being a change agent and seeking disruption and movement (Maak and Pless, 2006)? Can the needs of all stakeholder groups be equally met or, as in shareholder capitalism, must one inevitably be prioritised against another at certain times? To be a sustainable business necessitates sometimes the cessation of sustainable employment for a few. These are often conveniently by-passed in the invocation of RL as the new and improved form of leadership.

How the pandemic tested responsible leadership

The CIPD has explored in detail how leaders were tested by the coronavirus pandemic in 2020 and 2021 (Hope Hailey and Jacobs, 2020; Hope Hailey and Brown, 2021). We are in the process of repeating the data collection this year which will mean we will have conducted over 130 interviews of senior leaders and held 14 roundtables over that time.

In 2020, at the start of the pandemic, we found leaders having to work at pace, without data or previous experience to draw on, balancing the safety of frontline workers with the need to enable swathes of the UK workforce to work from home and connecting with communities to keep society functioning as best it could.

Responsible Leaders relied on their own sense of personal integrity and their organisation’s purpose and values which acted as north stars to guide them through the fast decision making, they faced. They learned how to be visibly more empathetic and humble in their leadership approach, decentralising and delegating. Technological innovation and magnified visibility liberated many leaders into unscripted, more authentic communication and made them more accessible. They were also exposed, if they weren’t already aware, to the social problems faced by their workforces (such as domestic abuse, food poverty, single parenting, or burdensome caring responsibilities), and social justice issues such as Black Lives Matter.

By the middle of 2021 the context had changed. While the uncertainty continued, fractures, differences and divisions within society resurfaced. The brief sense of national unity and trust that had been fostered and enjoyed during the first few months of the pandemic started to decline, as the varied experience of COVID – across sectors, generations, geographies and socio-economic groups – became painfully clear.

As England began to open up, many employers were facing major labour shortages, the threat of increasing industrial action, troubles with supply chains and questions over the suitability of long-term hybrid working (something that isn’t even an option for more than half the UK population). The so-called Great Resignation brought home the fact the many were questioning the role that work should play in their lives.

What was the responsible leaders' response?

Leaders reflected that purpose and values became “tested to destruction” (HRD). Another CEO said of purpose “It became even more important and actually helped simplify decisions”, another that “Values were the thing that held people together.”

In 2021, when asked about specific RL issues, leaders highlighted their ambitions for sustainability, mental health and well-being, diversity and inclusion and community and levelling up. However the response to community and broader national or local economic or social agendas had changed. The need to keep the business afloat as lockdown was gradually released meant that internal “responsible” issues still received attention but engagement with the community beyond the organisation’s boundary were not as overt in many organisations.

Beyond specific issues and initiatives there was some evidence of Responsible Leadership being held more to account, not just at senior levels but also at other leadership levels within the organisation. As the HRD at Nationwide put it: “We are good at intent, but do we measure it – do we really hold people to account as a leader?”

Three levels of responsible leadership

  • Individual: The personal integrity of leaders was a critical factor during COVID, with leaders under intense pressure. Many talked about needing to fall back onto their personal sense of right and wrong. They spoke of a newfound humility, born out of not knowing the answers to problems and having to learn to listen intently to others.
  • This was both surprising and reassuring. In the wake of the financial crisis many commentators argued that we had developed the wrong type of leaders, devoid of integrity and a moral code. During the pandemic, the leaders we worked with revealed their integrity, what character scholars call “true grit”.
  • Organisational: In terms of role modelling a response, many felt liberated both (partly due to a reduction in travel time). People also spoke of “taking off their armour”, implying that pre-COVID they were operating in an organisational system that stifled their personal sense of right and wrong.
  • Societal: These leaders were heavily engaged with health services and government, trying to ascertain what their organisations could do to help society. We speculate they found moral support from other leaders beyond their own organisation. Communicating far more with the outside world, albeit virtually, they were in the company of like-minded leaders, sharing a common purpose and responsibility to help the community around them. That gave them a sense of collective courage. However, in 2021 the intense communication with external stakeholders and peers seemed to be decreasing as leaders turned their attention inwards.

What’s the evidence for a changed approach to responsible leadership during COVID?

Many of the central tenets of Responsible Leadership identified pre-pandemic held true:

  • Consideration of a wide range of stakeholder needs: Very evident in the first year of COVID.
  • Is Values based and Purpose Driven: Purpose and Values came to the fore as guiding principles for decision making in uncharted territory.
  • Aims to create sustained social impact: We detected a genuine commitment, though variable by sector, to tackling diversity and inclusion on a sustained basis because of BLM and a short-term commitment to mental health and well-being as a response to the aftershocks of the pandemic.
  • Sustained, inclusive and caring relationships with a wide range of stakeholders: Good intent on the part of leaders but tensions became increasingly apparent. Whose needs triumph – the customer or the employee? The family or the colleague? The shareholder or the frontline worker?

The weight of responsibility?

What seems to have the potential to make the most change in what it takes to be a Responsible Leader is the way that the COVID pandemic has changed the expectations of our various stakeholders. These include:

  • Impatience about the pace and depth of change in areas of sustainability and diversity and inclusion; through COVID people have seen the extent of transformational change that can be achieved when necessary and are now questioning why the same pressure cannot be applied to other areas.
  • The call for greater justice and fairness, amplified through the discontent over post COVID pay rewards for frontline workers, and, in contrast, the individualised deals being done to retain talent.
  • A glimpse of a less hierarchical form of organisation, a humbler approach to leadership, more visibility and accessibility to senior teams. Leaders have shown themselves capable of making themselves both more empathetic and accessible when necessary.
  • A belief and evidence that business and the public sector can change fast and be run in a more collaborative way through horizontal partnerships when the situation demands it, and the level of routine monitoring is reduced.
  • Senior leaders have been exposed to serious social justice issues including inequality, exclusion, poverty, levels of domestic abuse, the vulnerable. They cannot now pretend they are unaware that we live in a deeply divided society. There is a need to start to systematically measure the S in “ESG.
  • Mindsets and assumptions about working lives, personal priorities and family life were disrupted by lockdowns, blurring boundaries between the personal and the professional. Many are now re-emerging with changed life goals. The psychological contract has been reset.

Going forwards – the expectations and tensions within responsible leadership

Many senior leaders impressed through their acceptance and execution of broad societal and organisational responsibilities during COVID. They displayed a more empowered and empathetic leadership which enabled them to deliver on those responsibilities. This has raised stakeholder expectations of what these individuals can deliver on an ongoing basis.

There is every reason to believe that the leadership lessons from COVID need to be applied into our present and future challenges. The war in Ukraine has created a situation which one CEO described as meaning “Uncertainty is the new norm”. There is a need for responsible leadership to support fairness and justice, and mitigate public fear, on geo-political levels as well as addressing the social and economic fallout of a cost-of-living crisis.

Yet, despite the triumph of good stewardship during the pandemic, and despite the expanding list of “responsibilities” that leaders now address, there are signs that many are “returning to normal”. Reporting on DAVOS 2022, the journalist Rana Foroohar reported that she came away feeling that the 0.1% was more out of touch with the state of the world than ever, concluding: “If the rich don’t give a bit more today, they may have to give a lot more tomorrow.” (FT May 30, 2022).

As for levelling up income levels, the FT on the same day reported- “UK CEO pay recovers pre-COVID levels” and with executive wages increasing as many workers face a cost of living crisis. It reports that Deloitte has found that the median employee to FTSE 100 CEO pay ratio was 1:81, compared with 1:59 in 2020 and 1:75 in 2019.
 

Maybe gold-plated responsible leadership was just for COVID after all?

 

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