Publication Date

2011

Abstract

The purpose of this paper is to present an alternative leadership model to the prevailing shareholder-first approach that research, management experts and practice indicate can lead to higher performance and resilience of a firm. This conceptual paper is based on published literature, empirical research, and observations conducted in firms worldwide. Avery and Bergsteiner's 23 principles differentiate sustainable or “honeybee” practices from shareholder-first or “locust” leadership. Sustainable practices are arranged in a pyramid with three levels of practices and five performance outcomes at the apex. A total of 14 foundation practices can be introduced immediately. At the next level in the pyramid, six higher-level practices emerge once the foundations are in place. Finally, three practices cover the key performance drivers of innovation, quality, and staff engagement – all of which end customers' experience. Together the 23 practices influence five outcomes, namely brand and reputation, customer satisfaction, operational finances, long-term shareholder value, and long-term value for multiple stakeholders. Given that research and practice show that operating on sustainable principles enhances business performance and resilience, executives are urged to adopt these practices over business-as-usual. If self-interest does not motivate this change, as it appears to have already done at Wal-Mart, then major stakeholders or legislators can be expected to force such changes in the future. This paper provides an answer to the question of whether there is there an alternative to the shareholder-first leadership model. Its response is: yes, a demonstrably effective alternative already operates among many successful enterprises around the world.

The purpose of this paper is to present an alternative leadership model to the prevailing shareholder-first approach that research, management experts and practice indicate can lead to higher performance and resilience of a firm. This conceptual paper is based on published literature, empirical research, and observations conducted in firms worldwide. Avery and Bergsteiner's 23 principles differentiate sustainable or “honeybee” practices from shareholder-first or “locust” leadership. Sustainable practices are arranged in a pyramid with three levels of practices and five performanceoutcomes at the apex. A total of 14 foundation practices can be introduced immediately. At the next level in the pyramid, six higher-level practices emerge once the foundations are in place. Finally, three practices cover the key performance drivers of innovation, quality, and staff engagement – all of which end customers' experience. Together the 23 practices influence five outcomes, namely brand andreputation, customer satisfaction, operational finances, long-term shareholder value, and long-term value for multiple stakeholders. Given that research and practice show that operating on sustainableprinciples enhances business performance and resilience, executives are urged to adopt these practices over business-as-usual. If self-interest does not motivate this change, as it appears to have already done at Wal-Mart, then major stakeholders or legislators can be expected to force such changes in the future. This paper provides an answer to the question of whether there is there an alternative to the shareholder-first leadership model. Its response is: yes, a demonstrably effective alternative already operates among many successful enterprises around the world.

Document Type

Journal Article

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