With the average tenure of a FTSE-100 company CEO at just five years, many business leaders struggle to leave a long-term legacy of sustainability
It can be a lonely place at the top, with CEOs under greater public scrutiny than at any other time in history.
What will I be remembered for? With political conference season in full swing, this is no doubt one of the big questions keeping party leaders across the political spectrum up at night. Each of the conferences has seen leaders set out their vision for the future and try to win the hearts and minds of the voting public by articulating the immediate change and lasting legacy they could bring to society if voted into government.
It struck me that the challenge facing party leaders is not dissimilar to those facing business leaders every day. Convincing employees and shareholders of both their compelling long term vision and the ability to meet immediate pressures.
As chief executive of Business in the Community I spend much of my time in conversation with leaders of some of our biggest and most influential companies, exploring the challenges they face.
It can be a lonely place at the top, with CEOs under greater public scrutiny than at any other time in history. They must grapple with the future direction and prosperity of their business, inspire confidence and lead by example. Yet they remain constrained by short term pressures (just three in 10 of the CEOs we surveyed think sufficient time is given to long term strategy).
Business leaders are at the heart of ensuring that sustainability is embedded within a company’s culture and throughout the organisation and that business plays its rightful role as a lasting force for change in society. However the average length of service of a chief executive in the FTSE-350 is a little more than six years, dropping to just five years for leaders of FTSE 100 firms. The truth is modern chief executives have a relatively short time to make an impact and create transformational change within a business. That is why considering a long-term legacy should be at the forefront of how modern business leaders operate.
Certainly if you speak candidly to chief executives who really understand the broader purpose of business, this idea of legacy is never far from mind. What difference are we making? What’s the long term value of my role? What unique contribution will we be remembered for?
Responsible business leaders are increasingly considering these questions, and how they can help their business fulfil its long term contract with society in a way that has lasting resonance beyond their relatively short tenure.
There are a number of business leaders who I think history will judge kindly because of the lasting impact they have made. Although no longer at the helm of M&S, Sir Stuart Rose will forever be remembered for his passionate and sometimes bullish determination to embed Plan A into the core of M&S operations. In doing so he not only turned around the fortunes of a much loved British brand, but also completely turned on its head how businesses consider corporate responsibility.
Sir Stuart RosePhotograph: Bloomberg/via Getty Images
Another example is Patrick Dempsey managing director of Whitbread who is building real momentum within the hospitality sector to collaboratively address youth unemployment. Patrick has spearheaded an initiative bringing hospitality employers face to face with unemployed young people – securing commitment to create 60,000 work and training opportunities for 16-24 year olds in the process. Crucially by bringing in other big businesses from across the sector he is ensuring that the programme has a sustainable legacy beyond his own personal passion and involvement.
Of course, it would be naive not to recognise that a crucial part of a CEOs legacy is the financial health of their business. Sir Ian Cheshire who recently announced he will be stepping down from Kingfisher is good example of a leader who maintained the short v long term balance. His seven year tenure not only left Kingfisher in robust health, but has also left a lasting sustainability legacy.
Ian CheshirePhotograph: Paul Hackett/Reuters
To create a lasting legacy, CEOs should be thinking about the day they will walk out of their offices for the last time right at the beginning of their role and use their very first 100 days to consider how they can create a legacy that outlives their role. They must prioritise their long term strategic vision and the practical steps they will take to achieve this in the short, medium and long term. Leaders must ask the right questions at board level and be brave enough to put long term thinking and legacy on the boardroom agenda – for example, the way in which Veolia’s executive vice president Estelle Brachlianoff has ensured that the circular economy, green products and services are absolutely central to the business strategy.
Integrating responsible practice into business strategy at senior level will ensure it becomes a shared vision that is broader than an individuals’ personal drive. Equally important is how leaders communicate this vision and the difference it will make for a broader group stakeholders.
Of course, the days of the all-knowing CEO are over. Responsible leadership is about more than the individual at the top, it is about embedding the right values and approach to business throughout the organisation. To leave a positive legacy, CEOs must also think about how they are equipping people at all levels within a business to carry the baton and act as advocates for a responsible approach to business.
Success as a leader has changed. Sustainability is a long game and it is those leaders who understand this whose businesses will be profitable, survive and thrive, while also having a positive impact on people and planet – and this is surely the ultimate legacy.
Stephen Howard is chief executive of Business in the Community