In a recent media feature I shared reasons and tips around the powerful role authentic leadership plays in businesses. Authenticity, perhaps once perceived somewhat risky, is a trait now respected and revered.
There are some cautions to be mindful of stepping comfortably into this space. There’s times leaders are privy to information they’re not at liberty to share. This doesn’t equate to a lack of authenticity provided any strategies or privileged information is dealt with respectfully, revealed appropriately and aren’t leveraged through blatantly selfish politics or lying. Perhaps it’s worth tackling the other side of the spectrum first!
What happens to value where authenticity is ill considered?
The story of Elizabeth Holmes is well known. The dropout who sold the dream of an ideological science in the form of the Edison blood-testing device; a cover/poster girl for many leading publications (Forbes, Fortune, INC); a red carpet raconteur for a TEDMED talk; garnered an enviable board (including Henry Kissinger, George Shultz, James Mattis); helped build the Theranos business to a valuation of circa $10 billion (2013/14); continued taking to stages, fending interviews, selling the dream, even after news surfaced the science behind the Edison was, at best, science fiction, at worst, all a sham scam.
That’s not to say the Holmes’s story started out as a deliberate dupe. No doubt the doe-eyed schoolgirl believed such a scientific breakthrough (based on a single pinprick of blood) was possible. To challenge established models is how we propel society forward. The problem, the lack of authenticity and its devastating impact on value, is choosing to continue down the path once it becomes clear any aspirations are more a complete pipe dream or when you begin blatantly lying in order to get ahead or benefit oneself.
Put aside the trust broken with over 800 employers, thousands of investors or the billions (fictitious perhaps) wiped in value, what about the risks Theranos customers faced placing trust in the devices or business model.
Considering value beyond shareholder or stocks
In 2019 a business roundtable of close to 200 CEO’s, including businesses Apple to Walmart, highlighted the importance of considering purpose and value beyond profit alone. An HBR feature sheds light on this stance, giving an updated perspective to a five-decade long idea that ‘the social responsibility of business is to increase profits’.
The collective of business leaders fleshed out and identified that ‘each of our stakeholders is essential’ and to commit delivering value to them all.’: five groups identified being shareholders, employees, customers, suppliers and communities’
We could even add to this that authentic leaders pondering value may consider business impact simultaneously through four well regarded aspects of sustainability: human (basic rights, health, education, fairness) social (cohesion, relationships, reciprocity, relationships), economic (living standards, ecological human, social risk mitigation, circular systems) and environmental (nature capital, ecological systems, natural resources, earth, land, water, climate change).
Authentically consider value for the five groups
Shareholders have often been the primary consideration. A focus on other groups doesn’t detract from this. The same HBR feature also highlighted ‘companies with higher levels of purpose engrained throughout the business outperformed the market by 5% – 7% on par with companies best in class governance and innovative capabilities.’
With regards to employees it’s simple things like considering modern day challenges: this may include two working parent families and work-life cohesion; inclusivity or other relevant topics such as paternity/maternity leave or, even more obvious yet often forgotten, continued investment into employee education, health and well being. Not only are they aligned with holistic sustainability they return massive dividends by way of discretionary effort.
The customer is often at the centre of the experience economy. Simplify dealings or transactions, listen to feedback and improve experiences at every touch point including unique ‘wow’ factor innovation. Yet it’s also about making tougher decisions easier for customers. Especially in relation to sustainability: make it a no brainer, or the only option, that transactions, sales of goods or service ensures a positive impact on all those sustainability pillars, especially environment!
Big businesses may be well placed to pull reigns on vendor negotiations yet do so with a win-win in mind. Nailing down best contract rates because you jeopardises future service standards or discretionary effort when it’s perhaps most needed. Authentic leaders appreciating value in supplier’s shoes also know what it means to pay your own bills on time or in a timely manner!
Community value is one we’re also hearing plenty about. We covered this in previous feature: how to add value to communities through philanthropy and social impact. Authentic leaders will continue to add value through grass roots causes or philanthropic ventures aligned with the vision, mission and values of their businesses.
Ultimately as more leaders embrace ethical authenticity along with all aspects of value we’re likely to hear less stories like the splattered hemoglobin (a perfect literal and metaphorical symbol) for how the absence of these things otherwise morphs into a bloody Theranos styled mess.
Written by Mark Carter.