Conscious Business Practices for the Next Generation of Leaders
Businesses are facing unprecedented challenges. Global competition, financial crises, natural resource constraints and the need to engage customers and employees on a deeper level push leaders to reevaluate how they live and conduct business. If we continue to do business as usual, stress, burnout and lack of purpose and fulfillment will be the consequence.
“The problems companies are facing today are so diverse that it is impossible to single out a single issue that executives must master,” says Peter Matthies, Founder of the Conscious Business Institute. He works with organizations like BMW Group, Intel or Siemens to help executives stay ahead of the challenges in our world – both personally and professionally. His experience: it is necessary for any company leader – big or small – to step back and look at the global picture. “The changes in our world are hitting us with a number of challenges: globalization; the influence of the BRIC countries (Brazil, Russia, India and China); the energy crisis; the financial crisis; the increasing influence of governments,” he argues.
All of these problems are coming at companies en masse. The question is: how do we enable executives to handle these global challenges, as well as the immense pressure that result from these rapid changes? “Existing leadership styles – issuing directives, creating three-year plans and executing them, for example – don’t cut it anymore,” so Matthies. “If we continue to use the same methods and simply work harder, we’ll hit a wall. The world is changing too quickly. A new management style has to emerge, or companies will lose their competitive edge – and their people.”
Aligning with the Generational Shift in Purchasing Power
There’s a generational change taking place in which the purchasing power of the baby boomers (born between 1943 and 1960) passes over to generation X (born between 1960 to 1982) and generation Y (born after 1982). The consequence: considerably more consumers want to buy ethical products. Customers are increasingly demanding leaders who are able to inspire with a mission, and not leaders who only have the next quarterly report or maximizing profits in mind.
Customers want to establish an emotional connection to the company from which they are purchasing products. This behavior is not only valid for consumers, but also for employees who are less and less inclined to work for companies that don’t fulfill these criteria. People want to know and feel that a company has integrity, cares about its people and the environment, and doesn’t operate just to increase profits. “This company culture of integrity and care has to be believable; it can’t be just a branding or marketing trick. Therefore, for any company that wants to build on this new culture, the foundation has to be trust,” explains Matthies.
Trust: The Foundation of the New Economy
“I am often asked how to build trust in a team or an organization,” says Matthies. “There are of course programs that try to do exactly that, but I have found many of them – for example by offering 12 Steps You Need To Build Trust – adding even more work for leaders.” The only thing that truly builds trust, in his experience, is if people become authentic. “We build trust when we behave, act and speak in a way that is aligned with our thoughts, beliefs and feelings. And for this, we have to become conscious about what’s really going on inside of us.”
Thus his focus on building Conscious Businesses. “A conscious business is a company that is led by conscious leaders – people who are fully aware of their strengths and weaknesses and who know how each of their decisions and actions impacts not only the business culture, but also the outside world,” Matthies explains.
Changing to a New Business Paradigm
“I usually find three kinds of companies,” he explains. Those who actively initiate change, because they see the need for change; those who change because they just want to keep up with the times; and those who cling stubbornly to old policies and leadership approaches. This last group usually tries to address the global changes by exerting even more pressure on their people, often not realizing that their people are becoming really frustrated and overworked. It is impossible for any organization to go on like that for very much longer or they risk losing their best people.
“Stairs are best cleaned from the top! Similarly, the top leadership has to initiate the change to a new leadership paradigm.” This is not trivial, because the leaders at the top have often reached their position with a more command-and-control leadership style. So they rarely jump up and change the way they behave and lead – especially if their company has been successful with “the old way”.
“The key to this change are the 99% in any organization,” explains Matthies. “Although the change must at least obtain buy-in from the top, the middle management levels are often the drivers of this change.” Why? Because in the middle management and employee levels are where most of the dissatisfaction – and therefore the drive for change lies. “We work with hundreds of executives each year. Nearly every single one of the people we work with wants to shift to a different leadership model that allows for more care, authenticity and fulfillment.” The only thing that’s holding them back is the worry that they might lose their job or not perform well enough when challenging the status quo.
Fixing Our Broken Model of Success
“This brings us to a critical issue in the way we work and pursue success,” argues Matthies. “The model of success in our world has a fundamental flaw. What we have learned about success – get a good education, look for a high-paying job, build or buy yourself a big house, drive a fancy car, then at some point have a wife and children and you will be happy – rarely works. Just take a look around. How many of us who have lived according to these principles are actually happy and fulfilled? Maybe this model works for 5 – 10% of people. The other 90% of us struggle with money, time or with both. We are all searching for a deeper satisfaction that’s beyond material possessions, even if to the outside we still appear to be chasing career success.”
Matthies recommends that if we want real success in life – that’s not just money in the bank and a big house, but also the balance, fulfillment and deeper satisfaction we all desire – it is important to ask ourselves time and again: What exactly am I searching for? Do I still believe that once I have money in the bank, happiness will be waiting for me? “There has to be a shift to an “Essence-Based Success Model”, so Matthies. “It’s about becoming aware of the feeling states we are pursuing, and not about the things we think we have to own, or the status we have to achieve in order to ultimately feel that way.
Most of us long for joy, ease, creativity, freedom, satisfaction, etc., and think that we get that once we have money, a cool house or other material things. These “Essences” are ultimately our deeper values – it’s what gets us out of bed in the morning. “So, if you are missing fulfillment in your life: check how you get your Essences fulfilled. If you want to create more purpose and engagement in your company, ask how you can fulfill the Essences of your employees. That’s where our deeper passion and energy lies.”
Understanding What We Truly Value
Like people, companies also have “Essences” (the true values and drivers of their business). “Values and mission statements are often chiseled on a marble plaque, nailed up somewhere in the lobby without any life to it,” says Matthies. Few people really live according to these values. But what is it that inspires an entrepreneur or his/her staff? What drives them out of bed in the morning? It is the Essences – the values – a coupled with the mission of the business, that have to be aligned and lived on a daily basis.
“The model we convey to organizations is really quite simple,” explains Matthies. The leader needs a clear vision and direction, which he authentically communicates this to the team; this is the basis for inspiring and empowering the team. And finally – this is important – the leader needs to listen! She has to listen to feedback from her team so that the feedback loop is closed. If the leader doesn’t receive honest feedback, the entire leadership system collapses. The team either doesn’t trust the leader any more or they think he can’t do anything anymore, anyway.”
This leadership system is quite straightforward. It is based on trust, authentic behavior and what the Germans call “Wertschätzung”: a sincere appreciation of each individual. In this leadership system, first and foremost, the leader “serves” the team, not the customers, shareholders or his pocketbook. Only when employees really sense that their boss cares about them will they in turn care about the company and be emotionally invested in the common objective of the organization. And in order to really get involved emotionally, the team has to be able to truly and honestly trust their managers. Trust is the alpha and omega, the real capital of a business. And as mentioned before, the only way to build up long-term trust is authenticity. That’s why we call it “Authentic Leadership“.
Peter Matthies, founder of the Conscious Business Institute, helps executives of global organizations lead more humanely and efficiently – not only to master the global challenges, but to find satisfaction and a sense of purpose along the way.
Prior to founding the Conscious Business Institute, Peter was a Principal at Apax Partners & Co., one of the world’s largest Venture Capital and Private Equity firms with more than $20 billion under management.
The above article originally appeared as an interview with Peter Matthies conducted by Bettina M. Gordon and has been modified in its current form for Conscious Connection Magazine.