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How to Foster Corporate Altruism: Focus on Leaders First
How do leaders create a culture that features contagious corporate altruism?
Historically, shareholder capital return has been the holy grail of business success. Significant returns signal investors that the company believes in their future so much they can afford to buy back stocks and pay higher dividends, directly providing a return on investment. However, the rise of the social enterprise means changing expectations for what companies do with their profits.
In today’s business world, shouldn’t stakeholders (i.e., managers, employees) also reap what they sow?
Corporate Altruism: Demanded by the Market
Luckily, shareholder return and stakeholder return are no longer a zero-sum game. Institutional activism has made it impossible for big companies to hide from the social and environmental impacts of their business decisions, demanding transparency – at a minimum. Strategic companies are taking this a step further.
Companies that are keen to step up to rising expectations are actively looking for opportunities to take responsibility. And rightfully so: altruistic investments in their employer value, social justice movements, and environmental impact moves market price and boosts employee productivity. For example, the “Triple Bottom Line” equally prioritizes people, planet, and profit from an accounting perspective.
The case is clear: both the market and investors reward activities that improve the lives of employees, customers, and citizens. Why? Because it signals adaptable leaders who are responsive to the demands of the workforce. It is also a sign that our cultural values are also shifting.
Is it possible that the “good guys” don’t finish last?
Changing Expectations of Leaders
While this change is both rapid and significant, it is also true that we have grown accustomed to powerful leaders often being some of the least altruistic individuals we know. For example, historically, Machiavellian personality traits (e.g., manipulation) often still predict leadership effectiveness. Plus, according to the Paradox of Power, the skills that help us achieve positions of power and influence (i.e., humility and compassion) are the very skills that deteriorate once we get there – even if they’re the skills leaders need to leverage now more than ever.
Why does this matter?
Well, leaders are the “linking pins” of the employees to their perceptions of the organization. If you want to build altruism into your organization, it starts with leaders. They also happen to be one of the most significant predictors of employees’ turnover intentions and trust in the company. As the saying goes: “People don’t quit bad jobs; they quit bad bosses.” Correct: this isn’t the universal driver behind every departure. But if you have leaders with the “old guard” mentality who depend on dominance and coercion? It’s safe to say your employer brand – and consequentially market value – are at risk.
Contagious Altruism: Foster Trust and Purpose
If a company was not built from the ground up with their employer brand in mind, investing in their stakeholders can feel check-the-box-ish. The worst-case scenario (and we have all seen it before) is when an organization launches a new set of values and are caught in contradiction when their leaders are not living proof. Indeed, the individuals who receive the most scrutiny (leaders and managers) also have the carrots and sticks to incentivize and reinforce change.
While there are many ways to continue building altruism into a shareholder-centric strategy, focusing on your leaders is one of the most worthwhile routes to change. Want to see results in both stakeholder buy-in and the bottom line?
Prioritize these four leadership behaviors:
Defining How the Business Has a Greater Purpose
One of the biggest predictors of employee satisfaction and engagement is the sense that their work is creating a positive impact. Leaders should have a strong elevator pitch about how the business emerges above and beyond the work itself. They must demonstrate how the company impacts the world in a responsible and meaningful way.
Empowering Team Members
According to Deloitte’s 2021 Human Capital Trends report, a decentralized workforce spreads ownership and engages employees in creativity and mastery of their craft. Leaders now more than ever must continue to focus on the division of labor and delegation. What can each of your team members do better than anyone else on the team? How can you leverage those strengths to improve employee empowerment?
Creating Choice in What and How Employees Contribute
The very same task can indeed be more effortful or more motivating, based on who is doing it. As you set the tone for corporate altruism, ask your team members what they enjoy doing and why. Then allocate responsibilities and opportunities accordingly.
Create a Superordinate Group Identity – A Sub-Culture
It can be challenging to unite your teams when distinctive subgroup identities exist and are conflicting (especially with the divisive political climate at play). So leaders must be explicit when defining a group identity that rises above individual differences.
There are many models for what it takes to be someone’s best boss. The overarching goal?
Ensure your organization sets the expectation that they become a social enterprise. Because two historically competing priorities – upholding employer brand and market value – are now the joint cost of admission to a future driven by contagious corporate altruism.