Why We Desperately Need Human-Centred Leaders

Sales Trend 9 of the Barrett 12 Sales Trends Report for 2023 is about the rise of human-centred leadership principles and practices.

By guest author DUANE ATTREE // former Managing Director of POTENTIAL(X), Chief Commercial & Development Officer, BEAMTREE and now EXPLORER AT LARGE, in collaboration with Sue Barrett.

In 30 seconds

Leadership in the past 50-70 years emphasised charisma, strength, and wealth, but this model faces challenges. Current global issues, stagnating productivity, and employee disengagement demand a shift towards human-centred leadership. This approach prioritises people, empathy, and inclusivity, extending beyond technical skills. Empathy, particularly, is crucial for understanding others’ emotions and reducing biases. When it comes to human-centred sales leadership, creating inclusive, respectful, gender diverse teams leads to higher win ratios and greater diversity of client groups which, in turn, helps attract and retain more clients to our businesses.

Embracing human-centred leadership is becoming essential for businesses to thrive in today’s world.

In 2 minutes

Over the past few decades, leadership has been characterised by traits such as charisma, strength, vision, and wealth. The rise of global communication and technology has given birth to the ‘celebrity CEO,’ individuals celebrated for their financial success, often measured in terms of profit, shareholder returns, exponential growth, and publicity.

Despite the extensive literature and courses on emulating these famous leaders, this era of leadership is imperfect, with questionable long-term outcomes. The world currently faces significant challenges, including pre-existing issues that have gained prominence in the wake of COVID-19, geopolitical conflicts, and economic shifts. These challenges encompass various aspects, from work locations to personal experiences of change and loss.

Several data points highlight the challenges faced by leaders today:

• The average lifespan of a company on the S&P 500 has dramatically decreased over the years
• 76% of Australians have left organisations due to issues related to leadership teams or managers
• Productivity growth has declined
• Pay disparity between men and women remains an immoral ~31% [ZZ]

The concept of ‘The Great Resignation’ reflects these challenges, with employee engagement stagnating for over two decades. Recent Gallup studies indicate that only 21% of employees are engaged at work, costing the global economy approximately USD 7.8 trillion.

In response to these challenges, a shift towards human-centred leadership principles and practices is emerging. Human-centred performance prioritises people and culture. This approach acknowledges that leadership extends beyond technical skills and encompasses emotional intelligence, effective communication, empathy, ethics, inclusivity, and collaboration.

Human-centred organisations and running sustainable businesses involve stewardship (of systems), leadership (of people), management (of processes) and curation (of culture) if we want to lead better businesses for a sustainable world.

So, what are the practices and processes that can underpin a human-centred leadership approach?

• Leaders must be authentic and empathetic
• Leaders create clarity, vision and purpose
• Leaders generate energy with passion and care
• Leaders strive for success in spite of challenges.

In sales cultures, this approach leads to higher win ratios and greater diversity, attracting and retaining more clients. Female sales leaders, in particular, tend to foster human-centred cultures.

In conclusion, embracing human-centred leadership is becoming essential for businesses. It involves a fundamental shift in the way organisations operate, emphasising the well-being and potential of individuals, ultimately leading to better business outcomes.

In 9 minutes

When we reflect on the last 50-70 years of economic, societal, and business progress, the leadership characteristics that have featured most prominently are: “charismatic” or “strong”, “gets results” or “visionary”, and of course “billionaire”.

During this era, we saw the rise of ‘celebrity’, fuelled largely by globalisation and technology’s ability to break down communication barriers. As a result, the ‘celebrity CEO’ emerged. Their names have become synonymous with ‘great business leadership’, feted for their versions of success, largely measured by metrics for exponential growth, profit, shareholder return, publicity, or pay packets[1].

Many books have been written, articles published, TV shows created, and university courses delivered on how to model these ‘famous leaders’, however, this period of leadership is full of imperfections, not the least due to the questionable long-term value of its outcomes.

We are at one of the most consequential moments in human civilisation. Ever.

We have a myriad of challenges, many of which predate Covid-19, but that have become more acutely recognised since. We are also facing geopolitical conflict across many fronts and far-reaching economic shifts leading to potential downturns in most sectors. Much of these impacts will reverberate into the future, with many layers and interconnections. From practical factors, like the physical location of ‘work’ or supply chain stability, to the range of implications that arise – at a magnitude never seen before – from ~3 years of personal and unique lived experiences of change, grief, or loss.

There are any number of data points that evidence these challenges for leaders charged with building resilient and healthy teams and businesses:

• In 1964, a company on the S&P 500 had an average life expectancy of 33 years. This number was reduced to 24 years in 2016 and is forecast to shrink further to 12 years by 2027 [XX].
• 76% of Australians have left at least one of their last three organisations because of the leadership team, their direct manager, or a combination of both [YY]
• Productivity growth over the past decade is now at its lowest rate in half a century and pay disparity between men and women remains an immoral ~31% [ZZ].

Within this current state are a range of measures that make up the recent narrative of ‘The Great Resignation’. While the headline might be new, and despite positive case studies, in general, employee engagement with their work and employer has not changed for over two decades.
According to recent Gallup [BB] studies, a bare 21% of employees are engaged at work, with employee disengagement costing ~11% of global GDP (USD 7.8 trillion).

Think about what this likely means for your business. The vast majority of your people are doing work because of a sense that they ‘have to’, not because they’re inspired or ‘want to’. At best this is an untapped capacity and an avoidable opportunity cost to your people and your productivity.

Furthermore, leaders will also have to come to terms with addressing deep future challenges such as the adjustment to the ‘new normal’; the impacts of our changing climate; the re-organising of the principles and systems of civil society; the role of Government and institutions; and the adoption of modern technology innovation.

If the prevailing ‘leadership’ paradigms of the last 40-50 years are no longer fit for purpose and have not improved the future for employees, suppliers, customers, communities, and the planet – what’s the alternative?

Sales Trend 9 is about the rise of human-centred leadership principles and practices.

Human-centred performance is described by the Human Capital Leadership Institute [CC] as where organisations and leaders: “…prioritise their people and culture…. It is about a genuine intention to contribute to the well-being of others and to see them thrive. This can sometimes require giving honest feedback, but most of the time, it is about seeing how we can each help add to the happiness of others.”

Human-centred organisations and running sustainable businesses involve stewardship (of systems), leadership (of people), management (of processes) and curation (of culture) if we want to lead better businesses for a sustainable world[2].

Increasingly we are seeing the narrative and development of leadership skills moving beyond ‘hard’ (technical, academic, process or method) to incorporate ‘soft’ (EQ, effective and respectful communication, empathy, wellbeing, ethics, inclusivity, collaboration, etc). There is an increasing body of evidence highlighting that leadership in a complex, dynamic, VUCA (volatile, uncertain, complex, ambiguity) environment requires a layered and cyclical development of skills, systems, and relationships in order to maximise leadership capacity and team performance.

One of the most critical competencies for human-centred leaders is empathy, expressed by Helen Riess, an Associate Professor of Psychology at Harvard Medical School as: “a complex capability enabling individuals to understand and feel the emotional states of others, resulting in compassionate behaviour. Empathy requires cognitive, emotional, behavioural, and moral capacities to understand and respond to the suffering of others” [AA].

The capacity for empathy resides in the pre-frontal cortex of our brains and needs to be ‘exercised’ if we are to be empathic. Some people are more naturally empathic than others, however, most of us can develop our capacity for empathy by staying connected to the real world, engaging with people on the ground and ensuring we practise skills such as listening and reflecting. By practising empathic skills and the associated behaviours of compassion, respect and kindness, leaders are better able to engage, understand different perspectives, and overcome various biases in their experience or thinking. In many ways, these skills and behaviours are already in practice in many businesses, for example in exemplars of ‘felt leadership’ in health & safety settings and ‘servant leadership’ – a philosophy built on the belief that the most effective leaders strive to serve others, rather than accrue power or take control.

So, what are the practices and processes that can underpin a human-centred leadership approach?

Of the current crop of celebrity CEOs, an exemplar of a human-centred leadership approach is Microsoft’s Satya Nadella. His leadership philosophy and principles are characterised by human-centred tenets like:

• Leaders must be authentic[3] and empathetic
• Leaders create clarity, vision and purpose
• Leaders generate energy with passion and care
• Leaders strive for success in spite of challenges.

And the results speak for themselves. In the 8 years since Nadella’s appointment, Microsoft’s share price has increased 650%, is the second most valuable company globally, 95% of employees say they feel proud to work at the company, representation of diverse employees and leaders at the company has grown for six consecutive years, and gender and diversity pay gaps are some of the lowest in corporate America.

By no means is Microsoft perfect, but at such a scale, its leaders are clearly on to something. IBM research indicates that human-centred led and design focused organisations deliver:

• 32% higher revenue than traditional organisations
• 2 x faster to deliver to market
• 211% better than the S&P 500.

In the context of leading organisations and sales teams with a human-centred approach, leaders are encouraged to start with both introspective and practical tactics. The following strategies are now being applied in human-centred, high-performance ventures:

1. Realise it is NOT about you

Traditionally it’s been about THE leader… the star celebrity, their abilities (or lack), heroics and inspiration (or not). Frei and Morris neatly envision this as moving from the star of the show to the director or conductor, coordinating the talents and future potential of the cast towards Oscar winning performances.

In addition, human-centred leaders commit to creating a culture where every person can bring initiative, imagination, and passion to work.

These leaders are important role models, making it safe – psychologically and physically, and acceptable to be authentic and legitimate.

2. Make thinking, collaboration, and decision making inclusive

All businesses work on systems of collaboration and communication from meetings, huddles, stand-ups or collaborative discussions. The majority of these forums’ content is often dominated by the input from extroverted, confident participants – the nominated leaders or technical experts.

Human-centred leaders consider the involvement and value that all participants can provide. The role of leaders in these forums is to set the vision and tone, facilitating and coaching teams for ideas, insights and improvements guiding the collective towards the goal rather than being the chair, authority, and delegator.

3. Establish human-centred expectations

Human-centred leaders realise that supporting their people and nurturing a healthy culture and community isn’t a distraction from business goals–in fact, it’s deeply strategic and leads to better business outcomes. Having a clear vision and expectations for human-centredness in your organisation is paramount.

In sales cultures specifically, there’s a definite shift away from the highly competitive, high pressure, individualistic focus on achieving sales results to more collaborative, strategic, human-centred, team-based sales cultures.

When it comes to human-centred sales leadership, creating inclusive, respectful, gender diverse teams leads to higher win ratios and greater diversity of client groups which, in turn, helps attract and retain more clients to our businesses.

Sales leaders’ gender is also a predictor of sales team Organisational Citizenship Behaviour (OCB). Research[4] shows that sales teams led by female managers display significantly higher levels of civic virtue, sportsmanship, altruism, courtesy, cheerleading, peacemaking, and overall citizenship. All characteristics of human-centred cultures. See Sales Trend 3 for more on this topic.

Becoming a human-centred organisation is now a business necessity and it’s more than just a change in ways of working, skills, or infrastructure – it’s a change to the reason we come to work.

You can download the Barrett 12 Sales Trends for 2023 – Humans at the Centre here.

Related topics

12 Sales trends for 2023 – Humans at the Centre

25 Years of Sales Leadership Evolution

A Sales Career is Brilliant for Women

A Year Ago

Sales Skills Future-proof Careers and Margins

Three Years Ago

Why a Sales Career is Brilliant for Women’s Health and Well-being

Ten Years Ago

Writing, Brain Research and Being a Better Salesperson

 

References

[1] Economic Policy Institute in 2021 reported that CEO salaries have skyrocketed by 1,322% since 1978. CEOs were paid 351 times as much as a typical worker in 2020.

[2] “We need to be more than leaders. We must evolve to become Stewards of Systems, Leaders of People, Managers of Process and Cultivators of Culture to create better businesses, communities, and societies for a sustainable world.” Sue Barrett 2021

[3] “a pattern of leader behavior that draws upon and promotes both positive psychological capacities and a positive ethical climate, to foster greater self-awareness, an internalized moral perspective, balanced processing of information, and relational transparency on the part of leaders working with followers, fostering positive self-development”. Authentic Leadership: Development and Validation of a Theory-Based Measure, cited under Empirical Research: Quantitative Research: Measurement, p. 94.

[4] Piercy, Lane, and Cravens 2002

Sources and further insights

[XX] Why Organizations Need Human-Centered Leaders, And Three Tips To Get Started (forbes.com)

[YY] Faculty of Leadership and Strategy – Courses & Training – AIM

[ZZ] Jobs and Skills Summit Issues Paper (treasury.gov.au)

[AA] The Science of Empathy – PMC (nih.gov)

[BB] The World’s $7.8 Trillion Workplace Problem (gallup.com)

[CC] What is Human-Centred Leadership? | HCLI

Benefits of Human Centred Leadership | The Leadership Sphere

joshbersin.com

What is Human-Centred Leadership? | HCLI

Human-Centered Approach To Business | Accenture

Felt Leadership – An Overview – Felt Leadership (wordpress.com)

Human Resources Must Change Radically to Deliver for the Digital World | World Economic Forum (weforum.org)

Human-Centric Selling as a Competitive Edge | Deloitte | Technology Complexity (lecticalive.org)

Human-centered organizations: why and how to build them (ibm.com)

Watch ‘Bloomberg Technology’ Full Show (09/22/2022) – Bloomberg

Microsoft CEO Satya Nadella Warns of the Impact of All Those Late-Night Emails – Bloomberg

An Antidote to Corruption: Human-centred Business & Sales – Barrett

https://www.businessinsider.com/microsoft-ceo-satya-nadella-leadership-principles-2019-12

Microsoft: When Who’s The CEO Matters (NASDAQ:MSFT) | Seeking Alpha

Report card: Microsoft’s board boosts CEO Satya Nadella’s annual compensation to nearly $50M – GeekWire

Microsoft’s Company Culture, Scored on 18 Different Metrics | Comparably

Was GE CEO Jack Welch bad for business? : NPR

How the HR Executive of the Year rebooted Microsoft’s culture – HR Executive

Microsoft (MSFT) Pay Data Report Shows Racial Gaps in Top Jobs – Bloomberg

Microsoft CEO Satya Nadella on the importance of diversity – YouTube

Human-centered organizations: why and how to build them (ibm.com)

Unleashed, The Unapologetic Leader’s Guide to Empowering Everyone

Around You. Frances Frei and Anne Morriss, Harvard Business Review Press, 2020.

Beyond Entrepreneurialism 2.0. Jim Collins and Bill Lazier. Random House Business. 2020.