What is value creating leadership & why do you need to get started with it?

What is value creating leadership & why do you need to get started with it?

Investments in the arms industry by a pension fund; a Chinese supplier who supplies components for your end product; the expansion plans of Schiphol Airport. At first glance, these issues have little to do with each other. But if you look closely, you’ll see that all three are challenges for today’s leader. It must balance the various interests and create value on several levels. Continuously. We call this value-creating leadership. What this term exactly means and why it is good to get into it as a modern leader, I tell you in this blog.

Creating value in a small world

Thanks to the digital infrastructure and the growing influence of social media, the world has become smaller and the market more dynamic. If a German competitor brings a new, cheaper version of your product onto the market, you as a Dutch manufacturer know this almost immediately and you have to take action immediately. The developments in Europe can just about be kept up, but what happens in Asia, Africa and America? Do you go along with all the developments in the world? And what do you choose as an organisation? For the cheapest parts from, say, a Chinese supplier who pays less attention to the ecological and social consequences of the production process? Or do you look at other results besides turnover? In other words: what does your organisation actually value?

Answering the above questions is not easy, because although the world is changing, our brain is still the same and that makes switching and “running harder” difficult. It is precisely for this reason that the modern leader is so desperately needed. Such a leader is able to make quick decisions that are economically, socially and environmentally justifiable and thus create value on multiple levels. Someone who tackles today’s challenges carefully and quickly.

When economic and social interests collide

An increasing part of Dutch society makes itself heard. They do not want their pension money invested in weapons, tobacco, deforestation or fossil fuels, they demand green electricity and fairly produced clothing and food. In this case, the customer group determines the value rather than the company. As a result, companies have to act in order not to suffer image damage and lose customers, and this suddenly brings economic and social aspects very close together. The changing needs of citizens and consumers are therefore not guiding, but really leading.

The role of the modern leader

A modern leader is needed to respond effectively to such changing customer needs. Such a leader ensures that economic, social and environmental values do not clash. He or she carefully weighs all three interests, connects them and takes them as a starting point to make quick decisions. The modern leader also makes sure that the employees take their responsibility and go along with the rapid changes that take place thanks to these decisions. After all, the leader is no longer the big boss, but the one who makes sure they can do their job. In this way, employees themselves give substance to the organisation’s plans.

Is this bad news?

Such a new role in a changing environment is a challenge, but also offers opportunities! After all, the old economy was predictable. The economy of today and tomorrow is not and that creates room to try new things. You may have to make more choices as a modern leader than you used to, but with each choice you have the opportunity to do things completely differently. This allows you to pay attention to other values besides just the economic ones.

The expansion of Schiphol Airport is a good example. Economically, it’s a good idea, but is the plan actually environmentally sound? Is enlargement the right answer to the increasing number of passengers? Or should we go off the beaten track and look for alternatives that are economically, ecologically and socially responsible? By looking at all aspects as a modern leader, you respond to a changing consciousness of your customers: the citizen and the consumer. And that only makes your role as a modern leader that much more valuable.

Value-creating leadership: a different scale

Value-creating leadership therefore means that you not only take the economic interests into account in your decisions, but also the other aspects. You don’t put more plans on the same scales, but weigh the same plan on three different scales. Ideally, the economic, social and environmental scales are in balance. A beautiful, new challenge in which you, as a modern leader, can make the difference in the short and long term, if you ask me.

Do you want to know more about value creating leadership? Then download the ebook Leadership in the Economy of Value below. Or
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