Mindful Leaders Create Positive Societal Impact

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Tuesday, January 31, 2023
By Geert-Jan (GJ) van der Zanden
Photo by iStock/baona
Focus on systemic change is needed to reverse the effects of population growth and environmental damage. And systemic change takes mindful leaders.
  • Humans have entered an era of “perverse economic growth,” in which economic growth happens at the expense of our planet and our society.
  • We must embrace radical systemic change if we are to transition to more sustainable models.
  • Incorporating principles of the “Sufficiency Economy” philosophy, Sasin School of Management teaches mindful leaders to develop capabilities such as curiosity, systems range, collaboration, and mental agility.

One hundred years ago, a newborn would have come into a world of fewer than 2 billion people. In November 2022, our planet’s human population passed the 8 billion mark. Even though relative growth has slowed down somewhat since then, a net of about 200,000 people are added to the world’s population every day.

There is no doubt that economic growth has catalyzed enormous progress in the world, allowing us to feed, house, move, and service billions. But most of our economic growth models have been based on the myopic belief that more people producing and consuming more goods will grow our GDP and thus our well-being. We have learned the hard way that a growth model focused on economic wealth creation can be a destructive force, depleting natural capital, promoting short-term wins over long-term prosperity, and widening social divides.

We have entered an era of “perverse economic growth,” in which we generate economic growth at the cost of natural and social capital. For instance, the U.S. spends between 120 billion USD and 190 billion USD every year to treat burnout and depression, but those dollars count toward the country’s GDP. Similarly, the 2.5 trillion USD that the U.S. has spent since 2001 on wars in Iraq and Afghanistan also counts toward GDP growth—but the loss of lives and destruction of assets are not directly accounted for in the GDP calculation.

Perverse economic growth also has environmental consequences because we extract more natural resources from the ground, return more greenhouse gases to the air, and generate more waste than the Earth can compensate for. In 2009, a study by Trucost determined that our economic activity cost our natural capital 7.3 trillion USD, or 13 percent of global GDP. Here are some sobering statistics:

  • If we are to keep global warming from rising more than 1.5 degrees Celsius by 2030, we must reduce greenhouse gas emissions by 45 percent from 2010 levels. However, the United Nations Framework Convention on Climate Change predicts that emissions will rise by 10 percent in that period. Each year, humans burn enough fossil fuels to equal 400 years of the entire planet’s plant growth. Meanwhile, due to relentless deforestation, the equivalent of one football field of trees is cleared every two seconds, an activity that has turned the Amazon from a carbon sink to a net emitter of greenhouse gas.
  • We’ve lost two-thirds of the world’s animal population in the past 50 years. This biodiversity loss has directly affected the resilience of food chains and nature’s ability to protect against pests and the impacts of climate change.
  • The gap between global water supply and demand is projected to reach 40 percent by 2030. By 2050, one in four people on the planet could experience a water shortage. Water scarcity will drive up food prices, potentially leading to instability and conflict.
  • Of the 300 million tons of plastics we produce every year, only 9 percent is recycled. While most goes to landfills, an estimated 8 million tons ends up in our oceans, where overfishing is also a problem. At this rate, by 2050 there will be more plastic than fish in the ocean.
  • Environmental challenges increase social inequity and decrease social capital. Three out of four people living in poverty rely on agriculture and natural resources to survive and are disproportionately exposed to food insecurity, conflict, and health effects that result from extreme weather events.
While nature has an amazing capacity to recycle our water, digest our waste, and take CO2 out of the air, it also has a harder time compensating for human behavior as our species expands. Do we want the type of economic growth that accelerates our own demise? Wouldn’t we rather use our capacity for innovation and collaboration to reinvent our growth so we fit within the planet’s ecological boundaries and strengthen our social capital?

Assessing Our Impact

Humanity’s effect on the planet is often represented by a simple formula: Impact = Population x Affluence x Technology. Population growth clearly has increased mankind’s impact. Affluence, which measures the amount of consumption per person, grew almost sevenfold in the past 100 years. So can we pin our hopes on technology? While some technological innovations have reduced the consequences of human activity, two important factors have increased it.

The first one is the rebound effect: When efficiency reduces prices, we consume more of what we aimed to conserve. For example, as more efficient air conditioners are developed, we install more of them. As air travel becomes cheaper, we fly more often.

We are running out of time. We cannot rely on incremental improvements in our food, energy, transport, and infrastructure systems; instead, we must take urgent measures.

The second factor is the unintended consequences of technological progress: The promise of positive features often makes us overlook potential negative impacts. For instance, 5G connectivity exacerbates inequality because it currently is only feasible in rich and densely populated geographies.

Given the dramatic trend of most sustainability indicators, we are running out of time. We cannot rely on incremental improvements in our food, energy, transport, and infrastructure systems; instead, we must take urgent measures. To transition to the sustainable models the world needs, we must embrace radical and systemic change.

Achieving the Necessary Change

But here’s the challenge: Systemic change is difficult. Systems are made up of multiple actors, stakeholders, and connected subsystems that exist on social, institutional, cultural, political, economic, technical, and ecological levels. These subsystems often are constrained by fragmented institutional arrangements, contested policy processes, and poorly defined roles for policymakers and administrators. For these reasons, each system is a complex web of causal relationships with multiple feedback loops that can result in unforeseen consequences.

Experts believe that systemic change occurs when top-down conditions interact with bottom-up innovation. Transitions generally see institutional entrepreneurs and networks engage in four phases of activity:

  1. Strategic: They create a transition area, particularly focusing on “front runners” and collaborative visioning.
  2. Tactical: They develop a concrete transition agenda that considers possible pathways and barriers to overcome.
  3. Operational: They conduct experiments and attempt to scale up promising options.
  4. Reflexive: They monitor and evaluate their progress.

As we consider how we can create radical change in our socio-technical-ecological systems, we have concentrated on the hope of economic benefits, the power of regulatory pressure, and the promise of enabling technology. Taxes, incentives, risk-sharing funding models, technology-enabled crowd sourcing, and improved monitoring and reporting are all powerful levers. But people often resist change, especially when it conflicts with deeply held norms and values. Therefore, none of these interventions will have the desired results unless we focus on what drives stakeholders to make sustainable decisions.

For this reason, scientists and practitioners are shifting their attention to the importance of mindset. A 2015 paper examines how to create transformative societal action by emphasizing “intrinsic” forms of motivation, which could be based on reason, emotions, or values. In her 2008 book Thinking in Systems, Donella Meadows identifies three powerful intervention points for systemic change. In increasing order of importance, they are the objectives set for the new system; the mindset from which the new system emerges; and the ability to transcend existing paradigms, rather than just adjusting parameters (subsidies, taxes, standards) and feedback loops (such as wealth redistribution) of the current system.

Educating Mindful Leaders

If we are to have any hope of halting perverse economic growth, business schools must equip our future leaders with the right mindsets, skills, and tools to create systemic change. One way we are doing this at the Sasin School of Management in Bangkok is through our Mindful Leadership course, which identifies six interrelated capabilities:

Contextual curiosity. The humility and critical thinking to seek intelligence from a range of sources and to connect the dots between disparate data points, while being aware of filters and biases. This capability also includes the ability to identify trends before they become “clear and present.”

Future consciousness. The ability to imagine the future through divergent thinking, using multiple lenses and scenarios, while applying multigenerational empathy and agency.

Systems range. The sense of leadership responsibility and stakeholder empathy needed to run high-performing organizations and shape the systems in which we operate. This requires leaders to understand the relationships between the components of a system and foresee the intended and unintended ripple effects of interventions.

If we are to have any hope of halting perverse economic growth, business schools must equip our future leaders with the right mindsets, skills, and tools to create systemic change.

Collaborative competence. The capacity to successfully engineer transformative collaborations with nontraditional change partners.

Radical impact agility. An uncompromising focus on delivering impact, despite operating in a world marked by volatility, complexity, uncertainty, and ambiguity (VUCA). Leaders with this focus deploy disruptive intent and entrepreneurial bias for action as they continuously question the status quo and explore new models of impact and value creation.

Purpose. The self-knowledge, integrity, moral compass, and clarity of vision that will inspire others to align their activities with the greater good.

Pursuing Sufficiency, Not Excess

Sasin’s Mindful Leadership course also integrates the principles of the “Sufficiency Economy” introduced in 1997 by Thailand’s King Bhumibol Adulyadej. He promoted these principles to counter the excesses of risk that had caused an economic crisis at that time. In his vision, an economy should aim for gradual, holistic development across society and proceed with care and foresight to prevent mistakes. The philosophy has been successfully adopted by numerous sectors in Thailand, most notably the financial sector, where it has improved stakeholder satisfaction and reduced the risk and cost of capital.

The Sufficiency Economy philosophy applies the Theravada Buddhist principles of moderation, reasonableness, and risk resilience to business:

  • Moderation results in the prudent management of risk-reward opportunities and ensures that no one stakeholder can trump the interests of the others. It also prevents companies from succumbing to “irrational exuberance” and market distortion.
  • Reasonableness is driven by a win-win mentality that builds trust and cooperation rather than competition. It encourages leaders to understand both the short-term and long-term consequences of their conduct.
  • A company increases its risk resilience when it builds financial, human, social, and reputational capital by exercising moderation and avoiding unreasonable relationships.

The theory of the Sufficiency Economy also promotes the character virtues of knowledge and integrity as essential pillars for quality of management. These are especially relevant in today’s crisis of trust, polarization, greenwashing, and misinformation.

Realizing Our Role

Other Buddhist tenets can supply guidance to business leaders contemplating their responsibilities to society. For instance, Bob Thurman, a former professor of Indo-Tibetan Buddhist Studies at Columbia University, once explained that the belief in reincarnation translates into a powerful motivation for sustainability. As we degrade our natural and social environments, we worsen the conditions in which we will have to live after reincarnation. Only when we leave the world better off than when we found it will we have a chance to reach enlightenment.

Business schools, however, do not need to build on religions or wisdom traditions to educate mindful leaders who can understand how to redesign our current systems. But in today’s endangered VUCA world, we do need leaders who consider the long-term future and system-level consequences of their actions and base their decisions on judgment, not passion. We need leaders who display integrity—who exhibit self-control, regard for others, and an understanding of their beliefs and biases in relation to the needs and values of their stakeholders.

Business schools have an obligation to help students understand the bigger picture of the world we live in so they can create societies where humans and nature can live in harmony—and enjoy a sustainable future.

In the eight minutes it took you to read this article, the world lost approximately 100 football fields worth of forest.

Geert-Jan (GJ) van der Zanden
Visiting Professor, Senior Advisor on Sustainability Leadership, Sasin School of Management, and Managing Director, Xynteo
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