The evolution of values-based leadership

“Values-based leadership is a considered attempt to set up a new way of thinking about leadership, where your espoused values and your enacted values can align,” says Camaren Peter, associate professor at the Allan Gray Centre for Values-Based Leadership. 

Part of the UCT Graduate School of Business (GSB), the centre is “dedicated to exploring new ways of doing business based on purpose, sustainability and responsible practices that create dignity and belonging”.

In a previous interview — click here to read it — Peter shared some insight about the centre, its approach and values-based leadership.

In this follow-up Q&A, he discusses the evolving nature and impact of values-based leadership, its importance in corporate culture, and some of the obstacles to implementing values-based culture in business.

How has thinking around values-based leadership and its impact on the performance of an organisation shifted in recent times? 

Initial assessments of values-based leadership’s impact on performance were based on aspects such as leader-follower loyalty or the triple bottom line. But these studies were not able to compare apples with apples.

Now that there is more evidence-based work being done, we are seeing the impact of values-based organisational leadership on performance and strategic coherence.

This stands to reason, because when there is a successful propagation of values throughout an organisation, these values scripts become guidelines for how to act in certain situations. So efficiency increases, because you don't have to keep asking what kind of decision should we make in this particular circumstance. You've got a strong value coherence that guides your decision-making.

How has our understanding of leadership changed?

We have moved from an understanding of a leader at the top providing a grand vision, to leadership as distributed throughout an organisation. The emphasis has moved to looking at what kind of leadership culture you have, rather than what kind of leader you have at the top. Here, both formal and informal leadership within the organisation is important.

This is one of the most profound shifts, and one that is absolutely necessary to navigate the kind of complex grand challenges that we face, from the Fourth Industrial Revolution to social cultural change, climate change, resource scarcity and so on.

To appraise complexity, you need a more consultative leadership style, a diversity of views around the table. So the shift is more towards a leader as a facilitator of sense-making in the face of complexity.

Tell us about notable South African examples of values-based leadership that you have encountered, and what it can tell us about state capture? 

I was involved in the first academic report that looked into state capture in SA and started connecting the dots in the very early days. It got me thinking about why organisations like Sars and the National Treasury were better able to withstand the efforts to capture them than other state-owned entities like Transnet. 

One of the benefits of values-based leadership, when the values of an organisation are propagated well throughout it, is that it establishes a resilient middle management band that acts as a bulwark against values drift, particularly because they are typically in the organisation for a long time.

These are long-term civil servants, for example. They understand the purpose of the organisation and its public mandate. They understand the principles that govern the way they go about doing their work. When the boards were captured from above, it's my anecdotal observation that they were able to resist that capture.

Leaders can come and go, but your middle management structures, and new middle managers, can stick around for a long time. This provides an organisation that's much more resilient, whether to state or to private sector corruption.

How do you envisage values-based leadership evolving in the future? 

More of the same is not going to change the situation; if we want the kind of vision for a “new Africa” and African renaissance, then we need to be thinking about how business shows up within the social compact. Instead of just serving your shareholders, you're also serving your stakeholders, you're serving your organisational members, as well as serving your consumers and clients. If there's a value coherence within that, I think it speaks to a profound shift in business. 

The thinking that business can be conducted independently of the values and aspirations needs of those societies is hopelessly misplaced. It's part of the reason we've ended up with the kind of world we have with dire inequality between the global north and global south, and within the global south countries themselves, particularly SA. We are facing challenges that require responses that governments and states alone cannot fully fulfil.

Business can become part of a virtuous cycle, securing the loyalty of members within those organisations, because they're serving a greater purpose within those societies and making profits at the same time. 

What are the biggest obstacles and challenges facing values-based leadership? 

The historical mechanistic view of the organisation as a machine is perhaps one of the biggest obstacles, because then the people within them are seen as cogs in the wheel. When we think of people as simply functional and replaceable, then we're not drawing on the personal agency, their personal values, how they show up to work, and identify with the organisation and its purpose. 

Another obstacle to values-based leadership is the ability to engage with critical thinking and reflective practice. That's really what it boils down to. Our inability to wrestle with that complexity is what makes it easy for people to come to very simple and simplistic conclusions, which means we are unable to act on the real systemic causes of problems.

So from a values-based leadership perspective, that inability to grapple with critical thinking and reflective practice means that it's easy to lapse into very simple, simplistic solutions for far more systemic and complex problems than we appraise. This is dangerous because you're not going to solve the problems, you're going to provide symptomatic relief, at best, for those problems. This is a fertile breeding ground for reactionaries on one side and demagogues on the other.

On the other hand, we are seeing that people want new forms of organisations deeply informed by values, meaning and purpose. This might be captains of industry who come into the UCT GSB Executive MBA programme, and who want to create meaning and purpose for themselves, and the people around them. Millennials and Gen Zs are looking for different options about how they find their way in the world, or where they will be employed.

How does all of this complexity impact on the way you teach? 

An important point for us at the UCT GSB is you can't learn that just from textbooks alone. You have to be put through experiences that force you to grapple with critical thinking challenges, and be able to engage in practice with a deep sense of awareness of how you're practising. This requires a different set of capacities that goes beyond the intellectual, and requires that you develop the emotional side as well. It’s vital, from a reflective perspective, to have an awareness of how one engages with the challenges that present themselves to leaders almost on a day-to-day basis.

• About the author: Ami Kapilevich is a UCT GSB alumnus.

This article was sponsored by UCT.