Transformational Leadership in Corporate Social Responsibility
| By Joel Hare |
Transformational leadership defines a style of leadership that lives in the Full Range Leadership Model. As opposed to transactional leaders, who lead by telling, transformational leaders lead by example, uniting people around a common purpose and empowering them to initiate change that will shape the future success of the company.
Transformational leadership emphasizes identifying the needs of an organization, creating paths for development, inspiring teams to be creative, and giving employees the autonomy necessary to find innovative solutions. Many factors can help explain why a business is successful, but transformational leadership is one that is used by some of the most renowned business professionals in the world – past and present. Tyra Banks, Richard Branson, John Deere, Walt Disney, and Dalai Lama are some of the proponents of transformational leadership. If you prefer older examples, you can think back to Joan of Arc, Cleopatra, Confucius, Homer, Machiavelli, and Socrates. In common among them all is a leadership style that inspired change in their surroundings. Some incorporated it differently to meet the needs of their unique contexts, but the message remains the same. Leaders that show care for their purpose (e.g. business, people, art) have been shown to enjoy unbridled loyalty from their followers due to their vision, inspiration, innovation, motivation, and generosity.
Corporate Social Responsibility (CSR) is trending globally in small and big businesses alike. But the catch is, CSR is optional. Indeed, it encompasses what Archie Carroll called “voluntary” actions to benefit broader society . Businesses and individuals have the option to not be concerned with how their products, processes, and footprint affect global development. However, employees want their employers to build CSR into their business model. According to the 2016 Cone Communications Employee Engagement Study, almost 75% of employees enjoy their job more when they can make a positive impact at work, and 51% of them will not work for a company that does not give back to the community or violates environmental laws . Looking back to a 2013 Gallup survey, only 13% of the employees reported that they were actually engaged in their work – which in the end cost an estimated $450 to $550 billion annually .
For CSR to be effective, it must be equitable, sustainable, and of course, advantageous to society’s needs . Business models that are invaluable to the community, as well as its employees, are vital for succeeding in today’s market. A study conducted by Glavas indicated that by combining multi-level models of CSR with management, individuals benefit, organizations benefit, and in turn, so does society .
Consider CSR at Walt Disney and John Deer. Every year, Disney publishes a Corporate Responsibility Report detailing what they have done for their communities and society. The 2019 report shows that they purchased a 250+ acre solar facility that helped reduce their net emissions by 47% from previous 2012 levels. They provided over 600,000 hours of community service, strived to ensure that their workforce was equally distributed with over 44% being people of color and 52% being women, and gave over $300 million in cash as donations to nonprofit organizations . John Deere’s CSR initiatives focus on eliminating hunger, education, community development, and volunteerism. Their vision is based on transforming communities through sustainable and innovative projects by resource utilization and employee engagement .
Leaders at the Helm
Having a transformational leader at the helm, one that not only can be a visionary for the company but one that understands and values what CSR can do for business, is an important aspect of measuring potential future business success. The transformational leadership style creates role models that employees will be inspired to follow. In doing that, CSR is almost always on the minds of transformational leaders, as well as companies that want to thrive, be successful, and give back.
Joel Hare, MBA, is a decorated military Veteran and self-published author currently working on completing his second book in the Pendants of Fate series. He lives in Minnesota with his wife Sarah, son, and two puppies.
3P INSIGHTS is a consulting firm that offers training, speaking and support services to help organizations attract and retain diverse talent, create inclusive workplaces, become better environmental stewards, and improve their overall social, environmental, and economic impact.
— REFERENCES — Carroll, A. (1991). The Pyramid of Corporate Social Responsibility: Toward the Moral Management of Organizational Stakeholders. Business Horizons, July-August, p. 42.  Admin. (2016). Cone Communications Employee Engagement Study.  Gallup (2013). State of the Global Workplace: Employee Engagement Insights for Business Leaders Worldwide. Washington, DC: Gallup.  Daou, L., Sarkis, N. . Giving back to the community, an obligation or an option today?  Glavas, A. (2016). Corporate Social Responsibility and Employee Engagement: Enabling Employees to Employ More of Their Whole Selves at Work. Organizational Psychology – Frontiers in Psychology.  Admin. (2020). 2019 Disney Corporate Social Responsibility Update.  Admin. (2020). Deere & Company 2019 Sustainability Report – A Power For Good