7th October 2019 0 Comments Human Insight, Purpose

Potential Project founder Rasmus Hougaard on developing people-centric leaders

Rasmus Hougaard, founder and managing director of Potential Project, and leadership trainer to blue-chip companies, opened his lecture at the Thinkers 50 European Business Forum with a story about mindful, selfless and compassionate leadership.

After the 9/11 terror attacks in New York, hotel chain Marriot International went from an occupancy rate of 75 to 5 percent overnight. Most businesses would have made the tough decision to lay-off its workers but Marriot, a family business, had always led with the belief that “if we take care of our people, they take care of our customers, and business will take care of itself”. As the story goes, CEO Bill Marriott insisted on reduced working hours and cut salaries to ensure mass redundancy was off the table.

“When a family goes through hard times,” explains Hougaard “you don’t just cast out the most vulnerable members of that family. You stick together”.

When cynicism and curiosity unite

The Marriot example still holds water near 20 years later as an act of compassionate leadership. But how do you convince today’s cynical CEO that compassion can translate into success.

“I would never try to convert someone who’s just cynical” says Hougaard, “however, those [CEOs] who are cynical, but curious, the point is that you, as a CEO can only do so much, the rest of what’s happening in organisations is through the senior leadership team, the middle management and the employees.”

He continues “If your attitude to the people that you are engaging with is harsh, impatient and unkind… they may do what you say, but they will not do it with an intrinsic motivation because they do not feel motivated by you. So if you don’t have a genuine sense of compassion or kindness in your leadership you won’t have good followership and ultimately the organisation will suffer from that.”

“For me it’s a question of helping them to uncover what they really want to do and be.”

Hougaard’s consultancy Potential Project has been working with CEOs and C-suite teams for a decade and the good news is that there are very few organisations that don’t already have these values within their leadership teams.

“For me it’s a question of helping them to uncover what they really want to do and be. It’s easy to say that leaders who do bad things are bad people, but that is a cognitive fusion of having done something bad — which we’ve all done — and saying they are bad people. It’s a generalisation that doesn’t serve anything. All human beings want to do good.”

Meeting the bottom line with good

This desire to do good in business was highlighted earlier this month when the Business Roundtable letter stated their commitment to moving away from shareholder primacy.

“The mental transformation of CEOs in organisations right now is coming out of the whole climate crisis, I think that is very clear” says Hougaard. “Without that it will be business as usual. And I think it’s honestly been has been helped by the many challenging world leaders we are facing right now, climate crisis is forcing organisations to do things differently to maintain their consumers. The unethical political movements that we’re seeing are forcing business leaders to take a stand.”

Potential Project works closely with some of the three highest-rated purpose-led organisations in the world – IKEA, Unilever and Patagonia – at creating leaders that are people-centric and have a truly human approach to their leadership.

“To be a purpose-led organisation you need to have a leadership that is deeply grounded in their own values, which you can only be if you are mindful, otherwise values will go out the window. You can only do that if you are selfless — it’s not about you, it’s about a bigger cause, which is what purpose is all about. And you can only do it if you have compassion, because compassion is what is enabling the oil in the machinery of creating a purpose-led organisation because people will know that you genuinely care for them and that you genuinely care for the bigger environment. It is what compassion is all about.”

Modelling purpose

Having worked with hundreds of C-suite leaders over three decades, Hougaard has seen first hand their desire to play out their compassion: “It hasn’t been accepted because the whole shareholder paradigm, which is hopefully coming to an end now, has put everybody under a completely ridiculous short-term human suffering pressure.”

Hougaard says there is a need for more examples of role-model companies that have shown that compassionate leadership is profitable, is successful and can be achieved.

“One of the great examples is IKEA,” he says, “It’s a foundation now, they are donating their profits. This year, up to today there’s been 2.5 bn (USD) in green energy. What they do for their people, for the planet, is just incredible and they’ve been doing this for decades without the world knowing about it. Now they’ve decided to go more public with it because big companies need proof of concept that it is possible to to be good and do good at the same time and have a good bottom line.”