ESG progress demands great managers

What on earth am I talking about, connecting progress with Environmental, Social and Governance issues with having great leaders and managers in your organisation? For each of the three domains of ESG, investing in managers will be critical to success.

I've been inspired to write this following a wide-ranging discussion with Studio 3's Ben Rowland, an expert in acquiring and passing on skills at work. I've also been informed by the work of McKinsey's Terra Allas, Bill Schaninger and Saïd Business School professor Jan-Emmanuel De Neve.

Managers affect the wellbeing of 2.1 billion people daily

That's a rather big S in ESG. There are a further 1.2 billion who are self-employed. I speculate that a significant amount of these have probably fled a manager doing what he or she thinks is right. Hence global employee engagement levels are so low, particularly in the UK and the rest of Europe.

Why aren't more managers getting it right with their teams? Here's my take: few role models, insufficient recognition for helpful behaviours and a lack of opportunity to practise new skills until they're second nature.

After mental health, job satisfaction is the most important for overall life satisfaction. We spend a lot of time at work, so this makes sense. What are the drivers of job satisfaction? It turns out relationships are a bit more important than having an interesting job. We're social animals, after all. And within our web of work relationships, which one is dominant? You guessed it, it's the manager who drives over 85% of satisfaction with work relationships. Given all this, Terra Allas and her colleagues rightly wonder if:

Shifting the behaviour of an entire cadre of managers might seem a daunting proposition.

As you consider this, spare a thought for those in teams who feel psychologically unsafe and physically stressed every day. What's their automatic threat response? Each of these is playing out in your organisation right now:

1. Fight: time taken to resolve disputes arising from the fight response
2. Flee: loss of talent and cost of replacement as a result of the flight response
3. Freeze: loss of productivity and innovation because many have just frozen in fear
4. Flock: unhealthy dynamics due to people flocking together against management
5. Fawn: management hubris because some indulge their bosses to advance their careers

The 2.1 billion is sadly just the tip of the iceberg. Those of us in organisations go on to affect the day-to-day lives of far more people on our planet, if not most. So that's the big S in ESG.

What of the E? If we take a step back, what more and more organisations are implicitly or explicitly inviting their employees to do is this: shift mindset from putting shareholder value above all to creating value for all while protecting what matters to society. This demands a significant change in how employees relate to each other and do their work. How can employees pivot toward sustainability while keeping day-to-day performance goals front and centre? Sounds very much like something a manager is there to facilitate.

Managers play a big role in this mindset shift by listening, helping team members see and explore the tensions and the opportunities, framing options, weighing up pros and cons, providing support, and creating psychological safety for team members trying new ways of working.

And the G? Managers are the frontline of governance. How can a whole organisation be governed effectively if those governing the foundations and building blocks of the organisation are not leading like the best?

A coaching style will be essential

A decade of research into the best-performing and most engaged teams makes clear what it takes: leaders and managers with a coaching style. Acquiring this requires a particular set of approaches that I've written about elsewhere. Beware the great training robbery!

We need to safely and systematically practise new ways of getting the best out of others. Knowing how is the relatively easy part, even if it means changing habits of a career. Actually doing something different is the hard part. Only real-world practice works, not role plays or stage-managed exercises.

Imagine feeling confident about playing guitar after reading up on it and watching a few videos. I don't think so. So it is with adopting a coaching style of leadership. Books, videos and training courses don't cut it. They solve for a bit of knowledge transfer at best, not complex behavioural change.

Seek out programmes that put facilitated coaching practice at the heart of the solution. And such programmes must be manageable in the context of already over-stretched managers who now need to change how they lead. That's a practical ESG initiative right there.