Cognisant Leader

Written By

18th June 2021

“Becoming a cognisant leader involves embarking on a journey of lifelong learning and growth. Not only do you have to commit to finding your purpose, you also have to live to that purpose through every aspect of your business. This means focusing on creating value for all stakeholders involved: yourself, your customers, your team, and the wider world too..”

It’s common for people to think that businesses exist to do one thing: make money. But this isn’t entirely true. When businesses have a higher purpose in mind, they have the potential to not only maximise their profit, but also do good in the world. 

For businesses to achieve this, however, they need a cognisant leaderone who is willing to step up to a high level of integrity and social responsibility

In this blog, you’ll discover the qualities that make up a cognisant leader, as well as how you can lead your business toward purpose and profit. 

Let’s ask ourselves the following questions; 

  • Why we need to change the language surrounding business & people;
  • How to create a cognisant work culture; and 
  • Ways to lead your business with integrity.

Personal Transformation Comes First.

Let’s begin with a story. 

Let’s say you are a CEO of a company. Your future as CEO of the company is going to be discussed in the board meeting – and it isn’t the good news. Board members feel that your work over the past few years had been unsatisfactory. 

For years, you might have led lots of initiatives which aimed to sell everything from stationary, clothing and books to healthy food and supplements.  Unfortunately, it was a bust. The board had had enough.

After you left the meeting, you might feel terrified. You might have felt like this was the end for you as a leader. But, in fact, it was just the beginning.

When you actually think and reconnect to your purpose – your “why” for wanting to lead a business that was driven by something more than just money.

You would need to grow and evolve as a cognisant leader. That meant embarking upon a road-map of personal development – including what mindset you need to embody and the qualities you need to cultivate. 

But first, let’s take a look at the role of business in society – and at how capitalism can be a force for good.

When It Comes to True Leadership in the Business, Profit and Purpose Aren’t Mutually Exclusive.

When we think about business, many of us imagine big corporate companies monopolising markets, squashing competitors, and always looking to maximise profits. But not all companies operate like this.

In fact, if you talk to business leaders you’ll often find that they’re in it for the purpose of the business: the meaning it brings to their lives and the value it brings to their customers. Of course, businesses strive to make money – otherwise they couldn’t exist. But, at the same time, the new technologies or services they provide often aim to upgrade people’s lives. 

Many people have a hard time imagining that businesses have a higher purpose in mind beyond making money. 

One of the reasons for this is the way we compartmentalise organisations as either for-profit or not-for-profit. With this logic, businesses are seen as dedicated to making profit for their owners, or shareholders. Meanwhile, non-profit organisations are, by definition, perceived as not intending to make money at all.

We expect businesses to ruthlessly pursue profit. On the other hand, we expect organisations related to human and nature to be driven by altruistic motives rather than a desire to maximize revenue. 

The thing is, purpose and profit don’t have to be mutually exclusive; a business can make money while also doing good in the world. 

This is called cognisant entrepreneurship – it claims that every profit-making activity has the potential of realising, and elevating, a higher purpose. And when a leader recognises this, the economic and social benefits of the business expand exponentially.

Businesses can be a great force for good in the world if they are led by a cognisant leader with a strong ‘Why’

Cognisant Leaders All Have One Thing in Common – Integrity.

If your company had doubled in size, your shareholders were happy, and your profits were going through the roof, what would you do? Would you carry on the same way, or would you try to do even better?

However, doing better didn’t mean making more money. It meant creating a company that was profitable – but that also lived by the virtue of integrity. This meant satisfying shareholders while simultaneously trying to do right by the environment and society at large. 

Making positive changes to a business relies on having a leader with integrity – one who is willing to admit where the company is falling short and make concrete steps to address those areas. But having integrity is also about practicing the following qualities: honesty, honor, authenticity, and trustworthiness.

Honesty and Authenticity Are Traits That Every Leader Should Cultivate.

Did you ever tell small white lies when you were a kid?

Maybe you painted a pretty picture on your parents’ lovely cream sofa – and gave your sibling the credit. Or perhaps you ate the last cupcake and blamed the dog. As children, one of the first lessons we learn is to tell the truth. But many of us don’t do this enough – even when we’re adults.

Being dishonest has far-reaching consequences, especially in the world of business. 

Telling the truth is powerful, but it’s not always a comfortable endeavor. Occasionally, it might mean upsetting colleagues, challenging convention, or rocking the boat in some way. No wonder so many people avoid it. 

While few business leaders have this kind of integrity, real leadership demands it. We need truth-telling leaders to confront us, challenge our assumptions, and ask us to focus on areas of our lives that we don’t always want to examine. 

For example, former Medtronic CEO Bill George once told a colleague – who was pretty shy about giving his boss negative information – that “integrity is not the absence of lying.” Having integrity, and telling the truth, can sometimes mean speaking up and saying things people might not want to hear – even if it’s uncomfortable. 

Another aspect of integrity that’s essential to leadership is authenticity. An authentic leader is someone who is the same person, whether they’re presenting to their board of directors or onboarding new interns. 

In other words, they don’t play to the crowd because they’re afraid of what people will think and say. Instead, they stay consistent – and true to themselves. 

Authenticity doesn’t always come naturally. But it is a quality that can be cultivated. 

While it sounds like a cliché, being true to yourself involves knowing yourself. You have to recognize your own strengths and weaknesses, and take responsibility for their impact on those around you.

This doesn’t mean leaders should drop everything and take a “self-help sabbatical.” But gaining a little self-awareness – either through self-reflection or feedback from others – can go a long way. 

Cognisant Leadership Involves Pursuing WIN-WIN-WIN situations.

Have you ever heard phrases like “natural selection,” “survival of the fittest,” and “it’s a dog-eat-dog world” being thrown around in business?

Well, that’s no accident. For years, we’ve been taught that “bloodthirsty conflict” is the fundamental reality of business – and that only the strongest entrepreneurs survive.

These ideas have been capitalised on by the mainstream media too. In the popular CNBC show Shark Tank, various entrepreneurs pitch their business to hard-nosed venture capitalists, or “sharks.” And only the best ideas survive the “ruthless competition” to receive funding.

In many cases, the overriding goal in business is to survive and prevail – and crush any competitors that get in your way. This means there’s only ever one winner; everyone else is a loser. 

But what if there were an alternative way of doing things?

The key message here is: Cognisant leadership involves pursuing win-win-win situations.

Leadership today is increasingly complex – especially when you’re having to navigate all sorts of relationships and responsibilities and keep everybody happy.

In business, win-win solutions – where you create a positive outcome for yourself and the people on the other side of the table – are the most ethical way forward when it comes to decision-making. 

For example, a win-win solution could be when a trade happens and both people do well; one person receives a product they want, and the other receives a gain on the exchange. 

Then there are win-win-win solutions, which go even further. Instead of just looking for ways to create positive outcomes for those within the business relationship, they find ways to create value for the broader, external community – a third win. 

This community can be defined as widely as you wish. For example, the additional win could be for your family, your religious community, your city, your state, your nation – or, if you’re really ambitious, the entire world. 

So, how can we practice the art of the win-win-win?

Well, when you’re about to make a business decision, try asking yourself, “Is anyone losing in this proposal?” or “Does anyone perceive themselves as getting the short end of the stick?” If the answer to either of these questions is yes, then ask yourself how you, and your team, can collaborate to fix it.

Posing these questions brings clarity to any proposal by helping you identify any gaps – and forcing you to create better and better alternatives.

Invest in Long-term Opportunities For Businesses to Remain Healthy

In the years leading up to the financial crisis of 2008, Iceland was in the throes of a boom-and-bust cycle. 

This is where an economy grows exponentially, creating abundant jobs and bringing high market returns to investors. Then it shrinks, causing people to lose their jobs – and investors their money.

There were a few reasons why this bust happened in Iceland. For starters, everybody was in a frenzy to get rich quick. Instead of thinking about long-term financial stability, companies borrowed cheap money and bought other companies to fuel their growth. 

Then, when the economy crashed, this approach of pursuing rapid, short-term profit left businesses in massive trouble. 

The key message here is: For businesses to thrive, they need to invest in long-term opportunities. 

The story of Iceland’s boom-and-bust phase contains a really important lesson for cognisant leaders: pursuing long-term value creation is better than chasing after short-term financial wins.

To create sustainable prosperity over the long term, business leaders must look to the future, understand the dynamics of change, and invest with a multi-year – or even multi-decade – timeline. 

So, as a cognisant leader, it’s imperative to resist the temptation to maximise short-term gains; instead, invest in the future. But how can you master this kind of long-term thinking?

Well, one way is to conduct a Premortem – an exercise many successful leaders use. The idea is to imagine yourself on your deathbed, looking back at the you of the present. Ask yourself: “What really matters? What risks are worth taking? And what needs to get created to make the world a better place?”

This exercise can help you clarify future aims and ambitions for your company. And if you do it honestly, the quality of your leadership will reflect this long-term, positive perspective.

Creating a Cognisant Work Culture Involves Attracting, Hiring, and Retaining Talented Employees.

When we think about the most successful business leaders of our time – people like Steve Jobs or Jeff Bezos – we tend to assume they achieved great things single-handedly.

However, behind these talented entrepreneurs are fantastic teams that complement the strengths of their leader and compensate for their weaknesses. 

That’s why hiring the very best employees, and creating a culture where they can develop and thrive, is critical for the success of any organisation and its leaders.

The key message here is: Creating a cognisant work culture involves attracting, hiring, and retaining talented employees.

This is something that Steve Hall, the founder of the highly successful car dealership company driversselect, discovered firsthand

Just a few months into founding his business, he realised that the key to creating a thriving organizational culture was to invest significant time up-front on hiring. That meant bringing the best talent on board from the outset – and doing everything in his power to keep them. 

When Hall interviews for entry-level positions, he seeks to hire people who will eventually be able to do jobs that are two or three positions up on the corporate ladder. So when hiring a receptionist, for example, he looks for someone who could eventually become an office manager. 

Once a new hire is brought on board, Hall invests in leadership training to help this entry-level employee grow and develop within the company. As a result, Hall’s staff turnover rate is one-third the industry average.

Other companies also understand the importance of hiring and retaining quality employees. For example, in 2019, Amazon pledged to invest $700 million toward providing skills-training to 100,000 team members over the following six years.

However, creating a thriving company culture doesn’t magically result from grouping talented individuals in a room. As a leader, you’ll need to take frequent “chemistry checks” to ensure that members of your team are getting along and working effectively together.

It’s a good idea to frequently meet with your team to iron out any issues that might have arisen. Ask questions, like: “How are people getting along? How high is the trust between people on the team? Is there anyone disrupting morale? And, if so, is there anything I can do about it?”

Creating a cognisant culture is about creating an environment of safety, trust, and enjoyment – as well as hard work. As a leader, it’s your job to keep your team thriving if you wish to keep your company on the road to success.

Take Your Foot Off The Gas.

It’s all fine and dandy being a cognisant leader who works tirelessly toward their purpose.

But you’re no use to anyone if you’re burned-out. So if you’re feeling tire and unenthused, take a break!

Leave your phone at home, and go and spend time in nature. Your mind, your body, and your business will tank you for it.

For further information, please get in touch.

 

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