Research - 02.05.2024 - 15:00 

53. St. Gallen Symposium: Managers of today and tomorrow demand a paradigm shift

Leaders of today and tomorrow are calling on companies to turn their priorities upside down. This is a key finding of this year's edition of the "Voices of the Leaders of Tomorrow" study conducted by the St. Gallen Symposium with the Nuremberg Institute for Market Decisions (NIM).

As part of the study, 650 talents from the international network of the St. Gallen Symposium, the "Leaders of Tomorrow", as well as 250 senior executives from the world's top companies were asked about their perspectives on the issue of the scarcity of natural resources. 

The majority of respondents from both generations call on companies to prioritise social and ecological added value over profits for their shareholders. The required hierarchy of priorities would turn the current situation, in which shareholder value dominates from the respondents' perspective, on its head. However, Leader of Tomorrow Jessica Jones (29), sustainability manager, is convinced that "social and environmental values and profit are not mutually exclusive. Over time, the true cost of sustainability will become clearer and clearer, and that will mean that profit is only possible if these values are fulfilled."

Resource conservation more important than economic growth

According to the survey, there is intergenerational agreement that the increasing scarcity of natural resources is one of the greatest challenges of our time. The majority of respondents would even be prepared to temporarily forego economic growth in order to tackle it. Both generations state that companies as well as politicians and consumers must do far more to ensure the sustainable use of scarce natural resources than is currently the case. However, they also see an opportunity for companies: 72% of the Leaders of Tomorrow and 69% of the Senior Executives state that the scarcity of natural resources is already acting as a catalyst for sustainable transformation processes. Another young guest at the St. Gallen Symposium, William Bergh (29), entrepreneur, is convinced "that the value creation potential of the future is sustainable. The companies that are best positioned to tap into it will be the most profitable in the long term."

Leaders of Tomorrow want to link managers' bonuses to sustainability targets

There is less agreement between current and future managers when it comes to assessing specific measures to protect resources. The consensus on putting sustainability first in the company ends abruptly when it comes to taking personal responsibility: while 63% of tomorrow's managers demand that managers' bonuses should be more dependent on sustainability targets than on financial targets, only 32% of today's managers agree. Leader of Tomorrow Kristina Kirova (26), a doctoral student, sees one reason for this in the immense complexity of the problem. "Overcoming scarcity and sustainability requires [...] systemic changes that go beyond the control of individuals."

The majority of future managers (63%) believe that stricter rules and market regulations are more likely to lead to sustainable change than the free market. Today's top managers take a similar view (57%). However, when it comes to specific political measures to protect resources, there is again disagreement. While both generations consider international cooperation and the funding of research and development to be particularly effective, only young managers tend to call for sanction mechanisms and taxes on resource-intensive goods. Today's managers, on the other hand, favour measures that encourage companies to report on sustainability and set efficiency standards. The much-discussed emissions trading scheme is not seen as particularly effective by either generation.

Cross-generational leadership as the key to sustainable change

"The increasing scarcity of natural resources is a global megatrend that will pose major challenges for the economy and society in the foreseeable future. By comparing the generations of current and future managers, we see an opportunity to identify shared visions and solutions for a sustainable future," explains study director Dr Fabian Buder from the Nuremberg Institute for Market Decisions. Intergenerational cooperation in corporate management is a necessity for sustainable change. The participants in the study agree on this (81% of future managers and 77% of current managers). "In the search for solutions to the challenges facing business, politics and society as a result of the increasing scarcity of natural resources, it will be crucial for intergenerational dialogue to succeed," emphasises Felix Rüdiger, Head of Content and Research at the St. Gallen Symposium. The results of the "Voices of the Leaders of Tomorrow 2024" study show that there is a common basis for this.

Technology alone is not enough to counter resource scarcity

When asked about the results of the study, Prof. Dr Miriam Meckel says in this report, “the leaders of tomorrow have recognised that we will not be able to solve all problems with technology alone. As a technology optimist, I am convinced that AI can help us to better understand how the climate is developing, for example. Or how we can organise mobility more sensibly. At the same time, this technology also consumes a lot of energy.” The HSG professor of Communication Management also points out, “the entire AI industry is responsible for around 2% of global CO2 emissions. Ultimately, we can't solve the problem of scarce resources with technology alone; we also have to solve it for the technology industry. We need to seize the opportunity to shape it so that we don't end up being the AI's lapdog.”

Insights from St.Gallen: The path to a ‘healthy high-performance company’

The research work of the Institute for Leadership and Human Resource Management at the HSG offers a further perspective on the topic of corporate development. St.Gallen leadership professor Prof. Dr. Heike Bruch has been shaping developments in HR management for more than a decade and is one of the leading shapers of the world of work. Based on her research, she emphasises in a previous interview that “healthy, high-performance companies are not only much more attractive to employees of all generations, but are also much more successful economically – on course with a healthy culture.” Young employees react negatively to increased pressure, to one-sided performance-orientated and laissez-faire management. Experienced employees, on the other hand, tend to struggle with too little room to manoeuvre when making decisions. 

According Bruch, it is particularly important to develop organisations sustainably – healthily, with a view to the next generation and ecologically sustainably. “This requires a cultural transformation towards healthy high performance.” She states also that many companies are under enormous pressure – more speed, efficiency, innovation, permanent transformation, etc. and many are countering the pressure by passing on the pressure in existing systems and increasing the intensity and pace. “Overall, 75% of companies are caught in the acceleration trap. We call these companies at the limit. Others change the system – we call them healthy high-performance companies. They differ fundamentally from the others in terms of how they deal with energy (strengthening productive and pleasant energy versus widespread resigned inertia and the acceleration trap), modern leadership (inspiring multimodal versus authoritarian or laissez-faire leadership) and future-oriented people management (development-promoting and emotionalising versus performance-centred).”

Image: Adobe Stock / alphaspirit

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