Alison Taylor is a clinical professor at NYU Stern School of Business and the Executive Director at Ethical Systems. She also wrote Higher Ground – How Business Can Do the Right Thing in a Turbulent World. Here she discusses what she has learned from the workplace needs of her MBA students.
I teach ethics and sustainability classes at the NYU Stern School of Business, a university with strong connections to Wall Street. Repeatedly, I see that today’s MBA students press for rethinking the role of Human Resources inside corporations, and for a new approach to leadership and culture more broadly. Our future business leaders are more in favor of worker rights and voice than I would have assumed, and these trends are accelerating.
Soaring interest in more diverse, equitable, and inclusive organisations best illustrates how emerging ethics challenges are no longer restricted to narrow, legalistic concerns but multidimensional issues that are fast transforming organizational culture.
DEI challenges
A particular challenge regarding pressures for diversity, equity, and inclusion is that they come with distinctive dimensions for individuals, teams, organisations, society, and political change. Employees increasingly claim such characteristics as age, values, race, and gender as important factors in their identities and what can be expected of them. Now factor in soaring political polarisation and partisan tensions.
These intersectional identities weigh heavily on perceptions of fairness and satisfaction at work. The expectation that an organization should adapt to individual needs is growing. Advice abounds on how to realise personal values at work.[i] Having matured among the echo chambers of social media, many young people come into the workplace with an inclination to discuss political and social issues and the expectation that this will bring positive attention. Meanwhile, plenty of other employees remain reluctant to share their thoughts openly.
As to how to respond to these new pressures, there’s no neat, comprehensive solution.[ii] Companies recruit heads of diversity and charge them with transforming the organisation, but they frequently lack sufficient budget and authority to drive the effort. Another problem is that employee expectations are growing so exponentially that slow and steady progress on issues of inclusion and responsibility can feel more like backsliding. Where inequities are recognised, there is agreement on erasing them, but views differ markedly as to an acceptable timeline and how drastic remedial measures need to be.
HR in the C Suite
When I ask students how companies should address these pressures, they tell me that they would like to see Human Resources departments that are far more empowered, independent, and effective. There is widespread frustration that HR teams “just exist to protect the company” and with hypocrisy, mixed messaging, and lack of support in the face of bullying, harassment, and recrimination from senior leadership.
My students believe that heads of Human Resources belong in the C Suite, and they often suggest a direct reporting line to the Board of Directors. Many propose recruiting an independent ombudsman function to help support worker rights, and many support unionisation. Repeatedly, they express confusion that the Human Resources function isn’t more elevated and impactful, especially given how important perceptions and culture are to commercial success these days.
More broadly, there is a thirst for a new style of leadership. Leading today is far less a matter of setting direction and telling people what needs to be done, and far more about creating conditions in which decisions can be made and action taken promptly. An article in 2020 asked whether it is “time to retire the title of manager” now that team leaders are expected to act more as coaches and influencers.[iii] In practice, leadership can no longer function mainly as a means of control and delegation but must experiment and adapt to constant change.
An end to the hierachy
Even as they are recruited, CEOs are being called on to care more about the welfare of their stakeholders. An academic study published in 2021 after seventeen years of research showed that listening, empathy, and persuasiveness have become far more valued qualifications in C-suite job descriptions and recruiter checklists.[iv] These traits are particularly prized at the very companies where intangible value and network influence first became paramount: big, information-intensive enterprises with firsthand experience of the limitations of hierarchical management. In an era of dissolving corporate boundaries and intangible value, an ability to tap into and leverage influence has become indispensable. So have familiarity with – and competence at handling – pressures regarding social responsibility and diversity, equity, and inclusion.
This has powerful implications for how we seek to attract and retain younger employees.
Employees are becoming more activist and angrier about poor culture, harassment, and lack of commitment to sustainability, frequently because they feel that the compliance, HR, and ESG functions lack answers to their questions. They want leaders to examine and manage their companies’ impacts on the world, and they want their role models to exemplify sustainability, ethical conduct, and to act as mentors, rather than barking orders from the top. This requires rethinking how we recruit, reward, and promote our people. And it requires reframing our traditional notions of how a leader looks, sounds and behaves.
[i] Kristi Hedges, “How to Tell If a Prospective Employer Shares Your Values,” Harvard Business Review, October 12, 2020, https://hbr.org/2020/10/how-to-tell-if-a-prospective-employer-shares-your-values.
[ii] Jeff Green, “CEOs Who Are All Talk and No Action on Inclusion Still Benefit,” Bloomberg, January 19, 2023, https://www.bloomberg.com/news/articles/2023-01-19/-diversity-washing-funds-can-aid-companies-even-if-they-don-t-improve-hiring.
[iii] Adam Bryant, “Is It Time to Retire the Title of Manager?” strategy+business, January 30, 2020, https://www.strategy-business.com/blog/Is-it-time-to-retire-the-title-of-manager.
[iv] Stephen Hansen et al., “The Demand for Executive Skills” (NBER working paper, Cambridge, MA: National Bureau of Economic Research, June 2021), https://doi.org/10.3386/w28959.
