History has shown us that serial entrepreneurs trying their hand at politics can fan the fires of sociopolitical friction.
But on the flip side, there are plenty of lessons that entrepreneurs could learn from heads of state. Running a country is often compared to managing a business. Both involve tactical thinking and the ability to make tough decisions for the greater good of an organization. And while success is often defined by prosperity, roles are only sustainable if leaders ultimately put the wellbeing of their stakeholders before their own.
I recently attended the Horasis Global Meeting in Cascais, Portugal, which brings together corporations, leaders from emerging markets and heads of state to consider themes relevant to building a more sustainable future. Based on my experience, here are three lessons I think all business leaders could learn from heads of state:
Understand the importance of diversity in management.
Helen Clark, the former Prime Minister of New Zealand, headed an interesting panel on the importance of diversity and transparency in leadership. Ms. Clark was the second female prime minister of NZ from 1999-2008, the first female administrator of the UNDP, and a close competitor for UN secretary-general — a position that has never been held by a woman.
Research shows that “having more women in elected office fundamentally changes the way that society perceives women — and the way that young women think about themselves.” In an entrepreneurial sense, having more women in leadership positions could cultivate higher-achieving female talent in organizations as a whole. Creating diverse, inclusive organizations needs to start with the leadership team. While diversity is improving, it is doing so slowly. Women now hold 25% of C-suite positions, a 2% increase since 2018. However, only 6% of CEO positions are held by women.
Diverse organizations have proven to not only be more productive but more profitable. However, breaking the glass ceiling is not enough. To move forward, startup founders need to find ways to not only staff but also manage companies in a more inclusive manner. They must also put into place systems that offer a clear path for personal and professional growth. As an example, in my own company, I’ve found it effective to create processes that enable team members to travel abroad for conferences and to mentor at organizations for professional growth.
Take a chance on emerging markets.
Hage G. Geingob, the President of Namibia, advised leaders to recognize the potential of emerging markets. Despite many African states taking significant steps in adopting more business-friendly institutions and systems of governance, Mr. Geingob argued that western leaders still miss out on opportunities in Africa due to the region being under-recognized. Horasis Chairman Frank-Jürgen Richter added in a takeaway that Africa is growing strongly at about 3.7%.
When international entrepreneurs take a chance on setting up their businesses in emerging regions, the positive effects can drive change across whole economies. We’re seeing quite a few government-backed accelerators that are concentrating their programs on foreign startups willing to launch in emerging markets, and the benefits are ample on both sides.
Emerging markets offer access to new talent pools and the chance to build teams in areas that are more affordable and less competitive than more established markets. And as established markets become more congested, venture capitalists are increasingly focusing on emerging regions. If you’re looking into emerging markets, I recommend starting your research on government programs that provide education and access to funding and grants in the region.
Walk the walk to improve inclusion and accountability.
Miguel Pinto Luz, Vice Mayor of Cascais, argued that a disconnect between government representatives and their citizens causes a lack of accountability that impedes meaningful change in terms of sustainability and CSR. He suggested that to start doing things the right way, governments must walk the talk and put systems in place to drive long-term change. The same is true for enterprises.
One method is by improving diversity. Others include developing systems of mentorship and training and encouraging better communication, which can bring whole teams together behind core aims and give team members room to excel. From my experience, as communication is improved between the different levels of enterprise hierarchies, it can, in turn, improve accountability.
In line with Ms. Clark’s opinions, it is argued that if employees are shown a clear path for career growth opportunities, offered the right role models and training, and allowed to voice their opinions and concerns, that sustainability will stop being a buzzword; it will become a part of an enterprise’s values. A practical solution we’ve found for this, in particular with team members working remotely, is to set up specific Slack channels to celebrate shared successes and collaborative efforts.
Meetings such as Horasis are extremely important in bringing public and private players together to reflect on shared problems. In the same way that startups look to each other for advice, it is important that they also look to the heads of states to develop multilateral solutions for problems, which affect us all.