Stewardship: Balancing profit and purpose

Rajeev Peshawaria:
These steward leaders are not selfless saints. They have personal ambition and they want profit and growth just like everybody else, except that they make a choice. They make a choice to achieve their success either by directly addressing environmental or social challenges, or at least by running their business and their life in a responsible way that is net positive to humanity.

Patrick Viljoen:
Welcome to the In the Black podcast. My name is Patrick Viljoen, ESG lead at CPA Australia. Today, we're exploring a topic that sits at the heart of leadership, business, and our responsibility to future generations, stewardship. In a world often driven by short-term results, stewardship asks a different question. How do we create lasting value for people, organisations, society and the planet? It's about leading with accountability, balancing stakeholder needs, and leaving things better than we found them.

Joining us today is Rajeev Peshawaria. Rajeev is the CEO of Steward Leadership Institute and an internationally recognised author, speaker and leadership expert whose work has challenged executives around the world to rethink the purpose of leadership and the role of values in driving sustainable success. Rajeev has spent decades studying leadership, purpose, ethics and organisational performance, helping leaders move beyond profit as the sole measure of success and to embrace a broader responsibility as stewards of people, resources and the future. Rajeev, thank you for joining us today.

Rajeev Peshawaria:
Thanks, Patrick, for having me. It's a pleasure.

Patrick Viljoen:
Now, maybe just to start off, Rajeev, you often speak about leadership as a responsibility rather than a position. My question to you would be, how do you define stewardship and why is it becoming such an important leadership mindset today?

Rajeev Peshawaria:
Patrick, stewardship is probably one of the most misunderstood terms. I like to ask my audiences when I'm speaking live as to when you think of the word steward, what comes to mind? Most people come up with a picture of a caretaker or a service provider. To some people, stewardship is a biblical term and they go all the way there. So we prefer the term steward leadership.

And we say that steward leadership is the genuine desire and persistence to create a collective, better future, both for society and for stakeholders. And these steward leaders are not selfless saints. They have personal ambition and they want profit and growth just like everybody else, except that they make a choice. They make a choice to achieve their success either by directly addressing environmental or social challenges, or at least by running their business and their life in a responsible way that is net positive to humanity.

Patrick Viljoen:
No, I love that point that you made. They're not selfless saints. And this is something within sustainability that always crops up is what are we actually trying to do? And it has to be framed against the economic construct that we actually operate in. So I'm glad you raised that point.

Rajeev, I'm just shifting a bit, but if we're thinking about the way that organisations operate, there's obviously this balance that needs to be struck in between a short-term focus, so things like quarterly results and that being fed back to management, and then there's the longer term focus, which is being taken by a steward leadership kind of approach.

If you had to give advice to listeners of this podcast, how do you actually balance between those two things and how do you move into that steward leadership kind of mindset?

Rajeev Peshawaria:
Great question, Patrick. A lot of people think when they talk about sustainability and steward leadership or stewardship blanket statement that short-termism is bad, short-term opportunities are bad, you must only think long-term.

I don't think that's absolutely accurate. Businesses exist to make money. And as long as you are taking advantage of short-term opportunities, and they come about in our personal life and in our professional lives, there is nothing wrong with that as long as it does not jeopardise consumer trust and your ability to stay in business for the long haul.

So saying blanketly that short-term is bad and long-term is good, no. Take advantage by all means as long as it doesn't jeopardise your long-term prospects. Think in the long-term. Steward leaders think today or act today with tomorrow in mind.

Patrick Viljoen:
Yeah. And I think, Rajeev, the first time we had a conversation, I think this is where we basically landed as well. It's not about saying that capitalism is wrong or trying to replace it with a new system. It's basically saying for every dollar that you make, what is that dollar actually creating in broader value? So it's not detracting from profit and loss statements or the balance sheet in any given way, shape or form.

Rajeev Peshawaria:
Yeah, I remember that conversation. You made that point very well that day.

Patrick Viljoen:
In terms of moving into action, so sometimes we set these kind of aspirations, strategic kind of views about what we need to do for the future, you've written extensively about purpose and values. What kind of advice would you give to leaders to ensure that steward leadership isn't just an aspiration, but it actually informs difficult decisions and particularly when there are competing priorities and pressures within the organisation?

Rajeev Peshawaria:
Steward leadership at the end of the day is about doing well by doing good. So businesses exist to do well. Individuals, we all desire personal success, fame and fortune. So steward leaders basically want to do well like everybody else.

And if you look at the history of wealth creation, whenever an entrepreneur was able to put their finger on the biggest pain points of society at a given point of time and find profitable solutions, ultra amounts of wealth was generated. Think about people like Andrew Carnegie, Rockefeller, Vanderbilt, Henry Ford. All of these people were solving a pressing problem of society at the time. And because they found a profitable solution, they were able to make ultra amounts of wealth. And that's what steward leadership is.

Steward leaders think that, yes, I want to be successful, but I want to be successful by solving a pressing problem of today. Or at least I want to be successful by conducting my business in such a way, in a responsible way that it is net positive. I may not be directly addressing an environmental or social challenge. I may be running a hotel, for example, but I'm going to run the hotel in such a way that it is net positive for the planet and people.

Patrick Viljoen:
And it's a really good point you raised there again. And I think sometimes we lose sight of that. Why do businesses exist? They don't operate in a vacuum. Businesses exist to satisfy a particular need that consumers might have.

So it's always bringing it back to that fundamental reason as to why businesses actually do exist. Moving from sort of the C-suite level, so once we have that level of aspiration set, you get your leaders across what steward leadership actually means.

If we cascade that one level down, what practical steps can leaders take to create a culture within the organisation where stewardship is embedded throughout rather than being limited to the executive team?

Rajeev Peshawaria:
Yeah. So let me tell you a couple of stories. Your question reminds me of them. So a few years ago, United Airlines was handling a short-haul domestic flight in the United States and it was overbooked. And the staff there basically gave the same standard formula. Here's $400 as a reward and you can take the next flight. Who wants to leave voluntarily? That day, nobody left voluntarily.

You may have seen that video. And what happened? Nobody left that day. And then the rule book says, pick somebody at random and throw them out. So they picked up this guy called Dr. David Dow and said, sorry, sir, you're Mr. Random today, leave. He refuses to leave and then as the video shows, they beat him up and dragged him out of the plane in a bloodied state. Even though he said, "I have a medical emergency. I need to get on the other side, get somebody else."

Now, contrast this with another story. The Tata group in India. In 2008, there was a terrorist attack in Mumbai. You may have heard about that. And in the Taj Hotel, which is the Tata property, people were having dinner or guests were staying in their rooms and suddenly a bunch of guys with machine guns started spraying bullets all over the place. Now, none of the Tata group or Taj Hotel employees fled for their own lives that night.

In fact, they made human rings around their customers, took bullets, some of them took bullets in their chest to protect their customers. So you contrast these two stories, what's the difference? In the former case, in the case of United, the values were just posters on the wall. In the second case, the values were a way to live. It was culture in the making for 156 years. So what is culture? Culture is your company's values in action or inaction.

So in action, two words and inaction, one word. And that's the difference. How do you build such a culture? It wasn't by coincidence. Neither of those two cases are by coincidence. There's two things you have to do to build that culture. One, walk the talk, walk the talk, walk the talk. Senior leaders have to walk the talk and the people below will see what actions are rewarded here.

Secondly, leaders must take time to understand and create incentive systems that reward good behaviour in accordance with the values and punish bad behaviour that is against the values. Those are the two things you have to do. Walk the talk and align your incentive systems the right way with the values.

Patrick Viljoen:
Yeah. And that's a really valid point. I think recently I had a conversation in the organisation where somebody actually mentioned be the change that you want to see. So it's not something which is external to you. It's actually something which is driven internally about how we pivot into that new way of thinking. And sometimes the change doesn't come from outside of you.

It's actually driven by you doing something different and committing to acting in a different manner. Rajeev, there's been a growing discussion about serving employees, customers, communities, shareholders, and then ultimately the environment. And this is also against the backdrop of increasingly volatility within the world, which is forcing businesses to act in particular cases in a particular manner. How do you think leaders can balance these stakeholder interests without losing focus or accountability?

Rajeev Peshawaria:
It's a misnomer that there is a conflict between purpose and profit. It's a misnomer that there is a conflict between societal needs, planetary needs, and organisational profit. We need to understand this clearly. Everybody's obsessed with geopolitics these days, with geoeconomics or with climate change or with social inequality. Pick your existential challenge and people are passionate about something or the other.

But there is another megatrend that has been silently developing that people don't understand as much. I call it the naked economy. What's happening is everybody today has a weapon of mass destruction, a smartphone, a super computer in their pockets. So six billion people are connected to the internet. Combine that with the power of AI, and today everything is radically transparent. Nothing is hidden. Here's the crux. For 200 years, businesses have made money by hiding information. Information asymmetry was a competitive advantage. Those days are over.

Today, if you want to remain in business and remain profitable and continue to grow, you have to operate in this radically transparent economy where everybody's watching, cannot hide anything anymore. So think about the fact that the more you do for society and environment, the more trust you're going to get because trust is going to be the only competitive advantage in this radically transparent economy. And by doing the right thing by planet and people is the only way to keep gaining and retaining that trust. So this whole idea that sustainability is a cost, it's a compliance exercise, it's an unnecessary headache, think again because today AI sees everything and connectivity exposes everything.

Patrick Viljoen:
I like the way you phrased that. And it brings to mind this whole concept of democratising information doesn't only have benefits. It does need consideration because to your point, everything's open and everything's available and it's how we engage with this whole new swathe of information that's actually out there for us to not only absorb, but also to understand and act upon. Maybe just shifting away from leaders that are in incumbent positions and looking towards the next generation, what qualities do you see in emerging leaders that gives you confidence about the future of steward leadership? And where do you believe they still may need some development?

Rajeev Peshawaria:
I think it's hard to generalise, but I see most young people today care more about meaning than about money. My generation grew up, if you were in the West, you grew up in the post-Depression West. If you were in the East, you grew up in post-colonial East. Either which way for the baby boomers and for Gen Xers, financial stability was the most important criteria.

You needed a way to earn a living that gives you maximum financial benefit no matter which industry, et cetera. We didn't think about why. I think today's generation thinks about why before the what. So that's why I am optimistic. What can they do? Well, they have to decide. Steward leadership is a choice. It is a choice to do well by doing good. It is not asking you to sacrifice self-interest. It is a choice just to do well by doing good.

So is steward leadership for me? And if it is, am I willing to live by five stewardship values? Because if you're a steward leader, you believe in five stewardship values. You believe in interdependence, that my success is intertwined with that of society and vice versa. You think long-term view, something we talked about a few minutes ago. We think about ownership mentality, that I take ownership to either directly address today's existential challenges or at least run my life in such a way that is net positive. Creative resilience.

Doing business and running my life the steward leadership way is going to need innovation, innovation, innovation. And I will not give up no matter how many times I fail. And finally, you have to upgrade your understanding of integrity. To most people, integrity is legal integrity. It's not against the law. No, you need to practise ethical integrity, which is even though something is not illegal, what are going to be the implications to people and planet?

So first, is steward leadership for me? Then you ask, am I willing to live these five values? And thirdly, look for which problem you want to solve and keep innovating. And until you find the right profitable solution, that's what it is. And doesn't matter how many times you fail, doesn't matter how small your impact is, because as they say, every drop makes the ocean.

Patrick Viljoen:
Yeah. And I agree with that. And just reflecting upon us as an organisation and as a professional body, I think members will know this, but on our coat of arms, the motto actually is one word and one word only. Integrity.

Rajeev Peshawaria:
Integrity.

Patrick Viljoen:
And that's what it actually boils down to as well. Rajeev, maybe just the last question. Listeners who may not hold formal leadership positions in the kind of organisations that they operate in, what are some practical ways individuals can embrace steward leadership in their daily work, but also in their personal lives?

Rajeev Peshawaria:
Well, so you've touched upon something very important here. In the world of AI, you see the traditional corporate hierarchies are going to flatten. There's no question about it. So the whole definition that leadership means you are managing a whole bunch of people, hundreds of people, I think that notion is going to change quite considerably. And so therefore we think about steward leadership as a very personal thing.

There are two parts to it. Do I transform myself into a steward leader? And then how do I create the culture of steward leadership? The second part we've already spoken about earlier. So personal steward leadership, as I said, it's not about how many people you manage. It's about how you make your own lifestyle choice. So the key question to ask is, if I live on this planet for 80 to 100 years, what will be the net impact of my presence on this planet?

Will I be just a good citizen who did not break the law, got married, had a few children, had a few grandchildren, had a good job, left a small nest egg for my family and died? Or have I left a legacy that my children and my grandchildren can be proud of me for? That this is what my dad or my mom did and left behind in terms of people and planet. You have to ask yourself these questions and then live your life accordingly. And those five values that I mentioned and pursuing a purpose that not just creates a better future for you and family, but also for the wider society. If you start thinking like that, then the ideas will come and then you take one step at a time.

Patrick Viljoen:
Yeah. When you were explaining that before you actually mentioned the word, that's the word that jumped out to me was leaving a legacy, and just thinking about my own personal life, we're all the product of those that came before us. And I'm still to this day very thankful for the sacrifices my parents made in order for me to be where I'm at. So it's also about how can I pay that forward in terms of making sure that those that come after me will have the same kind of quality of life that I am so privileged to experience? Rajeev, thank you so much for sharing your insights with us today.

Rajeev Peshawaria:
Thank you.

Patrick Viljoen:
One of the key takeaways from this conversation is that stewardship is not simply a leadership philosophy. It's a commitment to creating value that endures beyond our tenure, our role, or even in our lifetime as we spoke about legacy.

It challenges us to think beyond immediate outcomes and focus on the legacy we are building for people, organisations, and for the broader society. If you enjoyed this episode, please subscribe and share it with your colleagues and friends in the business community. And until next time, keep leading with purpose, acting with integrity, and thinking like a steward for the future.