In her keynote address at the AGSM 2024 Professional Forum, Professor Betsey Stevenson put her inclusive economist lens on sustainable leadership – and how it can help address even the world’s most complex challenges.
Rising inequality around the world. Climate change and ageing populations. AI rapidly transforming the way we work. The world is facing a multitude of challenges that require considerate, inclusive and sustainable leadership. And according to Professor Betsey Stevenson, creating a fairer economy is a big step toward a more sustainable future.
Stevenson is a professor of public policy and economics at the Gerald R. Ford School of Public Policy at the University of Michigan. She is also a faculty research associate at the National Bureau of Economic Research, a research fellow of the Centre for Economic Policy Research, a fellow of the Ifo Institute for Economic Research in Munich and a member of the executive committee of the American Economic Association.
In her keynote address at the AGSM 2024 Professional Forum, Professor Stevenson urged leaders to think like economists to influence sustainable, inclusive business practices. Here are three key learnings leaders can apply to their own sustainable leadership journeys.
Always anticipate the unintended
Professor Stevenson served as the chief economist of the U.S. Department of Labor and as a member of the Council of Economic Advisers advising President Obama. Through these experiences she has learned that successful leaders must consider the winners and losers of every decision.
“People would come to me with wonderful ideas that might make the world a better place, and my job was to tell them how it would do that, but also to tell them how it might make the world a worse place.”
Professor Stevenson said it’s something that all leaders need to consider if they want to move forward with sustainability in mind.
“Whether it’s in business or in policy, you have to talk about the downside of every decision. You have to consider who gets hurt. Because people always get hurt.”
Professor Stevenson describes this as “unintended consequences” in economics, because while people don't intend for these things to happen, they still do. In such a rapidly changing world, it’s crucial for leaders to be conscious of that truth and consider the real impact.
“Unintended consequences should never be unanticipated. You can look at any decision you're going to make and try to think through how everyone is going to react, how the world could shift and who might be the winners and losers.”
Welcome full visibility through diverse teams
By looking for the costs and benefits, leaders make sure their sustainability initiatives reach further to include the social, economic, environmental and cultural impacts. Professor Stevenson said leaders can gain more awareness of the potential impacts by looking at all sides of the issues they face. And having more diverse voices on your team can help enhance that visibility. She said this at the heart of equity, diversity and inclusion (EDI) initiatives.
“It’s about recognising that our unique experiences give us a different perspective. If you're bringing somebody onto your team who has had a very similar lived experience to you, they're probably going to have very similar interpretation as you – you should look to widen that.”
As a progressive economist, Professor Stevenson is outspoken in her belief that workers in the United States should have the right to unionise. So, when she was asked to sit on the board of rideshare company Lyft, which has faced scrutiny for its lack of basic labour protections for workers, it could have been seen as a tokenistic appointment. But she took the position to voice her alternative perspective. And she advised leaders to seek out opposing voices in their own organisations.
“Lyft wanted me there to show them what they’re not seeing – to be the opposing voice. As a responsible and sustainable leader, you must invite those voices in.”
Finding growth while prioritising sustainability
Professor Stevenson went on to explain that some people are suggesting that more commitment to sustainability means slowing or even stopping economic growth, because we need to stop consuming. But she doesn’t think a halt to economic growth is the answer – we just need to think about how we’re achieving that growth.
“Growth is why we live a better life, and I think we should never forget that,” she said. “But now we need to talk about what growth is. It’s about productivity. About doing more with less. It’s about squeezing more out of a set of resources, not about consuming more resources.”
That’s why Professor Stevenson sees great value in the sharing economy, because it takes underutilised resources and puts them to better use.
“Why did I join the board of a ride sharing company? Because the sharing economy got us to deploy a lot of capital that was sitting idle.”
Be ready and open to the impact of inevitable change
Professor Stevenson acknowledged there is no perfect answer to the challenges of being a sustainable leader. But by inviting opposing voices to the table, leaders can develop more meaningful ways of moving forward.
The extreme rate of change in how we connect, learn and use technology means leaders need to listen harder to find the true need, while acknowledging the presence and influence of their own bias.
“As an academic economist, it pains me to say I'm biased. The whole point of being in the White House was to provide unbiased policy advice. But the truth is, the way I see things and the questions I ask come from somewhere, and that somewhere is my bias, even when I'm doing my best,” she explained.
“Once we accept we're biased, we can make sure we involve people with a wide variety of perspectives and experiences and appreciate and invite people who disagree with us. You need to be open to ideas that run counter to your own intuition.”
Sustainability is about compromise, and Professor Stevenson said leaders should not discount their own moral compass when making good decisions around a sustainable, fair society. By tackling the world’s challenges with a sustainable mindset, leaders give their teams the opportunity to unlock a potential future that is better for all.
“Sustainable leadership is not about giving everybody what they want. It’s about listening and hearing the needs – and finding a compromise that serves both.”
Learn more about studying Sustainable and Inclusive Business at AGSM @ UNSW Business School.