In the last five years or more several businesses and government-regulators have ushered in the emerging multiple-capital scenario of enterprises by adopting the integrated reporting framework. There is also an increasing focus on new systems and culture for integrated thinking and performance, leaving the reporting part to evolve.
It is important to see if this might trigger a fundamental change from the assumption of Finance being the only capital. It would lead to process innovations in many new verticals of ‘ownership, governance, management and future talent’ that will help create and connect new aspirations arising from this broader spectrum of capitals.
A great deal of work is being done on the type of leadership and talent that would be able to firstly comprehend the wide aperture required to generate a shared vision among shareholders and key stakeholders committed overtime.
It is now becoming clearer that we will recognise, organise and create value in terms of human, intellectual, social, relational and others, within one cover of a new form in place of the current ‘idea of the Annual Report’.
While the integrated reporting Framework, principles and codes on Finance have been in place to evolve some of the systemic issues, there will be corresponding changes in the way specialists in the various resource areas or capitals would have to develop a holistic attitude to how each ‘vertical of the capitals’ would be raised,
Today, any initiative such as an employee-training programme, is first and last judged more by its financial implications. The challenge here is not just to appreciate and fortify different capitals by assessments, certifications and labelling of sorts but to approach them positively with meaning and purpose towards what value it generated under each ‘vertical’ For instance, all issues related to human rights or, on another hand, preserving nature will have more intrinsic meanings and purpose, while also have to be economically viable in the long run.
Firstly, present-day leadership models or cases that evolve out of specialists would have to acquire not just a generalist approach but a deeper integrated perspective. When Tata Steel was set up over a century ago in India, the first employee was a social worker to assess and map the deep uncommon grounds at which people lived there. Decades later, Tata Motors was set up in Pune in India after spending years developing what is today one of the finest examples of biodiversity. Integrated perspectives were seen in many such cases. The challenge: How can such leadership and integrated-strategy perspectives evolve by design and system?
Then secondly, when our attention moves under other forms of capitals, one finds that at a certain capital or resource-level, there is much more visible focus in ensuring excellence in equipment, processes, training in competencies and skills; and their various forms of recognition and certification are pursued.
While complexities and compulsions of business admittedly drive these aspects, sadly, much of the talent growing is engaged so much into resource management.
Therefore, the other revolution that will most likely follow is that: these resource managers will have to clearly become value creators to be really called leaders, as it should be assumed that value is intrinsically co-created, shared and sustainable.