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The increasing role of values and purpose in leadership

After the great resignation in 2021, we heard a lot about quiet quitting in 2022. Deloitte identified the great resignation and the desire for worker agency in 2021, a trend that has yet to go away. While "the ratio of engaged to actively disengaged employees is 1.8 to 1, the lowest in almost a decade." Meaning means that "quiet quitters" now make up at least 50% of the U.S. workforce.

McKinsey's work on the "Great Attrition" highlighted five stereotypical individuals: the traditionalists, the do-it-yourselves who want autonomy; the caregivers at home but wanting more engagement; the idealists – value-driven individuals; and the relaxers. How individuals feel about workload-related stress and toxic management cultures significantly determines where they fall in these categories.

What stands out across the various workforce reviews and articles discussing 2023 leadership trends is an emphasis on building trust with employees, colleagues, and partners. As McKinsey found, it's important to ensure that companies are rewarding loyalty and building capabilities, rethinking the corporate culture to build more psychological safety in the workplace. Unfortunately, there is a gap between the perceived challenge and understanding what to do about it. Deloitte's 2023 workplace trends report finds that "80% of leaders feel that worker agency is important to the success of their business, but only 20% feel ready to address it".

The question is, what to do about it? From conversations with friends and clients in leadership positions, the importance of creating engagement emerges as a key step. These changes go beyond the discussion of leadership as purpose driven. Connecting with intention, focusing on communicating the values and purpose of what you are doing, is increasingly seen as key to getting the most out of people. Flip around, and this trend may well play out into creating healthier, less competitive working environments. Experiments with four-day work weeks are being piloted, as are companies creating space for employees to engage in different ways aligned to their and company values. Changing the environment will require organisations and individual managers to challenge existing frameworks while communicating new ones.

Building trust requires psychological safety. Trust develops from consistently demonstrating individual and organisational values and clearly communicating how your organisation will function. The influx of Gen Z into the workforce, and millennials with different expectations and values from previous generations, mean that hybrid working isn't a perk; it's a reality. Remote working – which by nature requires a high-trust environment – is something most people want to maintain if they can.

Yet, EY found in a survey of 5,000 workers in Brazil, China, Germany, the U.K., and the U.S. 82% felt isolated at work. Building trust and finding a balance between what is right for the organisation and for individuals will be a critical challenge in 2023 and beyond. We can expect more experiments with ways of providing individuals with greater agency and choice—demonstrations of trust and more emphasis on organisational values.

Leadership in 2023 will increasingly need to be based on a foundation of clear values people are willing to follow. Leading in a way that's authentic and transparent, with actions aligned to expressed values, has always been and is now growing in importance – with staff voting with their feet when they don't see alignment between the values and actions of individuals in leadership positions.


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