In an era of global crises and shifting workforce expectations, traditional leadership models fall short. Julia Binder of IMD Business School explores how systems leadership—a holistic, interconnected approach—can help organizations navigate complexity, align talent strategies with broader goals, and create resilient, adaptive workforces for the future.
With crises like climate change, inequality, and employee burnout on the rise, traditional leadership models focused solely on profit and performance are no longer viable. These challenges demand systems leadership—a transformative approach that embraces interconnected thinking, collaboration, and purpose-driven strategies.
As organizations rethink environmental and governance models holistically, talent strategies must also evolve. A holistic approach is vital for sustainability at large and within HR, where systems thinking can drive better outcomes for people and organizations alike.
What is systems leadership?
At its core, systems leadership is about viewing the organization as a network of interdependent parts rather than isolated functions. It recognizes that today’s challenges—from workforce sustainability to environmental accountability—cannot be addressed by a single department or short-term initiative. Systems leaders look beyond their own organization to engage with external stakeholders, understand global trends, and address interconnected challenges in the wider ecosystem.
Systems leaders are equipped to:
- Break down silos to foster collaborabrtion across teams and disciplines.
- Align organizational goals with broader societal and environmental imperatives.
- Adapt to complexity by embracing flexibility, innovation, and long-term thinking.
This approach requires leaders to move beyond managing their immediate scope of work. Instead, they must focus on building a culture that supports interconnectedness, adaptability, and resilience. By building partnerships with community groups, industry bodies, and policymakers, systems leaders ensure that their workforce strategies are not just reactive, but proactively contribute to a broader, more sustainable future.
Why systems leadership matters for workforce sustainability
Workforce sustainability—the ability to nurture and manage talent for long-term organizational resilience—is one area where systems leadership is particularly impactful. Traditional HR practices often struggle to align with sustainability goals due to siloed thinking and reactive strategies. Systems leadership transforms this dynamic by:
- Creating shared accountability: Systems leaders integrate workforce sustainability into every function, ensuring alignment across all levels of the organization. For example, Siemens’ approach to upskilling cascaded training programs from senior executives to the broader workforce, fostering a shared language and purpose.
- Aligning incentives with long-term goals: Systems leaders recognize that short-term metrics often undermine wider sustainability efforts. By tying KPIs and incentives to sustainability outcomes, such as employee retention or skills development, organizations can align day-to-day operations with future needs.
- Fostering cross-functional collaboration: Workforce sustainability thrives on collaboration between departments such as HR, operations, and technology. Systems leaders break down barriers to ensure these teams work together toward common objectives.
The shift to systems thinking
For years, linear, analytical problem-solving has been the go-to approach. However, today’s challenges are so deeply interconnected that they require a more holistic, systems-based approach. Systems thinking focuses on understanding connections, patterns, and root causes. Take the example of plastic waste washing up on beaches: organizing a clean-up day addresses the immediate issue but fails to stop more waste from washing ashore. Systems leaders look deeper, identifying structural forces like reliance on single-use plastics and advocating for systemic shifts, such as transitioning to a circular economy.
This same holistic approach applies to talent strategies. Traditional HR models often address challenges in isolation—hiring surges, employee retention initiatives, or training programs—without considering how these elements interact. Systems leadership ensures talent strategies are interconnected and aligned with broader organizational goals. For example, rather than upskilling in a vacuum, a systems approach aligns skills development with strategic workforce planning and future business needs, creating a resilient and adaptive workforce.
The skills systems leaders need
Becoming a systems leader requires a shift in mindset and the development of new skills. Key competencies include:
- Strategic foresight: The ability to anticipate trends and plan for future challenges.
- Emotional intelligence: Building trust, fostering psychological safety, and leading through influence rather than authority, enabling effective collaboration.
- Systems thinking: Understanding the interconnectedness of different elements and actors within an organization and identifying root causes of issues, as well as recognizing patterns that influence decision-making and outcomes.
- Stakeholder engagement: Mobilizing internal and external stakeholders to drive collective action and achieve shared goals.
- Cognitive flexibility: The ability to reframe challenges by viewing them from multiple perspectives, zooming out to see the bigger picture, and adapting approaches to address complex or evolving problems.
Examples of systems leadership in action
Organizations that embrace systems leadership are already seeing the benefits:
- Philips: By tying executive remuneration to the percentage of revenue generated from sustainable products, Philips ensures that sustainability goals are integrated into performance evaluations and decision-making.
- Nestlé: Employee activism played a significant role in driving Nestlé’s decision to exit the Russian market during the Ukraine conflict, highlighting the importance of aligning corporate actions with employee values.
- Patagonia: Patagonia has embedded systems leadership across its operations, ensuring that decisions at every level, from supply chain management to corporate governance, align with its mission to promote long-term environmental and societal well-being.
Embracing systems leadership for a sustainable future
The future of leadership lies in systems thinking and holistic approaches. For HR and talent professionals, this means moving beyond isolated initiatives to create integrated, sustainable strategies that align with organizational and societal goals. By embracing systems leadership, organizations can prepare not only to survive but to thrive in an interconnected and rapidly evolving world. Leadership is no longer a solitary endeavor but a collective commitment to building a sustainable and interconnected future.
