A C T I N G I N T H E P R E S E N T,
SHAPING THE FUTURE:
Leaders in
Unprecedented Times
INSIGHTS BY: MARTIN N. DAVIDSON, LYNN A. ISABELLA,
ANTON KORINEK, MICHAEL LENOX, BIDHAN L. PARMAR,
ELIZABETH A. POWELL, DOUG THOMAS,
RAJKUMAR VENKATESAN AND ANNE TRUMBORE
WRITTEN BY: SEB MURRAY
EDITED BY: CATHERINE BURTON
DARDEN
EXECUTIVE EDUCATION & LIFELONG LEARNING
TABLE OF CONTENTS
2
RESPONSIBLE CAPITALISM
4
SUPPLY CHAIN RESILIENCY
6
CLIMATE ACTION
8
LEADERSHIP KINDNESS
10
RISE OF THE MACHINES
13
A HYBRID WORKFORCE
15
DIVERSITY, EQUITY AND INCLUSION
18
RISE TO THE CHALLENGE WITH DARDEN EXECUTIVE EDUCATION & LIFELONG LEARNING
INTRODUCTION
I
n recent memory, the world has seen profound
changes in almost every facet of business and
society, and the change is ongoing. Though
it’s taken center stage — with good reason
— the pandemic isn’t the only urgent issue
facing humanity. In a torrent of contemporary challenges,
COVID-19 accelerated some changes that were inevitable,
brought the need for others into stark focus and served as a
backdrop for the constant flux of an evolving world.
The business community has a starring role to play in
every major issue of our time, and the opportunities and
risks in each are significant. Taking an active role in shaping
the future is more important than ever as leaders navigate
and co-create the “next normal.”
Whether we will have the Roaring ’20s or the Groaning
’20s remains to be seen, but strong leadership will be essential as companies learn from the past, confront urgent issues
head on and plan for the future.
A C T I N G I N T H E P R E S E N T, S H A P I N G T H E F U T U R E : L E A D E R S I N U N P R E C E D E N T E D T I M E S
1
DARDEN
EXECUTIVE EDUCATION & LIFELONG LEARNING
RESPONSIBLE
CAPITALISM
I
n recent years, many companies have been
jettisoning the shareholder primacy model
and have instead been embracing the stakeholder model of capitalism, in which they seek
to create value for all stakeholders, including
employees, customers, suppliers and wider society, while
delivering financial returns to shareholders. Some firms even
put purpose above profits, or at least believe that they are
inextricably linked.
Yet while those recent years saw more interest in
responsible capitalism than ever before, those promises
on stakeholder value are now being put to the test as the
COVID-19 pandemic scars economies across the globe. “It’s
easy to stand for what you say you stand for when you’re
flush with cash and things go your way,” says Bidhan L.
Parmar, Darden’s Shannon Smith Emerging Scholar
in Business. “But when the chips are down, do you honor
your word?”
He sees the current mixture of tensions as the acid test
for companies’ commitment to the stakeholder model. Those
tensions include matters of health and safety, the stresses
that accompany pandemic life, and issues of justice and
equality, all of which touch the workforce and the workplace
— even a virtual one.
Some businesses have stepped up and taken better care
of their employees. Other companies have faced tough
choices in cutting costs to shore up the bottom line. Executing those hard decisions with respect and communication
can have a massive effect not just on assuaging concerns, but
on the future of those companies. “As long as the process is
fair and people understand why decisions are made, they are
able to tolerate those cuts better,” says Parmar. “If there is no
justification given, then stakeholders rebel.”
In other cases, shortages of qualified workers have
constrained business growth. “Clearly, one thing coming out
of COVID-19 is that companies are vying for top talent.
People trapped in jobs they didn’t really like are saying: Life
is short, and we need to spend time doing things that are
worthwhile,” he says. “It’s a draw for talent when companies
embrace the idea that all stakeholders matter.”
Another driving factor of company behavior is pressure
from investors who are allocating far more capital to companies with strong environmental, social and governance
(ESG) credentials and divesting firms with poor ESG
“It’s easy to stand for what you say you stand for when
you’re flush with cash and things go your way. But
when the chips are down, do you honor your word?”
BIDHAN L. PARMAR,
Shannon Smith Emerging Scholar in Business
Associate Professor of Business Administration
A C T I N G I N T H E P R E S E N T, S H A P I N G T H E F U T U R E : L E A D E R S I N U N P R E C E D E N T E D T I M E S
2
EXECUTIVE EDUCATION & LIFELONG LEARNING
DARDEN
records. “Stakeholder groups are becoming more powerful,
and they believe companies can do good and do well at the
same time,” Parmar says, emphasizing the fact that doing
good for the world and doing well financially do not have to
be mutually exclusive phenomena.
This belief is held by another group of stakeholders, too:
“Customers are looking at the ESG record of companies
when they make purchase decisions. They are holding corporations to account more than ever before,” Parmar notes.
Some businesses and plenty of politicians see this moment in time as a chance not just to rebuild the economy
after coronavirus but to build it back better and greener than
before. “It is a fantastic opportunity,” says Parmar. “Companies that can use this energy will be in a great position to
move forward.”
The first step is to unearth a firm’s wider purpose beyond
profits, he explains, and then embody those values authentically in terms of processes and products or services.
“Responsible business — people sometimes think about
this as a kind of corporate PR, a way to mask poor practices
elsewhere in the value chain,” he says, offering the example of
“greenwashing,” when a company presents itself as environmentally responsible without fully living up to the promise.
Indeed, companies that want to embrace responsible capitalism are confronted with plenty of hurdles, not least the
challenge of measuring something as vague as purpose. “Organizations need to get good at collecting data and having
a diversity of perspectives,” he says. “That underlying way in
which managers work together to come up with a hypothesis has to be strong for this trend of responsible capitalism
to continue.” He underscores the risk that what doesn’t get
measured doesn’t get done: “When managers take shortcuts,
it’s easy to fall back on the shareholder value maxim, as it
simplifies the world.”
One area of contention with some shareholders has been
dividends, with many companies slashing payouts in the
pandemic. In past economic downturns, these payments
tended to quickly recover, but Parmar predicts that coronavirus has catalyzed a more permanent shift in how companies
are spending their free cash flows. “Each of these outlays of
cash has to be connected to a logic, which says this is how we
can better serve all our stakeholders.”
This is not about a choice between impact or income; he
highlights a growing body of research showing that companies with stronger ESG scores tend to outperform others
financially.1 “There is an increasing amount of research that
shows in certain contexts at certain times there is a connection between taking care of stakeholders and making profit.”2
Leaders of companies are being called upon to address
issues far beyond the confines of the corporate world and
step into society’s thorniest debates, from immigration to
LGBTQ rights. Will leaders of business take the improbable opportunity handed to them to make a positive impact
on the world?
“Ultimately, each of these large institutions of society,
government and business has to do its part,” says Parmar.
“No one institution can make up for another institution
that isn’t pulling its weight. While business is feeling some
of that pressure, it has to be a collective effort if we are to
deliver on the promises of stakeholder capitalism.”
Bidhan L. Parmar
SHANNON SMITH EMERGING SCHOLAR IN BUSINESS
ASSOCIATE PROFESSOR OF BUSINESS ADMINISTRATION
Executive Education Programs:
Certificate in Data Science for Business Strategy
Collaboration and Influence
Managing Individual and
Organizational Change
1 Tensie Whelan, Ulrich Atz, Tracy Van Holt and Casey Clark, “ESG and Financial Performance: Uncovering the Relationship by Aggregating Evidence From 1,000
Plus Studies Published Between 2015–2020,” report by Rockefeller Asset Management and the NYU Stern Center for Sustainable Business, February 2021,
https://www.stern.nyu.edu/sites/default/files/assets/documents/NYU-RAM_ESG-Paper_2021%20Rev_0.pdf.
2 Witold J. Henisz, Sinziana Dorobantu and Lite J. Nartey, “Spinning Gold: The Financial Returns to Stakeholder Engagement,” Strategic Management Journal
35, No. 12 (December 2014): 1727–1748, https://doi.org/10.1002/smj.2180.
A C T I N G I N T H E P R E S E N T, S H A P I N G T H E F U T U R E : L E A D E R S I N U N P R E C E D E N T E D T I M E S
3
DARDEN
EXECUTIVE EDUCATION & LIFELONG LEARNING
SUPPLY CHAIN
RESILIENCY
T
he COVID-19 crisis exposed the fragility
of global supply chains. It was the perfect
storm; a global stressor, the pandemic
meant halts and delays to manufacturing
and transport, closed borders, heightened
geopolitical tensions and workers stuck at home.
Coronavirus was not the first shock to global supply —
many industries were hit similarly hard after the 2011 Japanese earthquake and tsunami, for instance — and it won’t
be the last. But it does strengthen the case for bolstering
continuity of supply of crucial components.
Companies have for decades chased the holy grail of
ever greater efficiency, sacrificing resilience and robustness.
Executives have searched for the most cost-efficient ways to
service the final market, with labor cost arbitrage and local
specialisms creating a fragmented global value chain.
Doug Thomas, the Henry E. McWane Professor of
Business Administration at the Darden School, argues
that executives’ focus must shift to balance the historical
commitment to efficiency with a renewed commitment to
resiliency. “Intentional action led to historical cost efficiencies as well as the vulnerabilities that are being exposed by
COVID-19,” he says.
Take the shortage of computer chips that car plants
rely on to make infotainment systems, power steering and
brakes. The chips crisis forced automakers to cut production
and is expected to cost the global industry $110 billion, laying bare the danger of relying on “just in time” production.
And that’s not the only way the pursuit of efficiency
at all costs presents risks. Supply chain optimization has
centralized trade flows through key arteries such as the Suez
Canal, Thomas points out, which carries about 12 percent of
global trade. Rerouting vessels around Africa adds substantial time and cost to voyages, but reliance on one route can
be devastating for trade. In March 2021, a skyscraper-sized
container ship was stuck in the Canal for almost a week,
creating a backlog of 422 cargo containers and livestock
transporters.
One response to vulnerabilities has been to source from
more suppliers internationally in order to mitigate supply
chain risk. Thomas sees merit in this method, but he cautions
that it’s not so simple: Diversification could be prohibitively
expensive for companies, especially in complex industries
like auto-making. Even if diversification is affordable, firms
must ensure that the diversification actually mitigates risk.
“Employing two different contract manufacturers on two
different continents may not mitigate risk if a key input to
the manufacturing process comes from only one location.”
“Intentional action led to historical cost efficiencies
as well as the vulnerabilities that are being exposed
by COVID-19.”
DOUG THOMAS,
Henry E. McWane Professor of Business Administration
A C T I N G I N T H E P R E S E N T, S H A P I N G T H E F U T U R E : L E A D E R S I N U N P R E C E D E N T E D T I M E S
4
EXECUTIVE EDUCATION & LIFELONG LEARNING
DARDEN
Another approach to overcoming vulnerabilities has
been to bring production back home, something that politicians are pushing for. In response to issues that arose during
the pandemic, the Japanese government created a $2 billion
fund to help companies examine their supply chains and
potentially reshore or diversify globally, but initial uptake
was low.
U.S. President Joe Biden signed an executive order aimed
at strengthening the resilience of supply chains, including
reducing America’s dependency on foreign states for critical
products like semiconductors and medicines. But Thomas points out that while resilience in these critical supply
chains can be increased, there will always be some dependency on foreign sources for certain inputs: “Some reshoring will make sense, some of it won’t.”
America’s effort to build up national supply chains
reflects rising U.S.-China tensions, dubbed the “new Cold
War.” The cooling of relations between the two economic
superpowers has led some companies to shift from suppliers
in mainland China — which has long been considered the
world’s factory — to other Southeast Asian markets, such as
Vietnam and Indonesia.
“The places that stand to benefit will be developing
countries with governments that are acting to create a conducive environment to attract multinational corporations,”
says Thomas. India launched a $6 billion scheme to provide
short-term subsidies for goods made in the country in an
effort to make the cost of manufacturing more competitive
with rivals, including China.
Thomas notes, however, that some of China’s technical
capabilities and infrastructure give it an edge that is hard to
replicate. “In electronics, unwinding China’s dominance is
hard, as companies have large capital investments that are
hard to move.” He adds that China is a massive consumer
market, and companies may want to manufacture there to
sell as well as to buy goods. And China’s state-sponsored
Belt and Road Initiative continues to build infrastructure
and trading links across the globe.
Thomas says executives are learning to navigate a geopolitical environment that is more hostile to global trade,
as evidenced by vaccine nationalism and Brexit. He expects
political lobbying to intensify among the largest companies
— while geopolitical risks disadvantage the small businesses
that form the backbone of the U.S. economy. They create
two-thirds of net new jobs.
Another aspect of supply chains for corporations to
consider is due diligence when it comes to suppliers, especially into their ESG standards, as governments increasingly
introduce obligations over issues such as labor rights. Even
if selecting suppliers based on ethical considerations raises
prices in the short term, Thomas sees sustainable sourcing
as a competitive advantage, especially with equity and bond
markets, as well as a growing consumer segment, discriminating sharply in favor of companies with strong ESG scores.
This phenomenon is already leading to some difficult
decisions on sourcing, he points out. H&M and Nike have
faced a backlash from Chinese state media and e-commerce
platforms over the companies’ rejection of cotton produced in Xinjiang, the western Chinese region where some
estimates suggest a million Uyghurs have been detained,
sparking a global outpouring of concern.
There is a wider societal consideration when it comes to
thinking about supply chains. Thomas points out that freer
cross-border flows of people along with goods, capital and
information have lifted many hundreds of millions of people
out of poverty, even raising global life expectancy by almost
a decade. Yet globalization has meant stagnant wages and
worsening inequality for many. A mixture of global and local
production seems the most likely way for companies to reap
the benefits of the best of both worlds.
Doug Thomas
HENRY E. MCWANE PROFESSOR
OF BUSINESS ADMINISTRATION
Executive Education Programs:
Introduction to Digital Transformation
The Executive Program
A C T I N G I N T H E P R E S E N T, S H A P I N G T H E F U T U R E : L E A D E R S I N U N P R E C E D E N T E D T I M E S
5
DARDEN
EXECUTIVE EDUCATION & LIFELONG LEARNING
CLIMATE
ACTION
T
he issue of climate change has come into
sharp focus since the Paris Agreement of
2015, which roused multilateral action to
limit the average rise in global temperatures to 2 degrees Celsius above pre-industrial levels. The world’s leading climate scientists warn
that further increase would be catastrophic for hundreds of
millions of people in terms of risk of drought, floods and
extreme heat.
The Paris target has been adopted by most nations and,
in recent years, the pace of action has accelerated sharply.
Economies that account for half of global gross domestic
product have made a commitment to achieve net-zero
emissions by 2050. This is a legally binding target in the
U.K., France and New Zealand, while China, Japan and
South Korea have made similar but not cast-iron guarantees. Meanwhile, in the U.S., President Joe Biden laid out
a $2 trillion plan designed to take climate action and spur
economic recovery.
This is a massive challenge, and net-zero will only be
possible with help from business. Michael Lenox, the Tayloe
Murphy Professor of Business Administration at Darden,
says that rapid progress is crucial, with emissions needing
to fall by 45 percent by 2030 relative to 2010 for a net-zero
future to be viable.
Lenox, who also serves as senior associate dean and chief
strategy officer at Darden, says that success will depend on
greening energy sources, reducing emissions from industrials,
agriculture and buildings, and electrifying transportation.
While conventional wisdom suggests that achieving
climate goals could shave 1 or 2 percent off global GDP,
Lenox presents a more optimistic picture, saying there are
net benefits to the world economy. “This isn’t about hampering global growth; this is about capturing the next wave of
global growth,” he says, in terms of business opportunities
and risk mitigation. One study suggests limiting global
warming within 1.5 degrees Celsius could result in accumulated global benefits of $20 trillion.1
Some progress has been made toward these aims,
especially in the power sector, with a notable reduction in
coal-fired power capacity across the world, excluding China.
In the U.K., the energy sector’s emissions have fallen nearly
two-thirds since 1990. And elsewhere, 17 countries are
legislating for the phasing out of vehicles powered by the
“This isn’t about hampering global growth;
this is about capturing the next wave of global growth.”
MICHAEL LENOX,
Tayloe Murphy Professor of Business Administration
Senior Associate Dean and Chief Strategy Officer
1 M
arshall Burke, W. Matthew Davis and Noah S. Diffenbaugh, “Large Potential Reduction in Economic Damages Under UN Mitigation Targets,” Nature 557
(May 2018): 549–553, https://doi.org/10.1038/s41586-018-0071-9.
A C T I N G I N T H E P R E S E N T, S H A P I N G T H E F U T U R E : L E A D E R S I N U N P R E C E D E N T E D T I M E S
6
EXECUTIVE EDUCATION & LIFELONG LEARNING
DARDEN
internal combustion engine.
But Lenox suggests the gains have been driven more
by market dynamics and less by government policy. “We’ve
seen a substantial reduction in emissions in the U.S., primarily driven by the switch from coal to natural gas — but
that’s driven by commodity prices and natural gas being so
much cheaper because of the fracking boom,” he says, noting a similar scenario in renewables, with the cost of wind
and solar power coming down, making them more competitive with fossil fuels.
Lenox says businesses have a crucial role to play in the
transition to a green economy in terms of innovation and
investing capital and curbing their own carbon footprints.
He says the commercial sector is the engine of innovation that will invent the technologies that will help bring
down emissions, citing electric cars in particular: “This will
be a game changer.” He also notes the importance of companies that are developing innovations such as renewables,
green cement and sustainable agriculture.
“There are huge opportunities either for incumbent companies or entrepreneurs to innovate new tech that can lead
the march to a clean future,” Lenox adds, pointing out that
adoption of such practices by multinational corporations can
lead to downstream pressure for change across the global
value chain. Greater uptake of green technologies might also
help to lower costs in the long run, he adds.
“And, increasingly, you will see the ESG investing
community requesting that companies disclose and mitigate
their climate risk,” says Lenox, highlighting the financial
incentive for climate action. “Consumers are also concerned
about climate change.”
Meanwhile, Lenox calls on companies to commit to
targets such as sourcing renewable energy and electrifying
their vehicle fleets.
They also might find success in encouraging the workforce to maintain habits developed in the pandemic. “When
you get a recession like we’ve had, it tends to lower emissions globally,” he says. “But this has probably bought us
no more than an extra year.” While this is only a minor
reprieve, what would make a difference would be sustaining
practices to which the masses became accustomed.
“Remote working, fewer commutes and less business
travel are all things that could lower the carbon footprint of
businesses,” says Lenox, suggesting these trends will linger.
“There’s also some hope that the crisis has underscored our
shared humanity, and it might lead to greater collective
action on climate change.”
That said, he also notes some thorny trade-offs, including
the threat of fossil fuels becoming economically unviable and
the resulting layoffs and bankruptcies. “We’re already seeing
a bubble burst in fracking in the U.S. These are secondary,
market-driven risks,” Lenox says.
If companies don’t voluntarily move toward net-zero
targets, regulators are likely to force their hands, potentially through carbon pricing, using market mechanisms to
discourage behaviors that lead to carbon emissions — which
could wipe significant value from corporations. Companies
who don’t pursue a net-zero goal also risk reputational harm
and reduced access to the capital markets, Lenox points out.
Moving early to mitigate climate change can bring many
substantial benefits for businesses, especially negative-emissions technologies, Lenox adds. The services sector also
stands to benefit from advising clients on how to achieve
net-zero emissions.
The coronavirus pandemic may have delayed some progress, he admits, but many governments are looking to build
their economies back up in a greener fashion, deploying
funds to assist the recovery based on low-carbon principles.
The need for an acceleration of such efforts is obvious.
A huge amount of work lies ahead, but Lenox is cautiously
optimistic about the future. “It’s going to be really tough. It
will require leadership at all levels and a collaborative effort
between business, civil society and the state.”
Michael Lenox
TAYLOE MURPHY PROFESSOR OF BUSINESS ADMINISTRATION
SENIOR ASSOCIATE DEAN AND CHIEF STRATEGY OFFICER
Executive Education Programs:
Certificate in Business Strategy
Certificate in Data Science for Business Strategy
Introduction to Digital Transformation
A C T I N G I N T H E P R E S E N T, S H A P I N G T H E F U T U R E : L E A D E R S I N U N P R E C E D E N T E D T I M E S
7
DARDEN
EXECUTIVE EDUCATION & LIFELONG LEARNING
LEADERSHIP
KINDNESS
S
ince March 2020 when the World Health
Organization declared COVID-19 a pandemic, a series of cascading crises in global
health, employment, social justice and political divisions has laid bare for many managers
and leaders just how porous the lines between life and work
really are. Each wave compounded the next, leaving many
workers caught in cycles of uncertainty, anxiety and stress.
On a very large scale, this has been a moment of truth for
seeing what’s real and choosing to respond with “business as
usual” or with leadership kindness.
“For many leaders I’ve listened to, the relatively sudden
impact of the lockdown brought to the fore their awareness
of our common humanity,” explains Lili Powell, who holds
an uncommon joint appointment at the University of Virginia’s Darden School of Business and School of Nursing.
From her vantage point as Julie Logan Sands Associate
Professor of Business Administration and Kluge-Schakat
Professor in Nursing, as well as the director of the Compassionate Care Initiative, Powell sees an important opportunity for leading mindfully.
A challenge in any crisis is managing one’s own stress
response and reactivity in order to see clearly and choose
wisely, as Powell explained in her three-part series for
Darden Ideas to Action, “Leading Mindfully: COVID-19
and the Big Human Pivot.”1 Managing oneself with
mindfulness leads to leading mindfully when one employs
similar skills to influence the collective attention of a team
and organization so they, in turn, can make wise choices. As
she wrote in a book chapter, leading mindfully is very much
about showing up with an optimal balance of grit and grace,
in which “grit” represents the focus and determination that
mindful practices foster and “grace” represents the calm and
kindness that compassion practices foster.2
“For many leaders I’ve listened to, the relatively
sudden impact of the lockdown brought to the fore
their awareness of our common humanity.”
ELIZABETH A. POWELL
Julie Logan Sands Associate Professor of Business Administration
Kluge-Schakat Professor in Nursing
1 Lili Powell, “Leading Mindfully: COVID-19 and the Big Human Pivot, Parts 1–3,” Darden Ideas to Action, March–May 2020, https://ideas.darden.virginia.
edu/leading-mindfully-COVID19-and-the-big-human-pivot-part-1.
2 Lili Powell, “Showing Up with Grit and Grace: How to Lead Under Pressure as a Nurse Clinician and Leader,” Self-Care for New and Student Nurses, eds. Dorrie
Fontaine, Tim Cunningham and Natalie May (Sigma Publishing, 2021).
A C T I N G I N T H E P R E S E N T, S H A P I N G T H E F U T U R E : L E A D E R S I N U N P R E C E D E N T E D T I M E S
8
EXECUTIVE EDUCATION & LIFELONG LEARNING
DARDEN
Powell realizes that stereotypically, business leaders have
tended to privilege grit over grace. This even shows up in
common language used in business that suggests that business is about hard numbers and mental toughness, while the
human elements are soft and touchy feely. “In light of recent
crises, leaders I’m working with recognize they need to operate in a more holistic way,” Powell says. “Yet this does not
necessarily come naturally to them. And performance metrics and rewards systems in business often valorize toughness over humanity. So the burning question is whether the
pull toward leadership kindness will be maintained even
after the COVID-19 crisis abates — or whether leaders will
shift back to ‘business as usual.’”
Powell believes that the context for leadership has fundamentally shifted and that a “going back to normal” mindset
would be a mistake. Instead, she sees the opportunity for
defining a “next normal” during which leaders have a chance
to see the shifts that have occurred and intentionally craft
a new blend of grit and grace in their own leadership skills
repertoire, one that fits the new and evolving circumstances.
Powell’s work has concentrated on building and applying
skills of mindfulness, compassion and leadership communication, particularly during high-stakes presentations and
interactions, such as crucial conversations. As she wrote with
colleague Jeremy Hunter, a leader can make micro-moves
in the moment to do the inner work and the outer work of
leading mindfully.3 For example, training in mindfulness
and compassion outside of critical moments can help build
the experiential inner work muscles to notice, shift and respond more mindfully and compassionately in the moment.
These inner moves build capacity to then make skillful outer
moves, such as naming an elephant in the room, reframing
the way to see it and inviting another person to respond in a
new way. With practice over time, such moves can become
second nature and consequently lead to changes in levels of
trust and psychological safety in a team.
“Compassion is a skill, one that individuals can cultivate in themselves, and it can be baked into organizations,”
Powell points out. According to Monica Worline and Jane
Dutton’s Awakening Compassion at Work, compassion skills
exercised at an interpersonal level can be leveraged by baking compassion into organizations through rituals, routines,
structures and systems. Fundamentally, they make a case
for growing compassion as a competitive advantage that
improves a number of measures, such as employees’ sense
of psychological safety and trust, that translate into reduced
levels of burnout, errors and turnover, and increased levels of
productivity, creativity and innovation.4
“The real promise of leadership kindness comes from
understanding that compassion or the lack thereof isn’t just
something that’s interpersonal, but structural and systemic,”
explains Powell. “If we can accept that racism is systemic
and institutionalized, it stands to reason that justice and
kindness can also be systematized. But the challenge in the
short term will be to help individuals see the benefits interpersonally so they can build the capacity to mold teams and
organizations that can follow suit in an authentic way.”
Elizabeth A. Powell
JULIE LOGAN SANDS ASSOCIATE PROFESSOR
OF BUSINESS ADMINISTRATION
KLUGE-SCHAKAT PROFESSOR IN NURSING
Executive Education Programs:
Leading Mindfully
Managing Individual and Organizational Change
3 Lili Powell and Jeremy Hunter, “How to Recapture Leadership’s Lost Moment,” Leader to Leader 98 (June 2020): 51–57, https://doi.org/10.1002/ltl.20519.
4 Monica Worline and Jane Dutton, Awakening Compassion at Work (Oakland, California: Berrett-Koehler Publishers, 2017).
A C T I N G I N T H E P R E S E N T, S H A P I N G T H E F U T U R E : L E A D E R S I N U N P R E C E D E N T E D T I M E S
9
DARDEN
EXECUTIVE EDUCATION & LIFELONG LEARNING
RISE OF THE
MACHINES
F
or decades, popular culture has depicted
artificial intelligence in the context of
a dystopian future in which machines,
typically in android form, rise up and
overthrow the human race.
While AI may take over humans in the movies, in real
life it’s taking over how humans consume movies. Netflix
and other streaming platforms have changed the game on
how viewers absorb entertainment, and such companies
combine increasingly sophisticated algorithms with machine
learning to offer a plethora of tailored content. On the upside, this gives customers a better entertainment experience
than ever before; on the downside, the same algorithms are
used to hook viewers and induce them to binge-watch.
The entertainment sphere offers just one example of
the proliferation of AI in everyday life and business. The
economic base of the postindustrial world is defined by
technology and service industries — and the rapid way
machine learning is changing them — as much as the Industrial Revolution was marked by shifts in manufacturing.
Machine learning is permeating the business world, and all
companies need to be nimble and adapt to new customer
standards of delivery and delight.
These days, consumers expect companies to make their
lives easier by understanding, predicting and delivering preferences they might not even know they have; personalized
customer engagement is the name of the game.
“To survive,” says Rajkumar Venkatesan, Ronald
Trzcinski Professor of Business Administration at Darden,
“companies need a customer-centric, strategic plan for how
to deliver a unique buying experience to every customer at
every juncture of their buying journey — and do it at scale.”
“Machine learning offers a variety of sophisticated tools
that produce deeper customer insights much faster than
any group of humans could achieve,” says Venkatesan. “The
way it works is you use data, AI and algorithms to personalize your company’s acquisition strategy, retention strategy,
growth strategy and even promotion of word-of-mouth
among consumers.” Venkatesan takes note of companies
that have found success and increased customer loyalty
by taking technology even a step further to address needs
a consumer might not realize, both social and physical: Pelo-
“To survive, companies need a customer-centric,
strategic plan for how to deliver a unique buying
experience to every customer at every juncture of
their buying journey — and do it at scale.”
RAJKUMAR VENKATESAN,
Ronald Trzcinski Professor of Business Administration
A C T I N G I N T H E P R E S E N T, S H A P I N G T H E F U T U R E : L E A D E R S I N U N P R E C E D E N T E D T I M E S
10
“The big worry is not simply the fact that jobs are
being displaced, but that the new jobs being created
are not of the same quality with the same kinds of
incomes as before.”
ANTON KORINEK,
DARDEN
EXECUTIVE EDUCATION & LIFELONG LEARNING
Associate Professor of Business Administration
Professor of Economics
ton devotees find a sense of community through its network.
Coca-Cola’s Powerade Command Center evaluates and
then accounts for athletes’ hydration levels, creating unique
formulas that go beyond taste preferences.
Connecting all those dots to execute on market demand
is more than might be feasible under the old way of doing
things, which makes businesses’ adaptation to AI an
imperative.
But that imperative for businesses to adapt comes
with large-scale consequences, and society itself may need
to adapt.
While consumer expectation and business strategy have
changed the way the workforce delivers goods and services
through technology, the other side of the coin is that those
factors are ultimately changing what is needed from the
workforce itself.
“We’re likely to offer the same types of services with fewer human employees in the future,” predicts Anton Korinek,
associate professor of business administration at Darden and
an authority on AI, expressing an opinion shared by other
experts and policymakers. A concern that existed before
March 2020, it has only been exacerbated by the pandemic.
Korinek says that many of the jobs frozen because of
public health measures are unlikely to return after the crisis
ebbs. “The main game has been to change business processes and the delivery of services so that people are not in
immediate physical proximity to each other,” he says. And
customers, he explains, have grown accustomed to the digital services that have replaced jobs.
In the midst of COVID-19, people have made habits
of the kind of convenience that comes with cutting out the
commute and staying home for activities like shopping, exercise, entertainment and dining. Even when venturing into
the world, social distancing has led to more efficiency for the
customer, as people can check into hotels and restaurants
using touchscreens, and health care and other service providers schedule fewer overlapping appointments, in addition
to offering Zoom consultations.
This leaves business leaders facing some tough decisions.
Before the onset of the pandemic, economists predicted an
impending jobs crisis, with consultants at McKinsey, for one,
estimating that 400 to 800 million jobs may be displaced
in the face of automation within the coming decade.1 The
coronavirus pandemic accelerated the inevitable as containment measures shut down hospitality and retail, among
others, industries in which workers are in the most danger
of displacement.
Korinek, who also serves as a professor of economics in
UVA’s Department of Economics, points out that creative
destruction is nothing new, but what’s different about the
present situation is that workers displaced by the process
subsequently face worse job prospects. “The big worry is
not simply the fact that jobs are being displaced, but that
the new jobs being created are not of the same quality with
the same kinds of incomes as before,” he says. “Displaced
workers may be forced to go down the jobs ladder to take
on work that is lower paid, sometimes with poorer working
conditions.”
1 J ames Manyika et al., “Jobs Lost, Jobs Gained: Workforce Transitions in a Time of Automation,” report by McKinsey Global Institute, November 2017,
https://www.mckinsey.com/featured-insights/future-of-work/jobs-lost-jobs-gained-what-the-future-of-work-will-mean-for-jobs-skills-and-wages#.
A C T I N G I N T H E P R E S E N T, S H A P I N G T H E F U T U R E : L E A D E R S I N U N P R E C E D E N T E D T I M E S
11
EXECUTIVE EDUCATION & LIFELONG LEARNING
DARDEN
This danger is not limited to lower-paid positions.
Middle management positions in data-driven, white-collar
sectors of the economy — such as finance, accounting, law
and information technology — are especially susceptible to
more sophisticated automation.
The jobs that are currently under less threat of automation are those that require uniquely human “soft skills” like
planning, people management and strategic decision-making. “What humans are still better at is understanding social
situations and putting things into context,” Korinek says.
“Machines also cannot quite understand all the nuances of
language yet.” Roles that require human traits like empathy, creativity and motivation are the ones that provide an
opportunity to reshape the future of work for now.
In the short term, it would be helpful for companies to
invest in training programs to reskill workers for the jobs
AI is creating. But it’s not necessarily enough. “Retraining
certainly makes a lot of sense and will help a significant
fraction of the workers who have been displaced, but it won’t
be a panacea,” Korinek asserts, calling for concerted policy
action to support the “left behind” regions in poorer areas
that will suffer the most in the extended future. “We should
also make a conscious effort to actively create jobs for the
displaced workers.”
As for the long term, “I do believe that we should prepare for the possibility that at some point there may not
be enough work for everybody to be gainfully employed,”
he adds. “That means making sure that there is a social
safety net so that the left-behind workers will be able to
obtain sufficient benefits and their standards of living
don’t decline.”
The upside of such a scenario is that if machines become
so sophisticated that they can displace human workers on a
large scale, they would also be able to generate an unprecedented amount of wealth that could be shared broadly
across society, Korinek adds. “In the very long run, if machines become sufficiently capable, maybe humans can just
retire and enjoy the fruits of what they have created.”
Rajkumar Venkatesan
RONALD TRZCINSKI PROFESSOR
OF BUSINESS ADMINISTRATION
Executive Education Programs:
Certificate in Data Science for Business Strategy
Digital Marketing Innovation
Introduction to Digital Transformation
Strategic Execution: Achieving Breakthrough Performance
Anton Korinek
ASSOCIATE PROFESSOR
OF BUSINESS ADMINISTRATION
PROFESSOR OF ECONOMICS
A C T I N G I N T H E P R E S E N T, S H A P I N G T H E F U T U R E : L E A D E R S I N U N P R E C E D E N T E D T I M E S
12
DARDEN
EXECUTIVE EDUCATION & LIFELONG LEARNING
A HYBRID
WORKFORCE
C
oronavirus is driving a permanent shift in
working practices, with major corporations
planning for a hybrid approach that sees
employees split their work hours between
home and the office in the longer term.
The employers hope the hybrid model will empower staff
to do focused work remotely, while enabling them to achieve
a better work-life balance. That means workplaces will
probably shrink and become destinations for collaboration,
innovation, networking, coaching, and socializing — HSBC
and Lloyds Banking Group anticipate cutting floorspace by
40 percent and 20 percent, respectively.
But the root-and-branch reform of working patterns is
driven by bottom-up pressures as much as it is by top-down.
Microsoft surveyed 30,000 people from across the globe and
found that 70 percent want flexible remote work to con-
tinue, while 66 percent of business leaders are planning to
redesign office space to better accommodate hybrid work.1
Lynn A. Isabella, the Frank M. Sands Sr. Associate
Professor of Business Administration at the Darden School
of Business, says that companies cannot put the genie back
in the bottle. “We’ve turned a corner, and it’s going to be
hard to go back to the way things were,” she says. “There are
many things people have come to like about remote working, including the reduced commutes that make it easier to
balance their professional and personal lives.”
But there are risks that come with hybrid working.
Potentially, teams and processes could disintegrate as
workers set their own schedules. And in some cases, two-tier
workforces may form, with remote workers left out of decision-making and informal water-cooler conversations.
Complete freedom is counterproductive, argues Isabella,
“We’ve turned a corner, and it’s going to be hard to go back
to the way things were. There are many things people have
come to like about remote working, including the reduced
commutes that make it easier to balance their professional
and personal lives.”
LYNN A. ISABELLA,
Frank M. Sands Sr. Associate Professor of Business Administration
1 “ 2021 Work Trend Index Annual Report: The Next Great Disruption is Hybrid Work — Are We Ready?” report by Microsoft, March 2021,
https://ms-worklab.azureedge.net/files/reports/hybridWork/pdf/2021_Microsoft_WTI_Report_March.pdf.
A C T I N G I N T H E P R E S E N T, S H A P I N G T H E F U T U R E : L E A D E R S I N U N P R E C E D E N T E D T I M E S
13
“In a hybrid workforce, leaders become more like coaches
and facilitators than command-and-control generals,”
LYNN A. ISABELLA,
DARDEN
EXECUTIVE EDUCATION & LIFELONG LEARNING
Frank M. Sands Sr. Associate Professor of Business Administration
who advocates instead for some degree of harmony as the
office becomes more about collaboration than focused work.
“Rather than setting any old schedule indiscriminately, there
needs to be some thought given to ‘community hours’ when
everyone is together, so you can have those kinds of interpersonal connections and managers can ensure accountability,” she says.
In large part, presence and working patterns will depend
on the nature of the individual’s role and how it intersects
with those of colleagues.
There are, for example, specific jobs that need to be performed on-site, including those that need access to specialist
facilities and equipment, as may be the case with scientists
in a lab. Other jobs might be best performed on-site because
of the focus on collaboration, as when marketing executives
coordinate an advertising campaign.
But plenty of roles can be performed effectively from
home, including accountants doing solitary bookkeeping,
software engineers working on code, or call center workers
who follow clearly defined processes and scripts.
Some U.S. banks, including Goldman Sachs and JPMorgan Chase & Co., are bringing workers back to the office
on a permanent basis, arguing that remote work has cost
them clients, but Isabella suspects it’s more about ensuring
compliance in a heavily regulated industry.
There have been attempts to monitor employees, as
companies have access to far larger amounts of personal
information than ever before, but this has provoked a fierce
backlash from employees, who expressed concerns about
“big brother” surveillance.
Monitoring makes little sense to Isabella, who says we
must benchmark employee performance based purely on
output and not input in terms of hours worked: “Time spent
is not a performance measure.”
The design of office space is also going to have to change
to accommodate hybrid work. Pre-pandemic, Isabella says
the trend was open-plan offices for individual work and
meeting rooms for collaboration. That design is likely to
reverse as employees use open offices for collaboration and
those responsible for individual outputs use private spaces
when it’s time for focused work.
“If we want people to collaborate with one another, we
need to put them near each other,” says Isabella. “So the
design of the office is going to have to be taken much more
seriously in the future because of the impact it’s going to
have on interaction between employees.”
The onus will be on managers to make this work. “In a
hybrid workforce, leaders become more like coaches and
facilitators than command-and-control generals,” she says.
“That shift has already started. The focus now is on making
sure people feel psychologically safe and that we appreciate
all members of the organization, independent of where they
come from and where they are.”
Isabella believes that leaders will need to define the contours of the new world of work for everyone’s benefit.
Lynn A. Isabella
FRANK M. SANDS SR. ASSOCIATE PROFESSOR
OF BUSINESS ADMINISTRATION
Executive Education Programs:
Certificate in Corporate Aviation Management
Leading Teams for Growth and Change
A C T I N G I N T H E P R E S E N T, S H A P I N G T H E F U T U R E : L E A D E R S I N U N P R E C E D E N T E D T I M E S
14
DARDEN
EXECUTIVE EDUCATION & LIFELONG LEARNING
DIVERSITY, EQUITY
AND INCLUSION
W
hen a shocking video emerged of the
killing of George Floyd, an African
American man, at the hands of a
white police officer in May 2020, it
triggered a racial reckoning. It also led
to institutions publicly decrying systemic racism, with many
companies issuing messages of solidarity with the subsequent
global protests, led and amplified by the Black Lives Matter
movement. Not only that, but businesses were forced to
confront their own poor records on race, and it became clear
that leaders needed to do more to tackle racial disparities in
their own companies.
They made bold pledges, with corporate America promising to spend $50 billion on racial equity, according to a study
by Creative Investment Research. These pledges were to benefit civil rights groups, targeted investment into communities
of color, and overhauls of internal recruitment and training
programs. Yet only about $250 million has actually been
spent or committed to a specific initiative thus far, igniting
cynicism about the sincerity of the pledges — especially in
the midst of the pandemic, which worsened the financial
outlook for many companies.
“My sense of it is the jury is still out,” says Martin N.
Davidson, Johnson and Higgins Professor of Business
Administration at Darden. “Some companies have taken it
more seriously than others, but a year to create real change is
not a lot of time. Even so, they should at least be laying the
groundwork for sustained progress.”
Time will ultimately tell whether firms live up to their
monetary pledges, and much more needs to change for
companies’ rhetoric to become reality. But Floyd’s murder
certainly sparked a massive effort on corporate diversity,
equity and inclusion.
In the whirlwind of attention around racial issues, companies have taken to the public stage. Some use the power
of their platforms to spread awareness, and some have even
been dragged into political battles — though most prefer
to lobby behind the scenes and stick to broad statements of
principles in public. Change is afoot in supply chains, too,
with companies demanding more responsibility and account-
“You want to have the people you bring in
thrive and advance, unencumbered by biases and
discriminatory policies.”
MARTIN N. DAVIDSON,
Johnson and Higgins Professor of Business Administration
Senior Associate Dean and Global Chief Diversity Officer
A C T I N G I N T H E P R E S E N T, S H A P I N G T H E F U T U R E : L E A D E R S I N U N P R E C E D E N T E D T I M E S
15
DARDEN
EXECUTIVE EDUCATION & LIFELONG LEARNING
“The events of recent years very strongly highlighted
the issue of equity and the importance of embracing it
because it’s the right thing to do. But that rationale is
hard to sustain; there was not enough emphasis on the
business case.”
MARTIN N. DAVIDSON,
Johnson and Higgins Professor of Business Administration
Senior Associate Dean and Global Chief Diversity Officer
ability from their suppliers and outside service providers,
including accountants, law firms and headhunters.
Davidson, however, urges business leaders to address
inequalities in their own institutions first before straying into
public issues. “It doesn’t mean what they have to offer won’t
be beneficial to others,” Davidson says. “But I do think they
should take care of their own houses first before they start
telling other people what to do.”
Some of the world’s biggest companies have indeed been
quick to set hiring and promotion targets, and they have also
been forthcoming with their workforce data, reporting detailed demographic information that has highlighted the lack
of diversity among senior officials and managers in the U.S.
Yet other companies have resisted such disclosures, raising
concerns over their lack of transparency. Regardless, there’s
room for improvement for all of the above.
“It’s clear now the best thing companies can do is create
systems and structures that put in place people and resources
to do the work, and also hold people accountable for getting
the job done,” says Davidson, noting the ascendency of the
chief diversity officer role. “You can also create incentives,” he
adds, with some companies tying executive pay and bonuses
to diversity and inclusion metrics.
Davidson, who is not only on the faculty but also senior
associate dean and global chief diversity officer at the Darden
School, points out that too many companies focus on simply
getting diverse talent through the door and not enough
on ensuring talent development and career progression, a
challenge that compounds the lack of diversity at the top
of organizations. “You want to have the people you bring in
thrive and advance, unencumbered by biases and discriminatory policies,” he says.
Davidson highlights mentorship and sponsorship as
potentially effective policies for nurturing diverse talent,
along with unconscious-bias training for executives. “You
need to create a culture and climate shift by fostering greater
collaboration and having those difficult conversations about
race, gender and other sensitive differences,” he says. “You
also need to coach diverse teams to work well together. These
actions, taken in concert with structural changes, can make a
notable difference.”
For Davidson, finding allies throughout the organization is another key to accelerating progress. “Many people
became passionate and outraged by the Floyd murder, and
with earnest hearts, they said, ‘I am going to step in and do
something,’” he observes. “It’s a very important role, one that
is going to help make this work stick.”
Yet allies can overstep their mark, and there is little understanding about what makes for good allyship. Davidson
offers his insight: “Becoming a great ally means grounding
yourself in your identity as someone with privilege. Another
essential component comes down to fundamental interpersonal interactions, coaching and support skills. The third
piece is the importance of gathering critical information
about these issues.”
“The events of recent years very strongly highlighted the
issue of equity and the importance of embracing it because
it’s the right thing to do,” says Davidson. “But that rationale
is hard to sustain; there was not enough emphasis on the
business case.” It’s important to note that alongside the moral
A C T I N G I N T H E P R E S E N T, S H A P I N G T H E F U T U R E : L E A D E R S I N U N P R E C E D E N T E D T I M E S
16
EXECUTIVE EDUCATION & LIFELONG LEARNING
DARDEN
imperative, the business case for diversity is well-established.1
And diversity in the workplace is hugely beneficial to companies in terms of access to talent, innovation, and creating new
business processes and markets, among other factors.
Clearly, more needs to change to tackle systemic racism
and address racial inequalities in the workforce, and Davidson sees businesses playing an important part on that front.
“What matters most is that companies are uniquely positioned to provide scaffolding and support that allows people
to keep at it,” he says. “That’s the thing that is going to be
most important, because it’s tiring, exhausting work. There
are already conversations about ‘diversity fatigue.’”
Davidson urges businesses and individuals to stay positive
about the future. “There is some backlash and overt racism,
but oftentimes that is as much about getting the poison out
of the system as it is something that is inherently negative.
I’m optimistic that in time we’ll see ongoing, continual
change and progress,” he says.
“I think equity will be achieved; it’s not an if, it’s a when,”
he says. “The momentum for change expands beyond companies and organizations; it’s in the zeitgeist.
Martin N. Davidson
JOHNSON AND HIGGINS PROFESSOR OF
BUSINESS ADMINISTRATION
SENIOR ASSOCIATE DEAN AND GLOBAL
CHIEF DIVERSITY OFFICER
Executive Education Programs:
Managing Individual and Organizational Change
The Executive Program
Women in Leadership
Bank Executive Leadership Program
“I think equity will be achieved; it’s not an if, it’s a
when. The momentum for change expands beyond
companies and organizations; it’s in the zeitgeist.”
MARTIN N. DAVIDSON,
Johnson and Higgins Professor of Business Administration
Senior Associate Dean and Global Chief Diversity Officer
1 S
undiatu Dixon-Fyle, Kevin Dolan, Vivian Hunt and Sara Prince, “Diversity Wins: How Inclusion Matters,” report by McKinsey & Co., May 2020,
https://www.mckinsey.com/featured-insights/diversity-and-inclusion/diversity-wins-how-inclusion-matters.
A C T I N G I N T H E P R E S E N T, S H A P I N G T H E F U T U R E : L E A D E R S I N U N P R E C E D E N T E D T I M E S
17
EXECUTIVE EDUCATION & LIFELONG LEARNING
DARDEN
RISE TO THE CHALLENGE
WITH DARDEN EXECUTIVE
EDUCATION & LIFELONG
LEARNING
A
s the world emerges from the COVID
crisis, business leaders have the
opportunity to shape the recovery in
a way that benefits the economy, the
environment and society. To direct an
organization effectively in these times, leaders need new
technological skills and ethical perspectives.
Led by world-renowned faculty, Darden Executive
Education & Lifelong Learning offers a wide variety of
open programs that help leaders rise to the challenge. With
programs ranging from digital transformation and data sci-
ence to leadership and management, participants can upskill
quickly and grow as strategic leaders.
The Executive Program is for seasoned leaders with 12 or
more years of management experience. A learning opportunity like no other, participants immerse themselves in the
principles of leadership with lively case study discussions
and workshops with Darden faculty, guest speakers and
fellow executives. In-person sessions on Darden’s Charlottesville and D.C. area grounds focus on what drives and
inspires leaders to peak performance. Earn alumni status
and gain a global network through this unique program.
A C T I N G I N T H E P R E S E N T, S H A P I N G T H E F U T U R E : L E A D E R S I N U N P R E C E D E N T E D T I M E S
18
Provided by the University of Virginia Darden School Foundation
CONTACT US
UVA Darden Executive Education & Lifelong Learning
100 Darden Boulevard
Charlottesville, VA 22903
UVA Darden DC Metro
1100 Wilson Boulevard
Arlington, VA 22209
Connect with a lifelong learning team member to find the
right program to reach the next level in your career.
+1-434-924-3000
Darden_Exed@darden.virginia.edu
Darden.virginia.edu/executive-education
Find us on: