Rajeev Peshawaria
CEO, Stewardship Asia Centre

07 February 2024

I recently went one-on-one with Rajeev Peshawaria. Rajeev is the CEO of Stewardship Asia Centre and the author of the new book Sustainable Sustainability.

Adam: Thanks again for taking the time to share your advice. First things first, though, I am sure readers would love to learn more about you. How did you get here? What experiences, failures, setbacks, or challenges have been most instrumental to your growth? 

Rajeev: I started out as a banker and currency trader. Early in my career, I realized that good leadership was rare. Despite huge investments (billions) in training and leadership development programs, why was the picture of good leadership so bad, I thought. One thing led to another, and I eventually moved to HR to rethink leadership development. I did various HR roles, always in talent/leadership development at several Fortune 500 companies, but my disillusionment with the same old, run-of-the-mill development programs continued. So, I started experimenting with a few different approaches to leadership effectiveness. We designed learning content, performance management systems, and compensation systems that challenged conventional wisdom. Ultimately, with some success in the bag with my crazy ideas, in 2010, I published my first book Too Many Bosses, Too Few Leaders, and decided to branch out on my own so that I could help more than just the company I worked for. I set up my own firm and accepted a position as head of a non-profit development center at the same time.  

More recently, I started questioning Sustainability. Why, despite trillions of dollars in ESG funds, increasing regulations and incentives, were we not making meaningful progress on challenges like climate change and socioeconomic inequality, I wondered. And this eventually led to my latest book: Sustainable Sustainability – Why ESG is Not Enough.


Adam: What do you hope readers take away from your new book?

Rajeev: It is fashionable to criticize shareholder-centric capitalism these days. We need a more inclusive form - stakeholder capitalism, wherein business leaders behave more responsibly towards all sections of society and the environment, they say. But the irony is, we are using the very tools that created irresponsible behavior in shareholder-centric capitalism to now drive responsible behavior. Let me explain:

Shareholder capitalism assumes that business should be motivated by one incentive alone – profit maximization. The argument is simple: Let businesses freely chase profits, and free market competition will ensure consumers get the best quality product at the cheapest price. This was the “invisible hand” theory of Adam Smith. 200 years later, along comes Milton Friedman who agrees, but also propagates some regulation. “The soul responsibility of business is to maximize profits, as long as it plays within the rules of the game, that is to say, without deception of fraud,” he said in his famous 1970 NYTimes op-ed. 

Since then, shareholder-centric capitalism has worked on a system comprising four steps: 

Incentivize -> Regulate -> Measure -> Reward or Punish

The profit maximization incentive coupled with some regulation was to now ensure the well-being of society and the environment. Instead, what we got was widespread fraud, exploitation, and abuse of financial power. It has brought us to the current point where we squarely blame shareholder greed for everything.

Yet, today, we are using the same four-step system to drive responsible behavior. We are incentivizing businesses to go green with cheaper capital and other incentives like tax savings, we are strengthening regulation to protect the environment and society, we require massive measurement and reporting, and we punish or reward businesses based on those measures. What are our chances of success?

No, capitalism is not broken. What is broken is our short-sighted thinking. We are refusing to accept what Albert Einstein told us a long time ago: Doing the same thing over and over again and hoping for a different result is insanity. 

So, the key takeaway from my book is that incentives and regulation will not save us from today’s existential challenges. We cannot keep using the same tools/system that got us here, to get us there. To save planet Earth and humanity, we need a new kind of leadership - Steward Leadership, which is the genuine desire and persistence to create a collective better future for stakeholders, society, future generations, and the environment. 

We found in our global research that the best champions of the Environment and Society do not create win-win-win prosperity because of financial incentives or regulatory pressure. Instead, they do it because they see themselves as stewards of planet Earth and humanity. 


Adam: What do you believe are the defining qualities of an effective leader?

Rajeev: In today’s world where everyone and everything is connected, and everything is transparent, success and failure are interdependent. A leader today is someone who believes firmly in the value of interdependence – the belief that to maximize my own success, I must work equally hard to maximize the success and well-being of others. 

Effective leaders take a long-term view to growth and success. They are willing to forego short-term gains if they interfere with long-term prosperity.

Great leaders take ownership. They accept the 21st-century leadership challenge, which is to find profitable solutions to existential issues such as climate change, socioeconomic inequality, and cyber vulnerability. 

Leaders constantly strive to innovate to create win-win-win prosperity (the collective better future that steward leadership aims to create). They understand that innovative breakthroughs come after multiple failures, but they never give up. They have a tremendous amount of creative resilience.

Armed with values like interdependence, long-term view, ownership mentality, and creative resilience, steward leaders pursue a stewardship purpose - to create a collective better future. They think way beyond self and shareholder interest. 


Adam: How can leaders and aspiring leaders take their leadership skills to the next level?

Rajeev: More than skills, it is a matter of mindset. To take their own leadership to the next level, they must understand that if we don’t address today’s existential challenges, we will destroy our planet and all of humanity with it. 

In the past, pursuing self-interest alone while being a law-abiding citizen was considered ethical. Today, not doing any harm is not good enough. We must proactively do good. So, aspiring leaders must embrace the ideas of steward leadership (the four stewardship values and stewardship purpose) and accept the 21st-century leadership challenge. Once they embark on their own unique steward leadership journey, they can hone their skills as they go, but the key is to get the mindset right. 


Adam: What are your three best tips applicable to entrepreneurs, executives, and civic leaders? 

Rajeev: To be an effective leader in any walk of life, besides adopting steward leadership, the three most powerful habits to practice are: Gratitude, Acceptance, and Forgiveness. Gratitude is about being thankful for what we have and what is good, Acceptance is to recognize reality as it is and take responsibility to change what is not good, and Forgiveness is, well, forgiveness. 

Easy as these sound, they are not the default wiring of the human brain. 

Instead of gratitude, the default wiring of the brain is to constantly worry about what we don’t have and what is not good. In this sense, without realizing it, we proactively look for pain rather than pleasure. 

Finally, the hardest is forgiveness. Most people see forgiveness as weakness, and again, the default wiring makes us want revenge. Contrary to conventional thought, forgiveness requires huge inner strength. 

So, to override the default wiring, these three habits need to be deliberately developed through practice. Not only will this make them better leaders, but these habits also create long-lasting happiness and emotional independence. 


Adam: What is your best advice on building, leading, and managing teams? 

Rajeev: Instill a clear sense of shared values and purpose, and make decisions always based on those values and purpose. Rather than using rules and policies to control the team, empower the team to act according to values and purpose as they see fit. 

This sounds dangerous at first glance, but research shows values-and-purpose-based action is far more powerful (and more in the interest of the organization) than ensuring strict compliance to policies and rules. 


Adam: What are your best tips on the topics of sales, marketing, and branding?

Rajeev: Be authentic. Be different. Work as hard for your customer’s interests as you would for your own. Build a brand reputation around trustworthy value addition.


Adam: What is the best advice you have ever received?

Rajeev: Question conventional wisdom. Create a better future. Constantly innovate. The more you give, the more you shall receive.