1. While familiar pressures remain, leaders’ confidence in addressing economic, tech, and talent considerations is dropping
| | Leaders’ preparedness to address tech change hits 44%-its lowest level to date, down from 64% in 2021. |
Leaders remain most concerned about uncertain economic growth and technological change, with 59% and 57% of leaders naming these as the biggest levers impacting organizational health in the next 12-18 months, respectively. This is followed by the availability of key talent and skills (48%). Global economic shifts continue to dominate the leadership agenda, with uncertainty around geopolitics and policy rounding out the top five leadership priorities for the coming year.
However, leaders’ preparedness to address these issues lags far behind: only 35% feel prepared to tackle talent shortages, dropping 8 percentage points in the last six months.
As preparedness continues to decline on long-standing priorities like tech and talent, organizations may need to re-examine their strategies to ensure they are equipped for persistent, evolving challenges.
2. AI adoption accelerates, but skill gaps remain a barrier to success
| | 88% of leaders believe Gen AI will be a required skill for future C-suite executives. |
Among leaders who listed tech change as one of their top five factors impacting organizational health, 77% view it as an opportunity for their business rather than a threat. However, actually integrating these new technologies into the organization is another story; only one in five of leaders feel that their current organizational strengths actually enable tech change.
AI integration is deepening across organizations, with increasing focus on AI skills, and 26% of leaders already using the technology in their day-to-day workflows. Yet less than half feel confident they have the right skills to truly unlock AI's potential for their organizations.
The biggest barrier? A lack of internal AI expertise, according to nearly 60% of leaders. The stakes are high, with 54% of leaders believing boards will be held accountable if AI isn't properly implemented. As AI continues to move from theory to practice, organizations are discovering that enthusiasm alone doesn’t bridge the skills gap—highlighting the need for deeper capability-building among the top team.
“As AI becomes central to strategy and operations, we’re seeing a growing awareness among leaders that technical capability alone isn’t enough. Bridging the AI skills gap will require a holistic approach—one that pairs technical training with adaptive leadership and cross-functional collaboration.”
Fawad Bajwa
AI Practice Leader and Leadership Advisor, Russell Reynolds Associates
3. Strategic thinking is the most critical skill for leaders
For the first time, we asked leaders what skills they see as most essential in facing these top impacts to organizational health. Their answers reveal a fundamental shift in leadership requirements. Strategic thinking tops the list, chosen by 58% of respondents. Other sought-after skills include decision-making (33%), change management (32%), and innovation, creativity, and resilience (28%).
This highlights a shift away from traditionally hard skills, such as tech literacy (17%) and financial acumen (11%), which were ranked significantly lower. As adaptability and vision become the new keys to organizational resilience, leaders should align on what this means for their organization. This growing focus on strategic thinking may prompt organizations to rethink their succession and development plans, prioritizing leaders who can anticipate change and guide teams through uncertainty.
4. Leaders are more willing now than at any point in the past year to consider opportunities beyond their current organization
Talent mobility is on the rise, with 66% of all leaders saying they're open to making a move beyond their organization, up a notable 6 percentage points in the last six months and nearly the highest it’s been since 67% of leaders said the same in early 2024. While prevailing wisdom suggests that people are hanging tightly onto their roles, our data indicates that leaders are picking their heads up more than in early 2025.
| | 66% of C-level leaders are open to leaving their organization, compared to 57% of CEOs. |
A desire for better organizational culture (38%), different leadership (36%), and a desire to feel more valued by their organization (25%) are among leaders’ top reasons for making a move.
Meanwhile, connection to mission (37%), shared values (36%), and a supportive culture (33%) remain the most critical retention factors. With competition for talent and upskilling on the rise, organizations face both challenge and opportunity in the year ahead.
A growing openness to external opportunities reflects how leadership and culture are shaping career moves, with many leaders prioritizing alignment with organizational values and environment.
5. Organizational optimism is declining, especially around innovation and reskilling
As preparedness to face key organizational priorities drops, leaders are concurrently less optimistic about their organization’s ability to deliver market-leading products and respond to crises. While most leaders remain optimistic about their organization's ability to deliver market-leading products (66%) and respond to crises (62%), confidence has waned over the past six months. Today, only 64% of leaders expect their organizations to perform well in the remainder of 2025, compared to 75% six months ago.
This decline in optimism highlights the impacts of our current polycrisis, the heavy leadership burden of continued uncertainty, and increasing pressure to find, reskill, or upskill employees to meet the new demands of an AI-enabled workplace.
As our recent research found, 74% of leaders believe that their organizations will simply cease to exist without fundamental transformation in the next decade. This stark finding helps explain leaders’ falling optimism—particularly around innovation and reskilling--and signals growing unease as organizations adjust to new pressures and evolving expectations.
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Uncertain economic growth
59%
Technological change
57%
Availability of key talent/skills
48%
Geopolitical uncertainty
43%
Policy uncertainty
38%
Workforce transformation
35%
Changes in consumer behavior
33%
Increased regulation
28%
Cyber threats
23%
Protectionism
22%
Technological change, particularly driven by rapid developments in AI, remains in second place and prioritization is rising, cited by 57% of leaders (compared to 52% six months ago).
Availability of key talent remains a critical area of attention, holding steady at 48%, while geopolitical uncertainty remains prominent at 43%. Policy uncertainty has grown more impactful, with 38% of leaders now viewing it as a top factor impacting future organizational health.