01. Leadership preparedness to address economic uncertainty continues to fall

Uncertain economic growth remains a top-five threat impacting organizational health, with 64% of leaders selecting it as a top threat. Strikingly, leadership preparedness to address uncertain economic growth continues to fall, dropping 7 percentage points in the last six months. And when compared with last year’s figures, there has been a 16 percentage-point drop in leadership preparedness. At present, only 42% of leaders believe their leadership team is prepared to deal with economic uncertainty.

Even so, while uncertain economic growth remains top-of-mind for leaders, its weight of importance has decreased over time as other key threats like technological change and geopolitical uncertainty continue to move up the leadership agenda and compete for their attention.

02. Leadership preparedness to address the availability of key talent and skills drops significantly

While we've seen some stabilization in the talent market over the last year, the availability of key talent and skills remains a prominent external threat, with 63% of leaders indicating it as a top-five threat impacting organizational health. While it's ranked as the second-highest threat to organizational health globally, it's the number one concern for CEOs in the US.

Moreover, employee turnover in the US is expected to be higher in 2024. Our research shows that globally, 63% of C-suite leaders would consider a career move beyond their current employer—an increase of 7 percentage points in the last year and 13 percentage points in the last two years. Within succession pipelines, attrition is even more likely, with 71% of next-generation leaders saying that they’re likely to make a career move, which is an 8-percentage point increase in the last year and a 14-percentage point increase in the last two years.

Against this backdrop, it’s unsurprising that leadership preparedness to address the availability of key talent and skills has dropped by 8 percentage points in the last six months, with now only 39% of leaders believing their leadership team is prepared to address this threat.

03. The threat of tech changes shows signs of stabilizing

Despite the continued buzz around generative AI, the anticipated impact of technological change on organizational health has stabilized, with 53% of leaders placing it as a top-five threat. This is only a 2-percentage point increase in the last six months. Similarly, leadership preparedness to face technological change remains relatively unchanged, with 54% of leaders feeling that their leadership team is prepared to address this concern.

For some leaders, this is playing out in a stagnating AI journey. Roughly one in three leaders indicated that they have not implemented generative AI at all, which is on par with figures from six months ago. For those who have started this journey, 30% are now in the piloted or implemented phase, an increase of only 3 percentage points in the last six months.

04. Geopolitical uncertainty climbs the leadership agenda

With the war in Ukraine, the ongoing conflict in the Middle East, and 2024 being coined as the ‘ultimate election year', it’s unsurprising that geopolitical uncertainty has climbed the leadership agenda. Some 45% of leaders rate geopolitical uncertainty as a top-five threat, an 8-percentage point increase from six months ago.

When asked about the top-three stakeholders that will most influence their organizational strategy in the next five years, most leaders rate consumers (58%), investors (42%) and employees (41%) as the most impactful stakeholder groups. The importance of regulators is, however, on the rise. In our monitor, 39% of leaders noted regulators as a top-three stakeholder (up 4 percentage points in last year) while 34% believe that government will have the greatest impact on organizational strategy, an increase of 5 percentage points in the last year.

When it comes to speaking out on social and political issues, leaders are wary of raising their heads above the parapet. Only 44% of leaders think organizations should speak out on political and social issues their employees care about, and 54% of leaders say their organization only engages on issues when compelled or encouraged to do so.

05. The impact of increased regulation rises, while leaders’ preparedness to face this threat falls

Increased regulation has had a growing impact on organizational health in the last year, with 43% of leaders rating it as a top-five threat. At the same time, we’ve seen a 10-percentage point decline in leaders’ preparedness to face increased regulation in the last six months, with only 55% of leaders believing their leadership team is prepared to address this threat.

In addition, leaders anticipate that regulators will have a greater impact on their organizational strategy in the coming years, with 39% of leaders selecting regulators as one of their top-three most influential stakeholder groups. This is an increase of 4 percentage points in the last year.

While broadly, increased regulation may be viewed as a hindrance, when asked specifically about AI, there is a demand for greater regulation from leaders. As organizations increasingly embed AI in their products, services, processes, and decision-making, attention is shifting to how data is used by the software, particularly by complex, evolving algorithms. When surveyed about AI regulation, 68% of leaders agree or strongly agree that stronger regulation is needed to ensure the safe use of AI.