Global Leadership Monitor H1 2023

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Organizational resilience—the ability to withstand unpredictable challenges and emerge stronger from them—is needed now more than ever.

Organizations are no longer facing one concern at a time. Instead, they must deal with multiple complex and intertwined issues. And just like turning a Rubik’s cube, progress in one area can quickly undermine progress in another.

So, what’s the secret to boosting organizational resilience? What role does leadership play?

Through survey data from more than 1,500 global board directors, CEOs, C-suite leaders, and next-generation leaders across various industries, we have some answers.

Great leadership creates the foundation for resilience. Here, we set out the key threats to organizational health in the year ahead, how prepared leaders are to face these threats, and the leadership levers that build resilience.

01. Multiple, complex external threats compete for attention

Our research shows that uncertain economic growth and the availability of key talent and skills continue to dominate as top priorities for leaders. When asked to rank the top five external factors that will most impact the health of organizations across the next 12-18 months from a list of 20, 73% of leaders selected uncertain economic growth as their primary concern, an increase of 7% compared to six months ago.

Additionally, 72% of leaders selected the availability of key talent and skills, an increase of 3% compared to six months ago. Although a global recession has not yet officially occurred, many are wary of how the economy will hold up under an increasingly restricted environment and are bracing for continued unpredictability.¹ The anticipation of an economic slowdown, as businesses continue to recover from pandemic aftereffects and supply chain disruptions, has continued to shed light on existing talent challenges—slowdown in productivity and engagement, gender parity in managerial positions, and lack of investment into the future workforce.²

Figure 1. Top external factors impacting business in the year ahead

^{Source: Russell Reynolds Associates’ H1 2023 Global Leadership Monitor, n = 1,523 CEOs, C-level leaders, next generation leaders, and non-executive board directors}

Simmering below economic uncertainty and talent challenges are a wide range of secondary issues, which fluctuate in importance over the years. Leaders are faced with the challenge of setting and executing a strategic agenda while being buffeted by a series of external issues. Some of those threats are relatively entrenched (like competition for talent), while others (like geopolitical uncertainty) are highly volatile. To add further complexity, the array of issues are not independent from one another.

To succeed, leaders must manage across multiple time horizons—taking into account how they build long-term organizational capability or execute a multi-year strategy, while also responding tactically to short-term issues, considering the interplay of all of these factors.

02. Leadership preparedness is highly variable by issue

For each of the external factors respondents ranked as a top-five issue affecting the health of their organization, respondents were also asked to rate how well-prepared their leadership team was to address those issues. Based on data from over 1,500 respondents, we were able to develop a nuanced perspective on both the overall importance of each factor and the proportion of leaders that feel prepared to face them.

Figure 2 illustrates the level of leadership preparedness compared to the priority for each external factor. The top two priorities are set apart on the right-hand side of the graph. Leaders know that these are high-priority issues that need to be addressed, and preparedness is relatively low—only 46% of leaders feel their organization is prepared to address talent challenges, and 59% of leaders feel prepared to face continued economic uncertainty.

Figure 2. Leadership preparedness to address external factor by priority

^{Source: Russell Reynolds Associates’ H1 2023 Global Leadership Monitor, n = 1,523 CEOs, C-level leaders, next generation leaders, and non-executive board directors}

Secondary issues—those slightly lower in priority, but still competing for leaders’ attention, drive additional complexity for leaders. Leadership preparedness for many of these issues, such as technological changes, changes in consumer behavior, policy uncertainty, and return to work/hybrid work implementation hover around 50%. Preparedness for geopolitical uncertainty drops even lower to 37%, demanding even more leadership resources and capabilities on the issue.

Priority rankings for these secondary issues can also be unpredictable—the importance of technological change jumped 10 percentage points in the past six months, whereas changes in consumer behavior dropped 14 percentage points between 2021 and 2022, and has only increased five percentage points between 2022 and 2023. The high volatility of these issues in our rankings over the last two years, coupled with varying levels of low leadership preparedness, threatens organizational resilience. As leaders deal with ever-changing external events, their focus frequently shifts between issues, taxing their ability to make sustained progress on solving critical challenges or pursuing business opportunities.

To understand the overall resilience level of individual organizations, it is important to look at their preparedness across the top factors impacting organizational health.

Even though 55% of leaders feel their organization is prepared to address the top five priorities they have identified for the next 12-18 months, there is still a concerning and sizable proportion of leaders that question their organization’s preparedness.

03. Leadership levers that drive organizational resilience

To understand how leaders can strengthen their organizational resilience, we analyzed how specific leadership levers impact preparedness. To do this, we asked C-suite leaders and next-generation leaders to assess their direct managers—who, by definition, are senior executives, most of whom sit in the C-suite or are the CEO—on a range of competencies, as well as rate them on how effective they are in providing career growth and development opportunities. Our analysis highlighted five leadership levers that differentiate prepared organizations from unprepared ones.

Three leadership competencies that strengthen preparedness

To not only withstand uncertainty, but emerge even stronger on the other side of a crisis, organizations need to have competent leaders at the helm. Our survey data has surfaced three critical leadership competencies that impact organizational resiliency.

C-suite leaders and next-generation leaders who feel that their direct managers are effective in these three key leadership competencies are twice as likely to be at a prepared organization. Despite the importance of possessing these three leadership competencies, perceptions of leaders’ effectiveness are rather dismal. Only 54% of C-suite and next-generation leaders said that their direct managers are effective at creating value through others, 60% said they were effective at navigating uncertainty, and 54% at enabling change and innovation. Given the collective nature of leadership today, even having a handful of leaders in the C-suite that fall short in quality could be detrimental to organizational resilience.

Two leadership practices that impact retention

An important aspect of organizational resilience is ensuring that there is continuity between the current executive team and future, next-generation leaders. High leadership turnover poses a risk to organizational resilience by slowing progress on strategic initiatives and draining critical knowledge and capabilities.

In general, leaders are open to external moves—55% of global leaders say they are likely to move beyond their current employer. However, the quality of coaching, development, and feedback a leader receives dramatically affects the likelihood they are receptive to external opportunities.

It's clear that coaching, development, and thoughtful feedback are crucial to retaining leaders. Yet fewer than half of C-suite and next-generation leaders report that their managers are effective in these two areas—only 45% of leaders say their manager is effective in coaching and development, and only 46% at providing constructive feedback. This introduces significant retention risk.

An internal talent pipeline that contains depth, diversity, and engagement is crucial to organizational resilience; however, this can only be maintained if top leaders invest effectively in coaching and developing the leaders below them.

04. What next? Three steps to strengthen organizational resilience

Invest in top-team resilience

As leaders are faced with juggling multiple expectations and priorities in an uncertain world, it can be easy to focus on their silos, rather than pulling together effectively as a team. Knowing how to collaborate, integrate cross-functional perspectives, and build alignment is key to organizational resilience.

How do you unlock the potential of a high-performing C-suite?

Learn more

Select and develop future fit leaders

The best leaders are able to demonstrate a complex mix of abilities and traits, adapt to changing circumstances, and manage the competition of short and long-term needs.

How do you assess whether your leaders are adept at flexing their leadership style? 

Learn more

Invest in next-generation leaders

It’s critical that leaders are intentional about providing coaching and development opportunities, as well as specific and thoughtful feedback. As next-generation leaders advance in their careers, C-suite leaders must be proactive in partnering with them on their career growth trajectory and identify potential future roles that may be a good fit.

How do you assess whether your leaders are adept at flexing their leadership style?

Learn more

By choosing to effectively invest in key leadership levers, organizations will be able to grow in resiliency and be well-positioned for success, no matter how unpredictable or uncertain the market becomes.

05. Methodology

Every year, Russell Reynolds Associates administers The Global Leadership Monitor, an annual survey of executives and non-executive directors, which tracks key threats to organizational health and leadership preparedness to face them, as well as indicators of confidence in leadership, and leaders' engagement and career aspirations.

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Authors

Joy Tan and Tom Handcock of RRA’s Center for Leadership Insight conducted the research and authored this report.

The authors wish to thank the 1,500+ leaders from RRA’s global network who completed the 2023 Global Leadership Monitor Spring Pulse. Their responses to the survey have contributed greatly to our understanding of leadership in 2023 and beyond.

Learn more about the team

External references

^{1 - Akane Otani, “Wild Quarter for Markets Might Foretell Further Turbulence,” The Wall Street Journal, March 31, 2023.}

^{2 - “Assessing the Current State of the Global Labour Market: Implications for Achieving the Global Goals,” International Labour Organization, March 13, 2023.}

2023 Global Leadership Monitor

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