Leadership Confidence Falls to Three-Year Low

 

Leaders’ confidence in their executive team has continuously declined over the last three years, falling 5.4 points to a three-year low of 62.5 points.

 

Figure 1: Leadership Confidence Index falls amid major global threats

Leadership confidence in their executive leadership team

CLI timeline
COVID-19 vaccine available​
Dec 2020
67.9
H1 2021
Russia invades Ukraine
Feb 2022
66.0
H1 2022
Global inflation at its highest since the 1990s​
July 2022
65.5
H2 2022
US implements export controls targeting China
Oct 2022
ChatGPT launched​
Nov 2022
63.4
H1 2023
WHO declares end of COVID-19 pandemic
May 2023
64.2
H2 2023
Start of Israel-Hamas War
Oct 2023
60+ countries to hold national elections​
Through 2024
62.5
H1 2024

 

Source : RRA Global Leadership Monitor, H1 2024, n=4,072 CEOs, board directors, C-level executives, and next-generation leaders

Leaders were interviewed during the following field periods: H1 2021=Feb/Mar 2021, H1 2022=Mar 2021, H2 2022=Oct 2022, H1 2023= Mar 2023, H2 2023=Sept 2023, H1 2024= Mar 2024

 

During the three years that we’ve tracked leadership confidence, the world has faced a relentless cycle of multiple, conflicting, and often unpredictable issues. From the conflicts in Ukraine and the Middle East and their destabilizing effects on the world, to inflation, rising interest rates, and the launch of ChatGPT igniting massive interest in generative AI, the leadership landscape has been far from quiet. What’s more, nearly half of the world’s population is set to head to the polls for what many are calling a ‘super election year.’

 

Leaders are taking note. At every level, leadership confidence in their executive team has progressively declined, implying that the executive team’s ability to address this ongoing uncertainty and ever-increasing complexity is waning.

 

 

 

 

quote

Not only are leaders faced with a layering of issues, but they must also contend with rising expectations and scrutiny from a heightened diversity of stakeholders. This provides a huge cognitive and emotional load for today’s leaders.”

Constantine Alexandrakis
President & CEO, Russell Reynolds Associates

 

 

 

The Leadership Confidence Index captures board members, CEOs, C-suite leaders, and next-generation leaders’ confidence in their executive team across three constructs: capability, behavior, and issue management—all of which are in decline. This drop in leadership confidence aligns with data from our recent Global Leadership Monitor, which tracks the top threats impacting organizational health and leaders’ preparedness to face them. In the last six months, leadership preparedness has dropped across all top five threats: economic uncertainty, the availability of key talent and skills, tech change, geopolitical uncertainty, and increased regulation.

 

Unsurprisingly, these issues have consistently appeared as the highest-ranked threats for leaders. But, repeated and long-term exposure to these issues is failing to build leadership resilience. Uncertain economic growth remains a top-two threat for leaders; yet in the last year alone, leadership preparedness to face this concern dropped by 16 percentage points.

 

Confidence in executive team behavior falls the most

 

While confidence has fallen across all three constructs since H1 2021, the biggest decline is in leadership behavior, falling 6.5 points over the last three years. This is particularly concerning because leadership team cohesion is needed now more than ever, as the issues that organizations face do not present vertically (impacting a single function or business unit), they present horizontally (across functions and business units).

 

For example, when implementing generative AI, it’s much more than a technical exercise impacting tech officers and their direct reports—it has implications for the entire organization. Yet, our research on C-suite performance highlights that leaders are unprepared for the level of collaboration and engagement required to effectively implement complex technology solutions like AI, which likely also helps explain the low confidence scores around executive team behaviors. Leadership teams would be wise to work on the cohesion of their top team.

 

 

 

quote

C-suite leaders need to engage in deep collaboration with their peers, but they are struggling because alignment around strategy, key priorities, and the lines of responsibility for the new issues are often unclear and the level of expertise to deal with the new issues they face is low.”

David Lange
Global Capability Leader, Development, Russell Reynolds Associates

 

 

 

Figure 2: Declining leadership confidence is driven by ELT behavior

To what extent do you agree or disagree that your ELT role model the right culture and behaviors, work together effectively as a team, and effectively embrace change? 

(% of leaders rating strongly agree or agree)

67.9
H1 2021
64.3
H1 2022
64.1
H2 2022
ChatGPT launched​
Nov 2022
61.9
H1 2023
63.3
H2 2023
60+ countries to hold national elections​
Through 2024
61.3
H1 2024

 

 

 

Source : RRA Global Leadership Monitor, H1 2024, n=4,072 CEOs, board directors, C-level executives, and next-generation leaders

Leaders were interviewed during the following field periods: H1 2021=Feb/Mar 2021, H1 2022=Mar 2021, H2 2022=Oct 2022, H1 2023= Mar 2023, H2 2023=Sept 2023, H1 2024= Mar 2024

 

To gauge sentiment on leadership behavior, leaders were asked three questions: whether the executive team models the right culture and behaviors, whether they work together effectively, and whether they effectively embrace change.

 

Only 53% of leaders agreed that their executive team models the right culture and behavior. And, when considering executive team effectiveness, only 56% of leaders felt that their executive team works together effectively, and 59% felt their leadership team effectively embraces change. To be a high-performing leadership team that inspires confidence, role modeling the right culture, collaborating across functions, and demonstrating openness to change are all critical.

 

A foundational component across all these measures is trust and psychological safety (Figure 3). In our research on the importance of trust in today’s C-suites, we found that leaders at high-performing organizations are eight times more likely to feel that their C-suite team displays a level of trust that’s visible across multiple areas of the organization. And, as we noted in our article on how to inspire trust, it’s crucial for the executive team to demonstrate inclusive and transparent leadership, creating a sense of stability and reliability.

 

How confident leaders are in the behavior of their effective team varies greatly by level and role. Next-generation leaders are particularly lacking confidence in the executive leadership team's behavior—only 51% feel their ELT embraces change, 43% feel their ELT works together effectively as a team, and 38% think that they role model the right culture and behaviors.

 

Figure 3: ELT Behavior - To what extent do you agree or disagree that your ELT….

(% of leaders rating strongly agree or agree)

ELT Behavior - To what extent do you agree or disagree that your ELT&hellip

Source: RRA Global Leadership Monitor, H1 2024, n=4,072 CEOs, board directors, C-level executives, and next-generation leaders

 

Confidence in managing key issues drops significantly, particularly in the US

Leadership confidence in their executive team’s ability to manage challenging issues—such as digital transformation, DE&I, and sustainability—has declined 5.8 points in the last three years. Our research indicates that only 53% of leaders effectively harness ESG opportunities, 58% of leaders effectively embrace digital transformation, and 59% of leaders appropriately implement practices to improve DE&I. As unpredictable and volatile matters come to the fore, leaders are shouldering more responsibility than ever before, and running out of steam to tackle these issues effectively.

 

In the US, we’ve seen an even sharper decline in leadership confidence around issue management—falling 8.4 points in the last three years. Our data show that this has been driven primarily by a lower level of confidence in the executive team’s ability to embrace the opportunities of ESG a DE&I. Confidence in ESG and DE&I efforts has declined by 14 percentage points and 18 percentage points, respectively, in the last three years. (Figure 4). Now, only 48% of leaders in the US agree that their executive leadership team effectively embraces ESG, and only 55% agree their executive leadership team is implementing practices to improve DE&I.

 

Figure 4: ELT Issue Management—To what extent do you agree or disagree that your ELT….

(% of leaders in the United States rating strongly agree or agree)

ELT Issue Management—To what extent do you agree or disagree that your ELT….

Source: RRA Global Leadership Monitor, H1 2024, n=1,641 CEOs, board directors, C-level executives, and next-generation leaders in the United States

 

While the decline in confidence around ESG and DE&I may signal that leaders have made little progress on these issues, it is more likely a facet of a maturing in leaders’ understanding of the complexity of these issues and the climate surrounding them. The debate—and at times polarized discourse—around ESG and ongoing changes to DE&I legislation in the US have contributed to a more charged political and legal climate for US leaders. Although confidence has fallen and leaders have backed away from public declarations of their ESG and DE&I efforts, many are still staying the course and seeing positive outcomes from these efforts.

Methodology

How we track leadership confidence

The Leadership Confidence Index captures the view of CEOs, C-suite leaders, next-generation leaders (those 1-2 levels below the C-suite), and board directors on the effectiveness of the executive leadership team (ELT) at their organization across three constructs:


• Capability
Does the ELT have the right capability to lead the organization successfully; a strong grasp of competitive dynamics in their industry; access to the right information to support decision-making; and receive good advice and input from the supervisory board?

• Behavior
Does the ELT work together effectively as a team; effectively embrace change; and role model the right culture and behaviors?

• Issue management
Does the ELT effectively embrace the opportunities of digital transformation; effectively embrace the opportunities of ESG; have a successful strategy for leadership succession at the C-level; and implement practices to improve diversity, equity, and inclusion?


Responses to these items are combined into an overall Leadership Confidence Index on a 100-point scale, as well as a sub-index on each of the three constructs.

The Leadership Confidence Index is derived from RRA’s Global Leadership Monitor, which is an online survey of executives and non-executives that gathers the perspective of leaders on the impact of external trends on organizational health and their leadership implications (first launched in 2021). Russell Reynolds Associates surveyed its global network of executives using an online/mobile survey from 4 March to April 1 2024. Data from previous Global Leadership Monitor surveys were deployed in February/March 2021, March 2022, October 2022, March 2023, and September/October 2023.

 

Authors

Ela Buczynska, Tom Handcock, and Gabrielle Lieberman of RRA’s Center for Leadership Insight conducted the research and authored this report.

LEARN MORE ABOUT THE AUTHORS AND THE CENTER FOR LEADERSHIP INSIGHT

The authors wish to thank the 2,700+ leaders from RRA’s global network who completed the 2024 Global Leadership Monitor Spring Pulse. Their responses to the survey have contributed greatly to our understanding of leadership.

 

 

 

 

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Leadership Confidence Index

Explore leaders’ confidence in their executive leadership teams and how this has shifted over time.