The last year has been one of monumental change for business leaders across the world. Against this backdrop, we launched our 2021 Global Leadership Monitor survey to identify top business issues and measure how well prepared leaders are to face them. We received responses from more than 1,300 CEOs, C-suite executives, board directors, and next-generation leaders (those one or two levels below the C-suite). Collectively these leaders represent 53 countries, a range of industries, and both public and private companies.
External threats to business
Health challenges slowly recede, but talent concerns loom large. Asked about the external factors that will most impact the health of organizations across the next 12–18 months, 59% of leaders cited the availability of key talent and skills. This was second only to uncertain economic growth. Notably, of the top five factors cited by leaders, the talent factor was the one fewest felt prepared to face. To avoid risk to business strategy, organizations need to ensure their leaders have the capability and the requisite support to attract, engage and retain great talent.
Stakeholder impact on business strategy
Employees beat out investors as stakeholders that will most impact organizational strategy over the next five years. The concept that organizations need to consider multiple stakeholders in how they run their business is now firmly rooted in business discourse. While consumers/ customers were the stakeholders most frequently cited by leaders as being among the top three stakeholders that will impact strategy across the next five years, employees occupied the second spot, beating out both investors and the board. Are leaders and their successors prepared to lead an employee base that strives for purpose and holds a high bar on the organization’s impact on the environment and society?
Leaders are bullish on their pandemic response but less confident in their top team’s ability to engage with ESG, DE&I and leadership behaviors. While 91% of leaders were very positive on their leadership team’s response to the COVID-19 pandemic, their point of view on the issues of digital transformation, ESG and DE&I was both less positive and more divergent. For example, 74% of CEOs and board directors agree the leadership team is effectively embracing the opportunities of ESG, but only 57% of other C-suite executives do. This data points to possible disconnects within leadership teams as well as between management and the board.
The board’s ability to provide effective advice and counsel to management is crucial. Unfortunately, management does not always feel that this is what they are getting. Nearly 4 out of 10 CEOs and C-suite leaders do not believe that they receive good advice and input from the board.
These fracture lines can be difficult to manage but are essential to repair. Ensuring that the leadership team and the board operate in a cohesive manner, rather than as a collection of individuals, is now more critical than ever.
Interest in new opportunities strengthens, while confidence in succession strategies is low. How the pandemic is affecting talent mobility is an important question for organizations to consider. Our analysis shows that 61% of C-suite executives and 73% of next generation leaders would be willing to change their employer for the right opportunity (up 5 and 8 percentage points respectively from prior to the pandemic to today). Importantly, when we ask leaders about succession strategies, just 38% agree that the executive leadership team has a successful strategy for C-level succession.
The skepticism of executives in the robustness of succession strategies should be a cause for concern given the strong opportunities available to many talented leaders in the external market. Organizations need to establish the cause of this concern and either close communication gaps around succession planning or improve the robustness of their plans.