CEO Leadership Report 2021
A great study. It is exactly why we are launching Manager Insights this month, Crowdsourced Coaching Cohorts come Fall and soon our comprehensive Character Based Capitalism Leadership Program.
The Vulnerability of the Human Element of Work
CEOs are worried. About their own performance. The performance of their executive teams. The leadership potential of next-gen talent.
Worse, CHROs are even more concerned than their CEO counterparts. As part of our Global Leadership Forecast series, we created this special report to help CEOs, CHROs, and boards of directors to guide their efforts in one of the most challenging talent markets in history.
The concern about leadership talent is in line with trends we’ve seen over the past years, as leadership jobs have rapidly expanded and grown more challenging. However, the global pandemic dramatically accelerated and reshaped many of the preexisting shifts in the markets. changing consumer behavior, workforce demands, technology requirements, and skill sets.
Confidence in the capability of our leaders and our people is the single factor that will most affect success in any of these changing market conditions. In this report, we lay out the differentiating practices that enable people and companies to thrive in the future.
To arrive at our recommendations, we analyzed responses from 368 CEOs and 2,102 human resource executives around the world. with an average company size of 28,000 employees.
A Vision for the Future
Executive Summary
CEOs, CHROs, and their boards are facing the most tumultuous business conditions in generations. As they grapple with the hyper-velocity of changes in markets, competition, customer demographics, and buying behavior, the only question that matters is whether they have the people with the resilience, capability, and agility to build the company’s new future against such a challenging backdrop.
However, developing their executives and leaders- and even themselves-for that future capability is proving to be a significant challenge. Companies are moving fast, and often don’t give their leaders the support they need for success.
Our Global Leadership Forecast study builds on this crucial context with the best practices that are differentiating organizations. Examining the responses from CEOs and CHROs across the globe, four main themes stood out in our research:
- Developing future talent Is an Imperative for CEOs. Top executives expressed concern about the quality of frontline and mid-level leadership quality. However, leadership development approaches are often piecemeal, with increasing emphasis on individuals to pursue their own development rather than offering organizational support.
- As C-suite roles grow more demanding, C-suite leadership quality is dwindling against the rising benchmarks. Bench strength is at an all-time low as companies struggle to fill critical positions.
- CEOs and executives need development and support to be more effective in their roles. This is especially true for accelerating leadership transitions to help organizations thrive amidst rapid change. Boards have a responsibility for CEO development, along with the CHRO, but CEOs should also be accountable for better executive development.
- Many CEOs are not leveraging HR strategically to align their business needs with talent needs. A disparity in alignment between CEOs and CHROs poses a threat to the business, while highly aligned CEO-CHRO teams are realizing valuable people and business outcomes.
Above all, there’s a clear message that leaders at every level-from emerging high potentials to the C-suite-are looking for clarity in development and promotion decisions. In a chaotic environment, informal approaches aren’t working well. Rather, the need for deeper leadership strategy must come from the top as CEOs, CHROs, and their boards work together to strengthen the backbone of their workforce: their leaders.
In the eyes of most CEOs, next-gen leadership looks alarmingly bleak. As they look down the ranks of leaders in their organizations. most are not impressed by the quality of their frontline and mid-level leaders. This lack of confidence in lower level leaders is a strong indicator that companies may struggle to attract and retain top talent. Meanwhile, companies with CEOs rating their leaders highly are more likely to be considered “Best Places to Work.”
Only one in three CEOs (34%) say their organization’s frontline leadership quality is “very good” or “excellent.” At the mid-level, CEOs also have harsh reviews. with only 38% rating their mid-level leadership quality highly. However, CEOs are much more generous in their reviews of their senior team, with 58% saying they have a high-quality senior team.
These views don’t quite line up with the view of leadership more broadly across the organization. On average, leaders give frontline and mid-level leaders much higher rankings, although were slightly less optimistic than CEOs about the quality of senior leadership.
The disparity opens significant questions. Are CEOs correct that lower-level leaders are unprepared? Or are they out of touch with these leaders, struggling to gain visibility into challenges below the senior leaders closest to them?
