Crisis Of Confidence In Business Leaders To Manage Disruption, Like Coronavirus
Only 15% of executives believe their companies’ top leadership will succeed
Only 15% of business executives worldwide have confidence in their company’s own top leadership to successfully manage disruption – including unexpected events like pandemics, technological advances, shifting demographics and climate change, a global analysis from the international executive search firm Odgers Berndtson reveals today.
This lack of confidence is striking since 95% of executives also believe that managing disruption well is now critical for companies to succeed in turbulent times. Odgers Berndtson concludes that successful companies will have to “reinvent leadership” for the modern world.
“The quality of leadership has never been more important to the success of companies – on which employees, investors and economies depend,” Kester Scrope, Chief Executive of Odgers Berndtson said. “For the first time, this Index shines a unique light on the attributes leaders need to build strong organizations aligned to the modern world.”
Using a methodology developed with Harvard Business Review Analytic Services, the firm today launches the first The Odgers Berndtson Leadership Confidence Index. Using data from almost 2,000 senior executives, managers and board members of companies with sales from $50 million to over $5 billion around the world, this gives a first measure of confidence in the ability of top leaders to drive success in changing times.
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The Index also identifies what qualities and attributes in top people companies need most to thrive in changing times. In its report, Odgers Berndtson notes that 88% of senior managers and executives expect disruption to increase over the next five years, and almost as many (85%) say it has already had an impact on their organizations.
The stakes are high. According to Harvard Business Review Analytic Services (HBR-AS), 95% of senior executives around the world now believe managing disruption well is not only vital to the success of their company, but also brings “discernible competitive edge.” The longevity of top companies is getting ever shorter, with some in the US for example, predicting half of the current Fortune 500 companies will disappear over the next decade.
Only 16% of senior managers believe their company’s top leadership has managed disruption well to date, and only 15% are confident they will do well in future. The majority (61%) are tentative but a quarter (24%) actively worried – with similar results across all global regions.
This crisis of confidence appears most stark when it comes to individual roles and leaders, notably chief executives. While 85% of respondents believe the CEO has the most critical role to play, 40% express doubts that the person in the top role will manage disruption well over the next five years.
“The uncomfortable truth for some CEOs is that a strong track record does not equate to having the capabilities to deal with future disruption,” Odgers Berndtson notes in its report.
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However, the Index shows confidence is also lacking in all C-suite roles – including key top jobs such as finance, human resources and technology – and that there are clear differences between the top 15% of leaders, who inspire the most confidence, and the rest. “The more progressive leaders see only opportunity,” Odgers Berndtson notes. “What is required is a healthy attitude towards change.”
The Index also compares companies that score highly on confidence in their top leaders with those that don’t. Confident companies are the most positive about their leadership’s courage, vision, and curiosity, plus their ability to drive a sense of purpose.
“Successful companies will recognize that mindset as well as skillset are critical in their leadership,” Mr Scrope said. “Agility is key, both at the organizational level and in the individual characteristics of leaders inspiring confidence. Attributes of mindset are now very important if individuals are to adapt and seize opportunities in the face of unprecedented disruption.”
“What we are finding is that the leaders who are successfully thriving now are much more collaborative with their colleagues,” says Mark Braithwaite, Managing Partner of Odgers Berndtson APAC, and author of “Leadership Disrupted,” a book published last year which explores how CEOs across APAC handle disruption. “If leaders have the humility to accept that they don’t know everything, they can create a culture of innovation where they include a lot more people in thinking through business problems, not expecting to be right every time.”
Odgers Berndtson believes an evolution in leadership is required for companies to thrive in a world of complexity and uncertainty, combining the drive, adaptability and curiosity required for constant change, with the vision and courage to lead change and resilience to stay the course. Leaders need a mindset to cope with change, and the humility to move on from old command and control structures. This is also likely to impact the process of executive search.
Steve Potter, CEO of Odgers Berndtson US, commented, “Anyone who thinks executive search is not facing its own disruption is short-sighted. As a firm we have certainly been thinking about what this means for us, and are making changes through use of artificial intelligence, in pricing, additional leadership and organizational offerings, and other services that will benefit our clients as they innovate for the future.”
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