Leaders more confident of Covid response than sustainability or diversity
Most business leaders are now well positioned to handle the impact a public health crisis might have on their firm. However, a host a new challenges await leaders in the years ahead – including purpose, sustainability and a competitive labour market.
A new survey by Russell Reynolds Associates has polled over 1,300 executives across over 50 countries, shedding light into some of key priorities and challenges of leaders globally.
One of the key findings is that when it comes to the top external factors impacting organisational health over the coming years, most executives agree that their leadership is prepared to meet the challenge. Around 61% listed uncertain economic growth as a top five challenge, 63% said their leadership was prepared.
Meanwhile just under half said changes in consumer behaviour, technological change and major health threats were top of the agenda – but in each case between 64% and 75% said their leadership were prepared for these challenges – particularly in the case of health threats, thanks to their experience in the last year.
Following this, business leaders appear extremely confident when it comes to handling public health crises in the future. When asked how confident they were in the executive team or advisory board’s response to the Covid-19 pandemic, more than 80% of CEOs, C-level executives, next-generation leaders and board advisory members agreed they had performed well.
James Roome, Managing Director at Russell Reynolds Associates, commented, “The pandemic has been a period of disruption for us all – personally and professionally. Inevitably the past year has prompted business leaders to consider how they are spending time in their careers and how they balance their priorities.”
That being said, business leaders were markedly less confident in how effectively the executive team and board embraced digital transformation, ESG opportunities, or diversity and inclusion efforts.
Commenting on the confidence gap in ESG, Roome said, “Boards and CEOs are feeling the pressure to show engagement and progress on ESG. However, ESG is typically not yet embedded in the culture of companies.”
“The ESG agenda needs to be key to the corporate strategy so that ESG priorities truly impact how business decisions are made. Until that point, there is of course a risk that the ESG agenda might be perceived as rhetoric without action.”
Human capital
Another notable blind-spot for business leaders is talent. While 59% of global executives said this was a top five issue impacting on their organisational health, only 55% said their leadership was prepared to address this. Add to this the fact that employees are expected to be the stakeholders with the second most potential to impact business strategy in the coming five years – behind only customer and consumer needs – and the problem becomes further emphasised.
This finding indicates that leaders are increasingly aware of the influence that employees can exert over public discourse, with social media a ready platform for airing concerns.
From this discourse, the researchers believe this is a recognition that the next generation of talent expects employers to have a higher purpose than just making profits, including prioritising diversity, equity & inclusion and sustainability, among other social issues – and as previously mentioned, these areas are notably ones where leaders have less confidence in their strategies.
