Recent survey results show that Chief Executive Officers (CEO) lack confidence in their team. After successfully navigating the unprecedented changes brought about by COVID, the new normal is not favorable to the executive leadership.
The latest Russell Reynolds Leadership Confidence Index looks at how executive leadership teams (ELT) behave, how they manage critical issues, and their capabilities. Their scores have fallen more than 8 points over the past few years. In looking at the findings, three things stand out.
- CEO confidence in ELTs drops, led by concerns about digital transformation and sustainability
- Team dynamics and behavior are concerning, with skepticism around collaboration, change management, and displaying the right culture
- Next-generation leaders have low confidence resulting in retention and succession risk for companies
As these bullets illustrate, CEO confidence is down across the three constructs measured by the study – executive capability, executive team behavior, and how the executive team tackles critical issues.
“As CEOs face a more constrained economic context, the ability of the ELT to embrace change, and drive forward digital and sustainability initiatives will be key to resilience and success. Digital transformation and sustainable leadership are not set-and-forget processes. They require long-term prioritization, monitoring, and intervention from the top. We know that the most successful organizations focus heavily on thorny issues like these, even in times of volatility and uncertainty.”
Leadership team behaviors and dynamics a top concern
The type of behaviors modeled by executives influences how the rest of the organization behaves and is a key driver of organizational culture. “…it appears the strain of leading in a hybrid world, the multi-dimensional nature of goals in an era of stakeholder capitalism, and new economic pressures mean that many leadership teams are starting to fray at the edges.”
Next-generation leaders at risk
According to the study, “Organizations need strong succession pipelines to create collective resilience, agility, and depth of leadership. This is not just about hiring next-generation leaders with future-oriented skills and experience. It is about engaging, retaining and developing them, too.”
Next-generation leaders, who tend to be one or two levels below the C-suite, are almost equally concerned about ELT behavior and their ability to manage critical issues. With more of a focus on execution, their concerns should be a red flag for their engagement and, as noted above, creating a risk for succession planning.
If you’re a CEO, it might be time to examine your ELT capabilities and your organization’s culture. If you see skills gaps or have concerns about behaviors, take a proactive approach to address them to successfully adapt to the changing business landscape. For more details, you can see the full report here.
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