Six megatrends changing the global workplace

A large international study of CEOs and HR managers identifies the key issues occupying business leaders' agendas. People strategies and talent shortages are their number one concern.

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The international survey, published by leadership development firm DDI, business services provider EY, and independent business membership and research association The Conference Board, identifies people strategies as the number one issue for chief executives.The study, Global Leadership Forecast 2018: 25 Research Insights to Fuel Your People Strategy (GLF), also points to the positive financial impact of women leaders, digitally-aware executives, purpose-driven cultures and ongoing skills development.

Top 10 leadership challenges today

Among the key findings in the global study of almost 26,000 leaders and 2,550 HR professionals across 26 industries is that only 14% of CEOs believe they have the leadership talent to execute their strategy.CEOs ranked difficulties in developing the next generation of leaders and failure to attract and retain top talent as their top two challenges by a significant margin.
  1. Developing “next gen” leaders (64%)
  2. Failure to attract/retain top talent (60%)
  3. New competitors globally (48%)
  4. Cyber security (28%)
  5. Slowing economic growth in emerging markets (25%)
  6. Labour relations (24%)
  7. Global recession (22%)
  8. Income inequality/disparity (21%)
  9. Outdated/insufficient national infrastructure (20%)
  10. Global political uncertainty (18%)
“If you’re deeply concerned about your organisation’s lack of leadership capability, you are in the clear majority,” said Evan Sinar, chief scientist and vice president of DDI, and lead author of the GLF.“The tremendous amount of data we collected in this study shows that as digital disruption continues to transform the workplace, we’re facing a massive leadership shortage worldwide."
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What are today’s leadership megatrends?

The Global Leadership Forecast 2018 authors add further insight around people management and development to the data by consolidating the 25 major insights from the data into six overarching themes.1. "Digital is reshaping the workforce" Digital pioneers – defined as the top 25 percent of organisations with the strongest digital leadership capabilities – financially outperform other companies by 50%, according to the GLF's analysis. The study showed substantial differences in leaders’ skills at organisations considered “digital pioneers”.“Leadership, particularly in the current digital era, is of critical importance to our clients,” said Adam Canwell, partner, People Advisory Services, Ernst & Young Australia. “It is a top agenda item for CEOs and boards, who are looking for insights on how to embrace disruption to connect people and possibilities.”2. "Data is creating a more inclusive, agile and fair workplace"Organisations with more women in leadership are 1.4 times more likely to have sustained, profitable growth, finds the GLF. Successful organisations rely more heavily on big data to inform business strategies, including people strategies.3. "A diverse, purpose-driven culture defines success"Culture emerged as a major driver of leadership success in the study. Purpose-driven companies outperform the market by 42%.The data also showed for leadership strategies to succeed, organisations must build solid cultural cornerstones, such as:
  • a clearly communicated purpose
  • peer coaching
  • experimentation
  • psychological safety.
This includes embracing gender diversity, leveraging diverse mindsets, and understanding the relationship between Millennial, Generation X and Baby Boomer leaders.“In this rapidly changing era of disruption, globalisation and digitalisation, leaders still need to deliver results and balance that with the need to ensure performance, coach and develop people, be inspiring and engaging and nurture diverse talent. It’s a tall order,” said Dr Rebecca L Ray, executive vice-president of the Knowledge Organization at The Conference Board, and a co-author of the GLF.4. "DIY doesn’t work"Over half (55%) of organisations in the top third for financial performance have formalised mentoring frameworks. GLF data provided clear evidence that leaders are increasingly expected to work in shared leadership environments, and that leaders increasingly need to build relationships with mentors to find success. Additionally, organisations that rely on a self-directed, insular approach to learning are failing to engage leaders in meaningful development5. "Finding new sources of leadership potential is crucial"Companies that adopt organisation-wide development of high-potential talent are 4.2 times more likely to financially outperform those that don’t. Organisations that also take a broader view of leadership potential prove to:
  • be more financially successful
  • feature stronger top leaders
  • have more women in leadership.
6. "HR is losing its influence"On average, companies excelling at people analytics are 3.1 times more likely to outperform their peers financially. However, more leaders than three years ago now believe HR is simply a “reactor” that executes commands rather than a strategic “anticipator”.One of the primary challenges is that HR is failing to develop digital skills in line with advances in technology, which undermines its ability and reputation to drive digital transformation across the workforce, suggests the authors.
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