Business leaders face unprecedented challenges. They need to manage and adapt their organisations to prosper in an environment of flux and upheaval.  In this era of change that is both fast and unpredictable, what are their main concerns?

London Business School’s Leadership Institute conducted a survey of business leaders and analysed responses from 1,248 individuals.  Two factors in particular stood out as the dominant issues confronting leading executives.

First was employee engagement. The Leadership Institute research defined this as “the extent to which staff feel passionate about their jobs, their commitment to the organisation and its leadership and the discretionary effort they put into their work, over and above the minimum required.”

In this respect, executives appear to be struggling. It was cited as the toughest single challenge by senior leaders in financial services, manufacturing and professional services.

The Leadership Institute view? Simply telling staff the reasons to be passionate about their role or encouraging them to feel grateful for having a job with their company is insufficient.  This does not engender authentic engagement. Leaders need to identify and employ strategies to bolster genuine employee commitment, influence, expression and emotional engagement.  This way, both employees and organisations can benefit;  It’s a win-win.

The second big concern was the gulf between declared strategy and putting that strategy into practice. Clearly, this ties in with the issue of employee engagement: staff who don’t feel committed to their employer are unlikely to work wholeheartedly to help the organisation find a way of pursuing its aims.

Bridging the gap between strategy and execution is not just about imposing change from the top. Research by Rebecca Homkes, teaching fellow of Strategy and Entrepreneurship at LBS and Don Sull, formerly at LBS and now at MIT, have highlighted the issue. They have written: “[Managers and leaders] focus on tightening alignment up and down the chain of command – by improving existing processes, such as strategic planning and performance management, or adopting new tools such as the balanced scorecard. These are useful measures, to be sure, but relying on them as the sole means of driving execution ignores the need for coordination and agility in volatile markets.”

The struggle to bring activities and strategy into line was highlighted as a problem by leaders in organisations big and small - multinationals, large companies, SMEs and start-ups. And the results suggest that strategy execution is still too often thought of as a linear activity rather than a dynamic one.  Strategy is not something that should be set every one, three or five years: it needs to be revisited more frequently.

Business leaders highlighted talent management as another source of anxiety. This was identified as particularly important by executives in manufacturing. The challenges of employee engagement and effective strategy execution are likely to contribute to this.

A lack of employee engagement also ties in with further issues identified by respondents – an admission to a failure to drive work across organisational boundaries and to achieve collaboration between different parts of an organisation  Boundaries can be between business units, functions and/or geographical areas. And just 50% of senior managers say that members of their company’s executive team appear to work well together. Some 12% believe there is regular conflict and in-fighting. Respondents working in the technology and telecoms sectors said that driving greater cooperation across organisational boundaries was their single greatest challenge. Such lack of collaboration means it is hardly surprising that respondents also feel they are struggling with executing strategy, building engagement and creating meaningful change in their organisations.

Four-fifths of respondents said change is initiated from the top. Just 10% of respondents said change was driven from lower levels before being given the blessing of people higher up the management chain. Nearly one tenth were pessimistic about the prospects of achieving change, saying the organisation was change-resistant.

More than half the respondents to the Leadership Institute survey said they felt they were not achieving their full personal potential because they were too occupied with day-to-day tasks. Some 45% said the biggest barrier to achieving their full leadership potential was lack of strategic thinking; 35% felt inhibited by their firm’s inability to adapt to change.

These results indicate that many individuals are not making the opportunity (or the opportunity is not being facilitated by organisations) to allow space and time for focusing on personal development. They also suggest that individuals perhaps lack the skills and abilities to know how to craft, lead and manage change in the fast-moving 21st century business environment. The need to continuously focus on personal growth, developing emotional intelligence and building and leading a diverse team is becoming increasingly important for leaders.

And what if something goes wrong – or at least doesn’t deliver the desired result? A mere 11% of respondents said that if an initiative undertaken by individuals was deemed to have failed, that experience would be seen as yielding important lessons.  (However, start-ups and SMEs seem more inclined to learn from failures than large organisations.)  More than 55% of respondents (42% of all responses) said the results of a “failed” innovation would not be widely shared and a further 22% (17% of all responses) said the outcome would not be talked about. 

For any company to succeed at innovation, it has to learn how to manage failure.  Companies that get a high return on failure do so by maximising the benefits and also by minimising the costs.

Download the full Leadership Institute Leadership Survey here

Business leaders face unprecedented challenges. They need to manage and adapt their organisations to prosper in an environment of flux and upheaval.  In this era of change that is both fast and unpredictable, what are their main concerns?


Leadership Institute

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