Critical organisational drivers for identifying next gen leaders
Over 850 business leaders who participated in a survey for the Association of Executive Search and Leadership Consultants (AESC) consistently identified business continuity as the most pressing challenge when identifying next generation leaders.
Globally and across industries, senior executives realise there is fierce competition for top talent who can lead in uncertainty, execute enterprise-wide digital transformation, foster diversity and innovation. All while remaining relevant and competitive in the marketplace. There is a premium for top talent and not always enough immediate successors ready to take over as Baby Boomers retire from the workforce.
In the AESC survey, C-suite leaders globally ranked ‘business continuity’ as the top reason for building next generation talent in their organisations. Business leaders are concerned that without immediate successors, the continuity of their mission, values and long-term objectives will not be actualised.
The survey also ranked the following four challenges as important reasons for building next generation talent in their organisations.
C-suite executives are concerned about delivering revenue growth amid widespread and constant industry disruption
Leaders realise that in order to be competitive and to innovate, they must have new approaches and perspectives. And that these must reflect and resonate with their customers on a personal and, increasingly, customised level.
While ranking highly in our survey for all sectors, revenue growth was the number one reason business leaders in the Consumer and Retail sector cited for building next generation talent in their organisations. “Traditional ways of doing business aren’t working. Japan is losing competitiveness,” commented one Regional Head in Japan’s Consumer and Retail sector.
All brands are grappling with how best to connect with next generation consumers, innovate in e-commerce as buying habits shift online. And to create personal and seamless experiences both on and offline and across different devices and digital platforms.
“Leaders are the source of competitive advantages,” said a CHRO in Europe’s technology sector.
Business leaders are realising that a competitive advantage today requires a new breed of leader, and many are looking to the next generation to get it. They are seeking talent that can thrive amid uncertainty and leaders who connect directly with consumers and understand their experiences because it is reflective of their own.
A premium is placed on agility and the ability to adapt and pivot quickly. Executives in the Financial Services sector ranked agility as a top three reason for building next generation talent in their organisations. “The ability to thrive in a dynamic and uncertain world will be necessary to ensure a business’s survival and progress,” responded one C-suite executive in the financial services sector in the United Kingdom. Another survey respondent, a Chief Operating Officer in the US non-profit sector, stated one top reason for building next generation talent: “To remain nimble and ahead of the curve in providing the best possible services to our clients.”
Business leaders understand their organisation’s success relies on their ability to read market conditions quickly, anticipate changes, quickly assess risks and opportunities and develop plans to respond faster than their competitors.
These lightning speed conditions, often results of technology and our digitally connected culture, are not native experiences for most of today’s leaders. Leveraging next generation executive talent that flourishes in highly fluid conditions is increasingly the answer for today’s most successful businesses.
Business leaders are anxious about a lack of key successors
Today’s C-suite leaders increasingly realise they must look to next generation talent for the competitive advantages their businesses require. They see identifying and preparing next generation talent as a priority so that they will be ready to lead. Succession planning for key leadership roles is even more of an imperative for today’s organisations, before they miss out on leveraging the abilities of next generation leadership while ensuring long-term business continuity.
“As a global organisation we continuously need to work on our succession planning to make sure we have the right talent for the future,” commented a Division Head within the Healthcare and Life Sciences sector in the Nordics region.
Executives globally in the Healthcare and Life Sciences sector ranked succession planning as the number one reason for building a next generation talent strategy within their organisations. With an increase in CEO turnover and ageing physicians and nurses, both of whom are increasingly tapped for executive roles as facilities seek stronger administrative and clinical alignment, having a succession strategy in place becomes ever more critical.
“To secure the succession process of the organisation and reduce the strategic gaps,” commented a CHRO in Mexico’s Industrial sector as a top reason for building a Next Generation talent strategy. Executives across all industries recognise the imperative of succession planning, reflected in our survey results as the number three top reason for building next generation talent, but many organisations have still not actually developed a succession plan.
“If the organisation is designed as a long-term business and not just a kind of mission task force, one of the first things you must ask is, who is next?” said a Latin America-based CEO in the non-profit sector.
Developing a talent pipeline ranked among the top five reasons of global business leaders for building a next generation talent strategy, and the second top reason among executives in the Professional Services sector. Along with ageing populations, many industries are experiencing a talent drain as leaders retire from the workforce. If organisations haven’t identified and developed internal talent, or tapped into external networks for the right successors, they have immediately introduced a high degree of risk into their equation for success.
Today’s C-suite struggles to actualise enterprise-wide digital transformation
“The next generation will lead a different kind of organisation, one more dynamic and decentralised, based on digital solutions,” commented a Regional Head in Brazil’s Technology sector. “Digitalisation and doing business in new ways can be a challenge for existing management,” added a CIO from the financial services sector in Europe’s Nordics region.
Digital expertise is increasingly essential to drive growth and remain relevant in the marketplace, and many organisations simply don’t have it well represented in their C-suite. Not only is it critical for their brands and aligning with their customers, it is also increasingly a required competency to lead teams scattered across continents and connected only by digital platforms.
For true enterprise-wide digital transformation, traditional hierarchies must be dismantled and smaller, flatter, self-organising teams must be able to easily develop from project to project. Thus, for digital to truly flourish enterprise-wide, it often requires a significant shift in both culture and structure. This requires leaders who can rally their teams around a new way of thinking that can feel daunting. Especially for those less comfortable working in more nimble, fluid environments.
Leaders from all sectors ranked digital expertise among the top five reasons for building a next generation talent strategy in their organisations, and executives from the Professional Services and Technology sectors ranked it second and third, respectively. Business leaders understand their organisations must actualise enterprise-wide digital transformation or be quickly left behind, and increasingly they identify leaders with digital expertise as being critical for innovation.
“New challenges need new innovative and mindful change management to be ahead of the competition,” stated a Chief Health & Life Officer within the Insurance sector in the Middle East.
When asked why building next generation talent was important, a CEO in the Professional Services sector in the United States commented more bluntly, “Because not to do so will kill innovation. Many industries are dying under the old models and thought patterns of tone deaf management.”
Business leaders grapple with constant, relevant customer alignment across devices, experiences and geographies
Leaders in the C-suite realise the customer is in control and that they need to harness next generation talent to stay relevant in the market and connect with their customer base. “Because the market is changing, the new customers are different, they have different expectations, and they respond differently to our products. In order to deal with this new market we need talent that understands that,” commented an executive in the financial services sector in Brazil.
Global business leaders are looking for new perspectives, ranked eighth globally and third by executives in the Consumer and Retail sector as a reason for building a next generation talent strategy. They realise their brands and products must be reflective of their customers and their experiences, and that reflection must start in the C-suite and mirror throughout the organisation. If C-suites and Boards are not reflective of their customers, they will quickly lose momentum in today’s environment of transparency where there is no barrier between company and customer.
Today’s customer is more sophisticated and empowered than ever. They offer their loyalty to organisations that reflect their values and place more importance on social responsibility. They are also looking for personalised, cohesive brand experiences across physical and digital environments.
Businesses with a competitive advantage must have leadership that is digitally fluent, can constantly place their customer at the core, while fostering an internal culture that is reflective of the market. “To be flexible, you need more articulations. Talent from the next generation is better able to understand what is currently happening,” commented a CEO in the financial services sector in the Central & Eastern European market.
Contact us for a confidential conversation about how to strengthen your strategy to identify next generation leaders within your organisation.