Top Issues Facing Boards & CEOs in 2021
As we move forward into 2021, many CEOs and Boards are realizing the talent they have is not necessarily the talent they will need going forward in the post-crisis climate. Our new global study, Executive Talent Outlook 2021: Trends Impacting CEOs & Boards in the Year Ahead, shares the responses of more than 750+ executive-level search consultants. Respondents focused on what they identify as the trends impacting CEOs and Boards in the year following the COVID-19 outbreak.
COVID-19 Business Implications
While there are indicators that the business environment is beginning to enter a recovery phase, AESC Members believe that COVID-19 will continue to be the number one external force clients will face this year. Organizations have adapted to survive; they have changed. Going forward they will need to rely on lessons learned and perhaps a changed profile in leadership to move successfully into whatever comes next.
The catalogue on lessons learned from how organizations, governments, and communities operated through the pandemic could continue to change for a long time. Yet even the early learnings are many and meaningful. A key COVID-era lesson is flexibility. Remote work or the hybrid office could remain as a lasting change. The pandemic accelerated the remote work trend, and while there are benefits, there are also risks. For example, from the talent perspective, accepting an offer may have once required relocation. While every organization had to react quickly, companies that had invested in digital had a distinct advantage.
AESC Members also cite ongoing digital transformation, now expedited by COVID, as another top external issue. The need for attracting digital talent was in the top 3 responses (41%) of what CEOs & Boards are discussing with executive search firms. The businesses that we saw succeed during lockdowns and stay-at-home orders sustained their work cultures while social distancing.
Alwin Brunner, CIO at Heidrick Struggles says, “First, I think there will be a lasting impact psychologically with people who may not feel comfortable in larger groups of people. Second, the proof points and effectiveness around working from home suggest that corporate policies are probably going to be trending towards more opportunities to work from home because we've figured out as a society how to do it. Third, I think related to the other two, office setups, premises, configurations will likely change. Think: do I still have my own office, or do I just reserve a spot when I come in? So, the real estate footprints will probably change.”
Demand for Leaders Who Can Drive Change
Considering all the above, it's no surprise to find that AESC Members say the #1 topic CEOs and Boards are discussing with them is hiring leaders who can drive change (70%). Through the crisis, organizational leaders have seen where they have gaps in their business models and among their executive teams.
Companies must cultivate leadership prepared for uncertainty. Those who can navigate and capitalize on change that is fast-paced and unpredictable will prove most successful.
Louisa Wong is Executive Chairman of Global Sage and a member of AESC’s Board of Directors. Regarding a demand for leaders who can drive change she says, “Talking about change, you’re not talking about today, but what it will be like tomorrow or the day after tomorrow. Now that is the kind of leader that will need to imagine and take advantage. And that’s the kind of leader that you need today. The pandemic has made us all equal. You’re a big company, small company, we are all equal in this situation. So how do we become the winner and not the loser in an unprecedented time? Are any of the leaders thinking about that? They think they’re just in survival mode. No, you need to think about how to be the winner in a world that makes us all equal, that is equally bad for everyone. If you want to change your brand, change your identity, this is the best time to do it.”
Leading change goes beyond just surviving the pandemic.
Drive for Diversity, Equity, & Inclusion
Our need to belong may be rooted in our evolutionary biology. Now more than ever, organizations are taking notice of how that basic human need to belong is at the heart of why culture matters and the fact that culture impacts their bottom line. Leaders increasingly understand they will need more diverse teams and more digital talent to achieve the innovation necessary to thrive. Events in 2020 accelerated Diversity, Equity & Inclusion (DEI) strategies within organizations. Leaders understand that DEI must be a critical organizational focus as they look to attract, develop and retain diverse talent, while also addressing stakeholder concerns through a lens of ESG (52%).
Creating a culture of inclusion and belonging is important worldwide. But the lens from which we look at diversity itself varies around the world.
Tina Shah Paikeday leads Russell Reynolds’ global Diversity & Inclusion advisory services as a senior member of the Leadership & Succession team. She says, “The U.S. issues today are largely focused on race and ethnicity, whereas in Europe, squarely, the issue is women.” She adds, “As we think about the LGBTQ+ population, we can’t talk about that in certain parts of the world as openly as we do in the U.S.”
AESC members around the world are helping their clients accelerate the diversity of their leadership teams while helping them understand the importance of creating an inclusive culture.
Vaccine Availability for COVID-19
The final top five issue facing CEOs and Boards in 2021 is the availability of the vaccine. While there are emerging signs of economic recovery, with vaccination now underway and clients coming out of the blanket freezes on hiring that were widespread in many industries last year, most AESC Members still foresee a long road ahead. Considering the vaccination rollouts vary quite drastically by region, this most likely affected which geographic markets AESC Members expected the most growth, and the most challenges. For example, AESC Members ranked UK & Ireland as the most challenging market in the year ahead (Chart 8), no doubt due to the impacts of Brexit now tangible. However, with the UK's speedy vaccination rollout largely viewed as a success, this outlook may change in the coming months.
The effects of vaccine availability and the lasting mark on the business world and the workplace are still underway.
Download our newest report, Executive Talent Outlook 2021: Trends Impacting CEOs & Boards in the Year Ahead to gain a deeper understanding of both the macro and micro forces that will impact the business environment.