Recruiting, Talent

6 Leadership Trends That Are Changing the Workplace

A new worldwide study of 25,000 business leaders finds the biggest worry on executives’ minds isn’t recession, global competition or labor relations. It’s not even cybersecurity.

New data shows that what’s keeping C-level executives up at night is their people strategies.

About the Research

The research and subsequent report, “Global Leadership Forecast 2018: 25 Research Insights to Fuel Your People Strategy,” is a collaborative effort by human resources and leadership consultancy DDI; non-profit business membership and research organization The Conference Board; and professional services firm EY.
DDI published the first Global Leadership Forecast in 1999. This year’s study, the eighth edition of the report, includes data from 25,812 leaders and 2,547 human resources professionals at 2,488 organizations across 26 industries worldwide.

Leadership Challenges

C-level executives rank developing “next gen” leaders and failure to attract and retain top talent as their biggest challenges in the coming years by a wide margin. In fact, only 14 percent of CEOs believe they have the leadership talent to execute their strategy.
“If you’re deeply concerned about your organization’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 report. “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. The good news, however, is that the research also reveals a clear road map of how organizations can start changing their people strategies today to excel tomorrow.”

Key Findings

The full report includes 25 insights about corporate leadership around the world. Among these insights are six leadership trends:

  1. Digital is reshaping the workforce.
    Key finding: Digital pioneers—defined as the top 25 percent of organizations with the strongest digital leadership capabilities—financially outperform other companies by 50 percent.
    The impact of a digitally transforming workplace influenced nearly every aspect of the research, revealing that organizations that have digitally-savvy leaders are significantly outperforming the average. In sync with the financial findings, the study shows that there are substantial differences in leaders’ skills at organizations considered “digital pioneers” compared with “digital laggards.”
  2. Data is creating a more inclusive, agile, and fair workplace.
    Key finding: Organizations with more women in leadership are 1.4 times more likely to have sustained, profitable growth.
    Successful organizations continue to rely more heavily on big data to inform their business strategies, and their people strategies are no exception. By tying people analytics to business results, organizations are seeing how greater diversity in leadership positively affects the bottom line, and how diverse leadership capabilities better prepare organizations to handle disruption.
  3. A diverse, purpose-driven culture defines success.
    Key finding: Purpose-driven companies outperform the market by 42 percent.
    Culture emerged as a major driver of leadership success in the study. The data shows that, for leadership strategies to succeed, organizations must build solid cultural cornerstones, such as a clearly communicated purpose, peer coaching, experimentation, and psychological safety. Diversity also plays a major role in building a successful workplace, which includes embracing gender diversity, leveraging diverse mindsets, and understanding the relationship between Millennial, Generation X, and Baby Boomer leaders.
  4. DIY doesn’t work.
    Key finding: 55 percent of organizations in the top third for financial performance have formalized mentoring.
    A “do it yourself” mentality leads to leadership failure. Data provides 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, organizations that rely on a self-directed, insular approach to learning are failing to engage leaders in meaningful development.
  5. Finding new sources of leadership potential is crucial.
    Key finding: Organizations that extend development of high-potential talent below senior levels are 4.2 times more likely to financially outperform those that don’t.
    In the past, organizations have often had a narrow definition of the “type” of person who has leadership potential, and have invested their resources into developing a very small group of people who meet that criteria. However, research shows that organizations that take a broader view of leadership potential prove to be more financially successful, feature stronger top leaders, and have more women in leadership.
  6. HR is losing its influence.
    Key finding: On average, companies excelling at people analytics are 3.1 times more likely to outperform their peers financially. But as HR’s digital skills continue to lag, attempts to adopt people analytics are increasingly failing.

Over the past three years, HR’s reputation has gotten worse, with more leaders now believing that HR is simply a “reactor” that executes commands rather than an “anticipator” that develops a people strategy that enables the organization’s business strategy. One of the primary challenges is that HR is failing to develop digital skills on pace with technology advances, which undermines their ability

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