CEOs are hired to handle pressure, but how much is too much? We look at 5 of the most daunting pressure points in today’s world—and new ways to navigate them.
By Russell Pearlman / Illustrations by Tim Ames
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The Breaking Point
Maybe the AI “revolution” won’t lead to much. So what if it makes emails more grammatically correct or speeds up coding? Perhaps it will never be able to provide information that reliable. One MIT researcher even feels the bump in corporate productivity might be as little as 1 percent over 10 years. With such uncertainty surrounding AI, leaders might be tempted to hold off for now—to let other firms spend big on AI and expand resources making mistakes—until there’s clear proof that it makes a difference in their specific business. Dave Rossi, president of Korn Ferry’s Global Industrial Manufacturing Advisory, says he’s currently seeing that approach across C-suites and boardrooms. “You feel like you have to invest in it, even if you don’t believe in it,” he says. But CEOs who delay could face the danger of not committing to a valuable new technology—or embracing it too late. Business historians can recite a host of lessons from the past along these lines, pulling out such latecomers to new technology as Blockbuster and Sears, Roebuck and Co. But while the first functional artificial intelligence dates all the way back to 1951, most of the world only woke up to the once-in-a-generation potential of AI when ChatGPT hit the scene much more recently. This, many believe, could be the next internet or combustible engine—if only people, especially CEOs, knew how to use it and when. “It’s seen as a technology waiting for a problem,” says Jean-Marc Laouchez, president of the Korn Ferry Institute.
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Growth: It’s Vanishing
We’re seeing how critical hiring AI talent has already become.”
AI: A Stealth Weapon
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You can’t put your head in the sand for this one.”
Some CEOs, like Peter Ross of Senior Helpers, a $500 million-a-year firm offering in-home healthcare, are already looking to the future. “I’m excited and nervous at the same time,” he says. He’s hopeful the technology will make it easier to monitor the health of the company’s patients, among other tasks. But the real game changer for Senior Helpers would be for AI to streamline the massive task of organizing, assigning, and deploying the firm’s 20,000 caregivers in its more than 380 franchise locations. Sure, to an outsider, none of this is as thrilling as watching Will Smith take on an army of robots, but it’s where the battle for survival in Ross’s business will be fought. “You can’t put your head in the sand for this one,” he says. Of course, one pressure follows another. Already, a variety of stakeholders are demanding to see the return of investment firms who are pouring resources into AI, which is virtually impossible to calculate at this stage. And yet CEOs know they’re risking market share, even their entire businesses, if they don’t invest. Indeed, the cost of not reacting is already being felt in many sectors. According to a survey of nearly 8,000 firms that Korn Ferry commissioned from Telemetry, a talent data specialist that probes publicly available workforce data, high-performing companies had twice as many AI and machine-learning employees as their low-performing counterparts. “We’re seeing how critical hiring Al talent has already become,” says David Ford, managing director of Telemetry. Experts say one of best ways for leaders to deal with AI is to make sure others in their firm aren’t feeling the same pressure they’re under. In other words, don’t overload managers of other divisions with AI responsibilities. Dedicate a leader and a team to assess which of the firm’s functions could be positively affected by AI adoption (or directly hurt if a rival adopts AI). Task the team with crafting and implementing an AI strategy, understanding that ultimately its use will be decentralized among employees to use effectively. Key AI roles don’t necessarily have to be permanent, either: Hiring interim talent can bring in the required expertise without a long-term financial commitment. Smart firms know they need to set up safeguards for the use of AI tools, given concerns both about data privacy and error-prone output. That said, Paul Dinan, an advisory leader in Korn Ferry’s Global Technology Market practice, says the best leaders are finding ways to protect their business while still encouraging their teams to embrace AI and make informed decisions. “Don’t be disappointed in the apparent lack of progress. Change needs a long runway,” Dinan says. It’s advice Ross at Seniors Helpers is actually taking. Instead of immediately demanding that the organization’s 380 franchisee-owned offices adopt the technology to organize caregiver schedules, he’ll test it out at the five locations he directly controls. “Don’t put technology in until it’s ready,” Ross says.
Worldwide spending on AI (estimate)
$50 billion
Source: IDC, Gartner
2020
2021
2022
2023
2024
$85.3 billion
$118 billion
$154 billion
$200 billion
01 AI: A Stealth Weapon
02 Growth: It’s Vanishing
03 Empowered Employees
04 Active Activists
05 The World—and the Economy—at War
Overview
The Problem: Artificial intelligence could disrupt everything, but few leaders really know how it will. The Solution: Dedicate a team to exploring AI and crafting a strategy, then experiment.
3 of 3
Train employees, foster a culture where AI empowers—rather than intimidates—employees, and develop strategies to integrate the technology while still encouraging the strengths of human workforces.
Help employees adapt to AI:
2 of 3
The goal is to experiment, iterate, learn, and improve, rather than to achieve perfection.
Encourage experimentation (within boundaries):
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What are the challenges and opportunities? How can AI’s power best be distributed among employees? What are the potential ethical implications?
Get answers to the right AI questions:
According to one Korn Ferry survey, 82 percent of business leaders say AI will profoundly affect their businesses—they just don’t know how yet. What is known is that it’s expensive. So how should leaders think about this technology?
steps Getting the Jump on AI
Solving Your Toughest Leadership Development Challenges
AI in the Workplace
Technology and Leadership Development: Working in Harmony
Talent Recruitment
CEO: I’m an Imposter
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Overview 01 AI: A Stealth Weapon 02 Growth: It’s Vanishing 03 Empowered Employees 04 Active Activists 05 The World—and the Economy—at War
Imagine that your job’s most important metric suddenly fell off a cliff. For decades, this metric had been the one thing you could point to as evidence of your success. And now, like some horror movie, it’s starting to slip away. Welcome to the world most CEOs inhabit. Outside of a few technology and healthcare niches, corporate growth charts are hardly impressive, which can make for some awkward questions come earnings season. For the five years ending in 2023, S&P 500 firms grew their revenues, on average, by 6.9 percent a year. In 2024 that number is more than one-third lower, at just 4 percent. It’s the lowest annual revenue growth of any year in the 21st century that did not have a recession. Experts say 2024 won’t be a one-off, either. Academics will debate for decades why something so fundamental to business could dip so much. Certainly, many CEOs haven’t had particularly strong economic tailwinds to help them out. Twenty years ago, big established economies such as the United States, Germany, the United Kingdom, and Japan were growing, as a group, by 3.3 percent annually. As recently as 2018, those advanced economies grew 3.1 percent. In 2023, growth was just 1.8 percent, and 2024 is shaping up to finish close to that far lower number. And in places such as the UK, the economy isn’t expanding at all. Some CEOs, grasping for straws, have turned to mergers as a quick fix, but their expenses rarely pay off. “Stringing acquisitions together is boring and expensive,” says Korn Ferry’s Rossi. “Most destroy value.”
Empowered Employees
There’s been a real hesitancy about making decisions that need to be made.”
The Problem: The traditional tailwinds driving sales and profit growth have faded, and many companies are finding they can’t grow without them. The Solution: Leaders need to shift their company cultures to encourage a greater tolerance for risk.
Where are the big ideas?”
Some solutions may be right in front of CEOs’ noses, such as expanding more into developing countries or searching for more solutions for the climate. But the biggest key to future growth, many experts believe, will come—as it usually has—from innovation: breakthrough manufacturing processes that make products faster, better, or cheaper; or new gadgets that save consumers time and money. Aside from AI, says Grant Duncan, a Korn Ferry senior client partner and the UK and Ireland consumer practice lead, most companies are focusing on incremental, not ambitious, improvements. “Where are the big ideas?” he asks. Talk to almost any CEO and you’ll find they’re as mystified about this idea drought as they are about the decline in growth. Sometimes the most obvious step can help: Telemetry, for example, found in its research for Korn Ferry that high-performing large firms were the ones that had simply hired more chief growth officers than others—by a whopping 541 percent since 2014. Of the firms named to Korn Ferry’s World’s Most Admired Companies list, eight in 10 say that growth depends less on investment in technology and more on people—hiring the right ones, aligning them properly in the right teams, and offering a skills- and career-development program that’s not based on a check-the-box webinar. “I’m surprised how long it took companies post-COVID to really look at how best to adapt to grow,” says Korn Ferry’s Manson-Smith. “There’s been a real hesitancy about making decisions that need to be made.” It’s a complicated formula, to be sure, this business of creating a culture to foster innovation. And nobody can know with certainty what works. Still, when Humana, the giant healthcare provider, managed to double its revenues in five years, it was partly due to creating health goals not only for patients but employees simultaneously. One example: successfully improving the health of various communities the company serves by 20 percent, using the Center for Disease Control’s Healthy Days Measures. “You can’t have world-class customer engagement without world-class associate engagement,” says Tim Huval, the company’s chief administrative officer.
A Growth in Chief Growth Officers
2014: 38
Source: Telemetry
Change: 668%
Now: 292
2014: 24
Now: 163
At companies with more than 2,000 employees
At companies with more than 5,000 employees
Change: 579%
3 of 5
on developing high-performing teams.
Focus
2 of 5
a culture that rewards innovation and experimentation.
Create
1 of 5
which skills are needed to grow the business, then hire and develop people who have those skills.
Assess
Companies are aware that growth has gotten harder to come by. Indeed, the number of mid- and large-sized firms that have hired a chief growth officer has risen by nearly 700 percent over the last decade, according to research firm Telemetry. But a dedicated executive isn’t enough to get a company consistently growing.
steps Plant the Seed and It Will…
4 of 5
underserved markets rather than hotly competitive, low-growth, established ones.
Go after
5 of 5
and retain great middle managers and executives.
Attract
x
It’s a scenario that has happened more than once—in fact, it happens seemingly every quarter. The CEO calls an all-hands meeting to discuss the company’s performance. Sometimes the news is good, sometimes not so much. Usually, an in-house forum is opened up to employees to ask questions and make comments online. It might not go well. It may even go very badly. Some ask questions about raises. Others ask whether layoffs are pending. A few question why the leader doesn’t trust them. In short order, the comments end up on social media and then in the press. It’s the last thing a CEO wants to see, says Laura Fravel, an executive communications coach and trainer in New York, but has become much harder to avoid. “Employees are no longer complacent to just go with the flow and take the next command.” In 2024, much of the focus has been on how much leverage employees have lost. Few people talk anymore about the Great Resignation. Tales of workers quitting on a dime and immediately landing higher-paying jobs are in the rearview mirror. But don’t try telling any of that to top leaders, who can see that corporate hierarchy has been turned entirely on its head. First and foremost, every CEO knows—or should know—that they are now operating in a glass house. Any misstep—in a meeting, in a memo, even in a casual hallway conversation—can create havoc. “The moment you sneeze, somebody knows about it,” says Ellie Filler, managing partner of Korn Ferry’s EMEA Human Resources practice.
Active Activists
Employees are no longer complacent to just go with the flow and take the next command.”
The Problem: CEOs can no longer expect to make business decisions without facing some employee dissent. The Solution: Be much more diligent and transparent in how you communicate.
The moment you sneeze, somebody knows about it.”
This is all a product, of course, of a number of demographic and multimedia forces clashing all at once. And it’s the price companies are paying for taking away employees’ pensions and other loyalty-ensuring perks. Most employees, even those whose families might have worked at the same firm for five or even six generations, are no longer incentivized to stay. The average tenure for millennials and Gen Xers? Under three years. To their parents’ shock, these younger workers have zero compunction about complaining about the boss to colleagues. Indeed, there is a sense of impunity among some. “When employees are not motivated, they have nothing to lose,” says Mark Royal, a Korn Ferry senior partner and expert in employee engagement. Experts say the best way to motivate empowered employees is to create a more personal stake in the firm’s mission—so they do have something to lose. Many want to be in more autonomous teams with opportunities to learn skills and define their own career path. If spectacular pay raises aren’t an option, better benefits and flexibility can make a difference. A Korn Ferry workforce study, in fact, found that workers slightly favor strong benefits over strong pay. It’s been a mantra for a while, but workers tend to respond positively when they feel authenticity from their leadership. “You don’t have to be nicey-nicey or sweetie-sweetie, you just have to be real,” says Filler. These days, a lack of transparency and authenticity is actually what leads to trouble: CEOs who say one thing and do another may be pilloried by their employees or fired by their boards. “Employees are only going to fill any information gaps with stories they already are telling themselves,” says Naomi Sutherland, global lead for Korn Ferry’s Life Sciences practice. Trying to get a handle on any of this isn’t easy. Each quarter, Swapnil Shinde, the CEO of AI accounting-software firm Zeni, gathers his 350 employees for a video town hall about what’s going on in the company, everything from revenues to the number of customers to the firm’s margins and goals. After those discussions, individual managers make presentations covering more details. If there’s bad news, it’s delivered first, and, Shinde insists, not in a finger-pointing way. It seems to work. The engineering team at Shinde’s previous firm followed him when he started Zeni.
The Number of Work ‘Influencers’ on LinkedIn
2004
*LinkedIn members with “influencer” in title
The platform employees have to air their concerns and criticism has taken off in the 21st century.
2008
2012
2016
0
2K
4K
6K
8K
10K
12K
14K
16K
Explain why things are being done as transparently and empathetically as possible.
Be authentic:
Routinely ask for employee feedback on business and work/life issues, then act on it.
Listen better:
Employees should be rewarded for coming up with creative ways to solve problems.
Encourage collaboration:
Workers may not have as much leverage as they did during the Great Resignation, but their loyalty to their employers continues to fall. They may often openly criticize (or praise) management decisions in their social networks. What can CEOs do?
steps Finding A Balance
Recently, an activist investor called a CEO’s business strategy “incoherent.” Another chastised a CEO for their social-media posts. A third threatened to boycott a firm’s products unless it changed its hiring practices. Well-intentioned or not, activists can be a massive distraction to a company’s executive team, not to mention a huge cost of time and money. One Fortune 500 firm ran up a $65 million tab fending off a group that was trying to replace board members. Any time spent on activist campaigns is time not spent on product development, motivating employees, or strategic planning. Plus, there’s the high-profileness of it all. Campaigns that used to slip past most stakeholders are now out in public. “It can make it onto the front page,” says Stephanie Hill, head of index at Mellon Investments. As if CEOs didn’t have enough going on, the volume of these campaigns has gone through the roof, with 1,162 ongoing in 2023, triple the year before, and continuing to a five-year high in the first half of 2024. Interestingly, it’s a strong, not weak, stock market that seems to be causing this jump, because CEOs can blame a low stock price on a faltering Dow. Activists have also become more aggressive because of a recent rule change by US securities regulators that makes it easier for them to win board seats.
The World—and the Economy—at War
The Problem: The number of activist campaigns is surging, nipping at CEOs’ heels or creating wide disruptions. The Solution: Communicate consistently with shareholders— but don’t give in when it doesn’t make sense.
I’m looking for CEOs to show some courage.”
What Activists Want
Source: Harvard Law School
Changes in digital transformation and innovation
40%
10%
20%
30%
Environmental, social, and governance changes
Changes in board/leadership
Changes in financial performance and capital allocation
Accurately forecast earnings and explain corporate strategies.
Be transparent:
Proactively figure out company areas of risk and be on the lookout for cost savings, even in good times.
Think like an activist:
All executives should be great at managing conflicts, balancing stakeholders, and building networks.
Strengthen the leadership pipeline:
What can leaders do when an activist comes calling? How do you avoid having them show up at all?
steps Feet to Fire
It’s not just that you do it, it’s how you do it”
Let’s start with the good news. Despite years of dire predictions, there’s no global depression. Stock markets have remained robust. Inflation in most parts of the world seems to be tamed. But look at the many other factors that can affect business, and you wonder how a lot of CEOs get out of bed. For 2024 alone, the list of calamities they need to monitor includes two very visible wars, a decelerating economy in China, a massive US election, major natural disasters in Eastern Europe and Asia, significant antitrust actions in the US and Europe, and massive swings in global stock and bond markets. Some handle all of this by putting in long hours of work. Others try to stick to what they know best. “A lot of CEOs keep their heads down,” says Korn Ferry’s Dotlich, who has authored bestsellers on leadership and is a close confidant of CEOs at some of the world’s biggest firms. “They figure all that uncertainty is just too overwhelming.”
A lot of CEOs keep their heads down. They figure all that uncertainty is just too overwhelming.”
The Problem: Uncertainty isn’t going away, but many leaders refuse to deal with it. The Solution: Become more agile. Simple to state, hard to execute.
If you’re not agile, you’ll die.”
There isn’t a CEO, of course, who doesn’t know how much the COVID-19 outbreak completely upended everything—but it doesn’t take a pandemic to cause corporate chaos. In 2021, a cargo ship went aground in the Suez Canal and caused more than 300 other ships behind it to be stranded. The total loss in trade was an estimated $9.6 billion a day. Disasters, natural and man-made, are increasingly frequent too; the world experiences about 400 annually, according to the International Monetary Fund—twice as many as it did a generation ago. Few CEOs can survive without adding all of this to the planning pile—not to mention taking into account such worries as inflation, recession fears, and volatile markets. Experts say the best CEOs realize they can’t take this all on alone, so they build trust and empower their people. The best ones also increase flexibility—their own and their company’s—to a whole new level. “If you’re not agile, you’ll die,” Filler says. Simple advice, to be sure, but experts say it’s surprising how little many leaders seem to be adjusting. In a Korn Ferry survey, only two-thirds of them listed agility and openness to change as critical, while only about one-third said their organization needed agility. Agile leaders move with speed and boldness, experts say. They plan for future scenarios to limit potential concerns, build capacity to shift people to where they’re most needed, and provide resources and support to promote employee health and well-being. In periods of uncertainty, CEOs have to be both forceful and empathetic, acknowledging the problem but also reminding workers what needs to be done. “At the end of the day, after all, CEOs are hired to handle disruption,” says Dotlich.
World Uncertainty Index
Source: IMF
Financial crisis
20K
30K
40K
60K
50K
The IMF tracks usage of the word “uncertain” in economic reports across 143 countries, suggesting when CEOs are facing volatile times.
Pandemic begins
Global inflation spikes
Avoid groupthink and challenge pre-conceived notions.
Diversify perspectives:
The globe is about 50 percent more uncertain than it was at the beginning of the 21st century, according to the IMF’s World Uncertainty Index. How can leaders prepare for something that might or might not happen—or can’t even be imagined?
steps Uncertainty Around Uncertainty
The trait can help leaders and workers get through challenges.
Build and maintain resilience:
Focus on the “why we do” versus “what we do.”
Anchor to the purpose:
Don’t let perfection derail progress.
Embrace risk and experiment:
Prepare and empower your people and partners, relying on their expertise and ability to adjust.
Don’t go it alone:
The World—and the Economy— at War
