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.”
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
The IMF tracks usage of the word “uncertain” in economic reports across 143 countries, suggesting when CEOs are facing volatile times.
Source: IMF
Global inflation spikes
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begins
Financial
crisis
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Embrace risk and experiment:
Don’t let perfection
derail progress.
3 of 5
Diversify perspectives:
Avoid groupthink and challenge
pre-conceived notions.
1 of 5
Anchor to the purpose:
Focus on the “why we do”
versus “what we do.”
2 of 5
Don’t go it alone:
Prepare and empower your people
and partners, relying on their expertise
and ability to adjust.
4 of 5
Build and maintain resilience:
The trait can help leaders and workers
get through challenges.
5 of 5
steps
Uncertainty Around Uncertainty
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?
AI: A Stealth Weapon
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AI: A Stealth Weapon
Active
Activists
“
I’m looking for CEOs
to show some courage.”
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.
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.
Certainly, the rate of the campaigns could slow down, but activists aren’t likely to change a kind of outsider scrutiny that some CEOs see as nipping at their heels. Beyond financial matters, some activists have in recent years started questioning such areas as a firm’s commitments to social and environmental causes. Depending on where they’re headquartered, the occupant of the corner suite is being told to do a lot more—or a lot less. “It’s not just that you do it, it’s how you do it,” Korn Ferry’s Filler says. In response, experts say, one step is not to give activists reasons to show up. “If you want a less meat-grinder life as a CEO, grow the top line, predict profitability accurately, and have an engaged employee base,” says Korn Ferry global vice chair Jane Edison Stevenson.
At the same time, CEOs cannot allow activists to dictate their every move. Over the past five years, David Dotlich, a Korn Ferry president and senior partner, has seen no fewer than five CEO clients shelve growth ideas because developing them would also mean missing short-term earnings estimates. The bosses were afraid—of the market punishing the stock or activists coming after the company. “I’m looking for CEOs to show some courage,” Dotlich says.
What Activists Want
Source: Harvard Law School
Changes in digital transformation and innovation
10%
Environmental, social, and governance changes
Changes in
financial performance
and capital allocation
40%
20%
30%
Changes in board/leadership
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Strengthen the
leadership pipeline:
All executives should be great at managing conflicts, balancing stakeholders, and building networks.
1 of 3
Be transparent:
Accurately forecast earnings and
explain corporate strategies.
3 of 3
Think like an activist:
Proactively figure out company
areas of risk and be on the lookout for
cost savings, even in good times.
2 of 3
steps
Feet to Fire
What can leaders do when an
activist comes calling? How do you
avoid having them show up at all?
The World—and the
Economy—at War
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The World—and the
Economy—at War
Empowered Employees
“
The moment you sneeze,
somebody knows about it.”
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.
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.
“
Employees are no longer complacent to just go with the flow and take the next command.”
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
The platform employees have to air their concerns and criticism has taken off in the 21st century.
*LinkedIn members with “influencer” in title
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Encourage collaboration:
Employees should be rewarded for coming
up with creative ways to solve problems.
1 of 3
Listen better:
Routinely ask for employee feedback on business and work/life issues, then act on it.
2 of 3
Be authentic:
Explain why things are
being done as transparently and
empathetically as possible.
3 of 3
steps
Finding A Balance
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
