Most people and organizations would probably agree that the start of the 2020 decade has demonstrated a new level of Volatility, Uncertainty, Complexity, and Ambiguity (VUCA). The challenges we experienced include the Covid-19 Pandemic, supply chain disruptions, global recession, cost of living crisis, The Dual Challenge, and The Great Resignation wave. Adding to these challenges is the change in demographics, particularly in the workforce. To succeed in such a VUCA2 environment, organizations, and their leaders, face an unprecedented demand for agility, adaptability, strategy, and corporate vision. Organizations will have to contend with multigenerational workplaces and types of employees. While seismic technological advances such as artificial intelligence and IT require leaders with more data and digital literacy, technical and domain skills are secondary to people and leadership skills. As His Highness Sheikh Mohammed bin Rashid Al Maktoum notes, Human beings are the capital of the future. Similarly, management guru Ram Charan highlights that people craft strategy and deliver business numbers, which means if an organization fails short on the people side, it also falls short on business leadership.
Investment in the leadership of the future, throughout all levels of an organization or entity, will help provide a sustainable future for all. A strong correlation exists between the benefits of good leadership and business performance. Organizations investing in employee development typically report 11% greater profitability and are twice more likely to retain their employees (Gallup, 2019). Studies also show that inspired employees are 125% more productive than merely satisfied employees (FranklinCovey, 2022). As leadership expert John Maxwell notes, leadership ability is the lid (limit) to personal and organizational success.
On the risk side, 70% of the variance in engagement is determined solely by the manager (Gallup, 2015), making good leadership and management a critical success factor. Studies estimate that employees not engaged or actively disengaged cost the World $7.8 Trillion US Dollars in lost productivity (Gallup State of Global Workplace 2022 report), providing further evidence that organizations must address leadership talent, leadership styles, leadership development, and succession. The cost of poor succession at the executive level is even higher, with analysis showing market value losses in the S&P 1500 of close to $1 Trillion US Dollars a year (Fernández-Aráoz, Nagel, Green, 2021).