Executive Leadership Trends with John Morgan, LHH

Bill, thanks so much. Great to be back as always, really a pleasure.

Yeah, sure. I can't believe the time has gone by that quickly, Bill, but it's a pleasure to be back. Hello everybody, I'm John Morgan. I'm the global president for LHH's career transition and leadership development businesses, which also includes our executive coaching businesses. So what have I been up to? We've been doing a lot of great stuff at LHH over the past couple of years. Our core business is still really the same and we really as an organization exist to really help professional-level talent in the area of recruitment, upskilling, and career transition. And our services are really focused on both temporary and permanent professional search solutions, executive search, but also we're the leading provider of executive coaching through our Ezra brand. And we do a ton of work in the career transition space. We're actually the world's largest outplacement provider. So in the last three years, really all of our businesses have been growing. We've supported a lot of massive restructurings in the workforce that have gone down, especially last year. And then our space in executive coaching has really grown and our whole executive practice really has been taking off in executive search and executive career transition. And that's what's really spawned some of the recent research that we've been doing around what are the top challenges that executives are facing right now. So it's been a busy couple of years. The business is going really well. I think the work that we're doing is really great and meaningful, and we're happy to be doing more of it and happy to share more about that with you and your audience today.

Yeah, I'm happy to. As I mentioned, we have a lot of work that we do in recruitment and in development and in transition with the executive population. So the research, ICEO is a shorthand for the International Center for Executive Options. It's the brand we use for our executive career transition practice. And really it's the work that we do there where C-suite executives are looking for their next leadership role, but as I mentioned we also work with executives that are currently leading organizations and we provide them with peer-level mentoring and one-on-one advisory support. So the reason why we did this research is because we work across various populations with executives and we really wanted to understand what's on the mind of executives today and also the HR leaders that support them. So we did a survey at the beginning of the year to over 2,200 C-level executives from our clients across a multitude of global markets, North America included but also representative large markets in Europe and Asia and Pacific. And what we're really trying to do is to try to better understand what are the leadership challenges right now, any country differences, and also what are the potential HR support areas that are needed and how to best handle the current leadership challenges. And so as the report showed, there's lots of challenges and they're not so simple.

Yeah, sure. I'll tell you a little bit about some of the things that came out of the research. I mean, I think before the research, first of all, I think we all know that the climate that executives are facing today and the business topics are really more complicated and more challenging than ever. Everything from return to office and hybrid working to some of the talent scarcity issues that we have, then we have obviously lots of ESG issues that leaders have to think about, geopolitical unrest, inflation, economic issues in different countries, and then obviously we have a rapid disruption in technology and AI. So it's a perfect storm for executives. There's just a lot of stuff to really navigate, difficult time to lead. When we looked at our research, I would say probably three key themes and trends emerged. The first is that technology-related challenge is really something that jumped out of our survey. So for example, among the executives that we surveyed, tech disruption including AI was the top external challenge — 29% of respondents signaled that — and also digital transformation was the top internal challenge that executives signaled. And we also surveyed our HR leaders, and HR leaders also mirrored that by identifying digital transformation as the most pressing internal challenge. Second thing that really jumped off was what we call a leadership confidence challenge. Executives unanimously acknowledge the existence of capability gaps within their leadership teams. Some of the reported gaps span across a lot of different competencies — things like strategic thinking and innovation to creative problem solving. A real lack of confidence, I think, that leaders are lacking, some competency gaps in this type of environment. And I think executives are really struggling sometimes to make decisions during pivotal moments that they haven't experienced before. We found 24% of respondents cited strategic thinking and decision-making abilities as the top capability gap within their senior leadership teams. And then the very last one I wanted to mention was the overall geopolitical and economic shift. We found only 27% of CEOs really feel optimistic about the global economy. Respondents broadly agree that the instability in geopolitics right now poses the greatest threat to their business, but also new regulation, inflation, and skill shortages. These are some of the things that are on the top of the CEO's list of worries right now. So I think when you add all those challenges up right now, we also have to be worried right now about the burnout issue and the wellness issue in the C-suite, because I think it's very real given all these different types of challenges that they're seeing.

It definitely is. One of the points from the research, and just the public research as well, not only ours, I mean you actually saw last year that one-third of the newly appointed S&P 500 CEOs were under the age of 50. So you definitely have what I would say is a by and large increasingly youthful leadership population that is going to need help with some of these capability areas.

Sure. I think it's probably summarized in two main areas. One is around helping to fill some of these noted capability gaps that executives are indicating, or that HR leaders are indicating that the executive teams have. And the other is burnout. We did find in the research, 62% of our executives that we surveyed say that their senior leaders are overworked or burnt out. 60% of executives would like to have more support options available to them. So one of the things that we heard was that the most desired form of support was really focused on bespoke one-on-one support, like mentoring and coaching particularly. We also heard that 74% of executives reported obstacles to their well-being goals that were largely work-related. And when you look into the research further and think about mentoring and coaching specifically, again we found that the focus was really skewed towards decision-making — so that's the business part — and then burnout and well-being, the sort of work-life balance part. And we see a real lot of peer mentoring and advisory solutions being offered to senior executives to really help them with some of those top business performance gaps. Everything from how to navigate ethical decision-making, especially around AI, but also reviewing business strategy amidst all these external challenges. And then classic things like change management skills and innovation and problem solving — things that leaders always need help with. So these are some of the things that we've been seeing in the types of support that's been needed. And then when you look at burnout, burnout is also something that HR is really helping their executive population with more and more, and I have a couple examples of things that we can share with you about what we've been doing. This is where we provide generally business coaching, and that's one of the services that we provide. But what we've recently done with our Ezra brand is we've done a partnership with Headspace, which is a wellness app. And here I think we can no longer ignore the focus on business and wellness together. So anyone that's in our coaching program — any executive that's in our coaching program — gets access to the Headspace mental health app, which allows people to really also focus on wellness: guided meditation, mindfulness practices, sleep and focus among other wellness topics. And I think offering this in addition to real business advisory is what's really needed for the executive population right now.

Yeah, absolutely. So turnover — executive turnover is a real challenge. It spiked in the first quarter of this year. I think burnout plays a big role in that. So again, I think first of all helping executives understand that this is a realistic part of the job, and let's not make it taboo. Let's understand that every young executive or seasoned executive is at risk of burnout, because the nature of leadership has really changed, gotten more complex, I would say gotten more stressful. So if you as an HR practitioner can proactively come to your executive with that solution — if you can actually come to your CEO and say, 'Hey, the leadership team would benefit by going through some team development work, the leadership team would benefit by focusing on some mindfulness and some wellness' — so sort of bringing it to their attention without making them ask for it, I think is one thing that the HR population can do. And I think executives are obviously seasoned leaders, but at the end of the day they're no different than employees. They have stressors, they have families, they have issues that are going to create stress and they can't ignore it. So again, making sure that we focus on the executive population and give them those support and give them those tools and proactively do that, I think is a real benefit that the HR adviser can provide.

Yeah, sure. We get a lot of firsthand trends from our recruiting clients on this topic, and it does largely depend on the type of company and the industry and the type of role. You have some companies, you know, with a high level of turnover, especially in roles that might be transactional and or maybe further downstream from the customer — you might have 40%, that's totally fine because it's just a high-turn type of job. But on an aggregate level, if you're talking about the Fortune 1000 and you're saying to a CEO, you know, what's the acceptable level of turnover, they're probably going to tell you 10 to 15% generally. And within that population, they're going to say basically we want to minimize regrettable turnover. So the combination of voluntary leavers and involuntary performance management — that's going to be somewhere from 10 to 15% for most. With HR leaders and executives really wanting to minimize regrettable turnover, that's really the KPI. They want that to be zero. They want to keep their best people, and they want to be able to quickly part ways when they have to with employees that are not performing.

Yeah, sure, of course. Thanks again for the spiel. I'm on LinkedIn, John Morgan — you can connect with me on LinkedIn. I'd love to connect with you to share more of my content and information, but as well as about the company LHH. Our website is lhh.com. Again, we are one of the three GBUs of the Adecco Group, which is the world's largest global staffing company, based in Zurich. So the Adecco Group website or lhh.com is totally fine. And you can reach out to me at [email protected] with any questions at all about the research that we talked about today.