Leading through a perfect storm
HLB Survey of Business Leaders 2023Cultivating the right leadership behaviours during times of crisis
Leaders face an expanded risk radar as the 'permacrisis' is set to continue for some time. Over half of the business leaders we have surveyed felt the effects of inflation, ongoing economic uncertainty, geopolitical risks, rising resource costs and interest rates. While business leaders feel wary about the economic climate, they stand ready to weather the storm. 79% remain confident in their organisation’s ability to grow revenue in the next 12 months.
Adversity such as the pandemic have taught many to remain flexible, innovate frugally, and juggle juxtaposing priorities. In 2023, 46% of leaders continue to maintain a dual focus on survival and transformation. As part of these commitments, 35% plan to address weaknesses in talent acquisition. 67% wish to improve operational efficiency and 45% are looking to adopt new technologies, namely artificial intelligence, cloud computing, and non-digital technologies such as renewable energy solutions.
Ongoing digitisation has created new revenue streams for businesses. Yet, digital advances have also altered consumer attitudes. Fair pay, social justice, and sustainability have emerged as recurring themes in wider stakeholder conversations. This year, 51% of leaders plan to re-think their corporate ESG responsibilities and exercise a wider range of transformative action to showcase their flexibility, integrity, and accountability — the three essential leadership qualities required in times of crises.
Our 2023 HLB Survey of Business Leaders explores the essential leadership behaviours needed to successfully navigated through times of crisis. Through 575 survey responses from 60 countries and six in-depth interviews with subject matter experts, we examine both the short and long-term tactics C-suite executives are taking to survive today while evolving for tomorrow.
Flexibility: The critical attribute for ongoing success
During trying times, leaders must make risk-reward calculations every day and cut cost when necessary, Increase headcount in areas of growth or move forward with new product development while more cautious competition is sitting out on the opportunity. At a lower level, businesses must grapple with ongoing disruptions to the supply chain and talent shortages — another two areas where flexible thinking can make a great difference in outcomes.
Leaders must manage what’s happening right now and incorporate new approaches to ensure future growth. This year, 41% of respondents keep a long-term focus instead of solely focusing on short-term survival tactics. Additionally, 34% plan to invest more in human capital in order to grow in the next 12 months.
Integrity: Commitment to building a better future
Leaders must be credible to foster trust among their stakeholders, especially during trying times. 37% of business leaders agree that ‘integrity’ is an essential behaviour for successful leadership in a crisis. Despite the stressors they are facing, leaders should remain empathetic toward their staff, sensitive towards consumer demands, and committed to a business purpose beyond monetary gains.
69% of leaders have a clearly defined organisational purpose and 46% of leaders are simultaneously improving business performance and environmental, social, and governance (ESG) impacts at the same time. 37% also attempt to meet a broader range of stakeholder expectations, rather than just complete “checkbox” activities. For purpose-driven leaders, ESG investments are a competitive strength, which can help secure consumer, regulator, and investor trust and support for the long term.
Accountability: Leveraging societal controls for long-term success
In the current interconnected world, no action escapes public or regulatory scrutiny. Leaders are increasingly held accountable for the behaviour of their companies. This dynamic can affect leaders in two ways. They can either continue to hold their line and battle with ongoing regulatory pressure and progressive market demise. Or they can use the public demands as a cue to evolve into a more sustainable, admired, and profitable entity.
In this decade, more sustainable sectors will grow faster and will be better equipped to withstand new crises. Yet only 47% of respondents have a good understanding of the new ESG reporting requirements, as well as the support options global governments provide to respond to the climate crisis.
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