Mike Canning, Strategy & Innovation Leader, Deloitte Consulting LLP
In my leadership role, I am fortunate to have the opportunity to work with some of the most innovative and dynamic leaders in business. In the face of a challenging and quickly changing global marketplace, I see many leaders who are thoughtful in their management approach, and respond with smart strategies and action.
Making smart decisions as a business leader can be like playing chess. We all know business is more complicated than a board game, but there are some synergies worth noting. For instance, in business and chess, leaders must consider several strategies before achieving an ultimate goal. And moves, whether great or small, can have a significant impact on current and future results. It’s also essential to retain core talent to help you accomplish the greatest success – you’re only as strong as your team. It’s no coincidence that, like in business, success in chess ultimately comes down to confidence and being bold enough to act not knowing the ultimate outcome.
Deloitte recently released its Business Confidence Report 2016: The bold organization—innovate, lead, attract. We interviewed 600 top-level executives, split between 300 C-suite executives (CXOs) and 300 CXOs-in-waiting (CXOWs). The report identified three core areas that may require improvement from current and future leaders in order to outperform the competition:
- The relationship between innovation and technology
- Finding, developing, and retaining the right talent
- The need for bold leadership
Our survey found that leaders have doubts about how exactly to transform their businesses for future success. It’s true that being smart and thoughtful is one part of the equation, but leaders should also be bold in action and have confidence to transform their business for the better.
From my meetings with clients, it’s clear to me that business leaders continue to try to prioritize innovation. Part of being a strong leader is having the ability to grow their organization’s existing business while simultaneously creating new opportunities to innovate. While it is challenging to find this balance, it is imperative in this day of rapid change.
Our survey results show that businesses are not investing in the necessary solutions to overcome innovation challenges, such as the pace of change with technology and/or the lack of investments in products or processes. Having said that, I have seen some of our clients starting to invest in Transformative Technologies that are enabling significant innovation possibilities, particularly in organizations’ core business models.
I was surprised to see that less than 30 percent of companies are prioritizing innovation outside of the “core” in areas such as staff, organizational models, business processes and pricing. Instead, a majority of leaders focus on traditional forms of innovation like products or services and customer service.
It also appears leaders aren’t encouraging innovation from their teams. Only half of surveyed CXOs and CXOWs are rewarding innovation. Less than half (41 percent of CXOs and 40 percent of CXOWs) offer incentives for risk-taking.
Innovation may be hard to come by if executives are thinking traditionally. Instead, they should think bolder whether through partnering with other organizations or infusing innovation through all aspects of their business model as well as their approach to culture, talent and collaboration.
Stemming the Brain Drain
New technologies and new ways of working are creating a skills gap. Our survey found that 90 percent of CXOs and CXOWs feel at least 1 in 4 of their top talent will leave their company before joining the senior ranks. Business leaders know it, and want to fix it, but fixing is easier said than done.
Leaders told us it is difficult for them to make the right investments in talent primarily because of the speed at which technology and markets change. Almost half of surveyed executives admitted their companies are doing nothing to address this skills gap – a dangerous issue to ignore.
Companies also worry that they do not have a deep pool of future bold leaders. It’s especially interesting to me that CXOWs have strong doubts about whether their rising leaders have the ability to be bold. When only 44 percent of CXOs and 36 percent of CXOWs are successfully demonstrating bold leadership, it’s pretty telling.
The bold leadership requirement
We define bold leadership as: setting ambitious goals, inviting feedback from colleagues at all levels of seniority, innovating and looking for new ways of doing things, proposing ideas their company might consider controversial, taking risks, as well as building strong teams and empowering them to succeed. A whopping 92 percent of respondents believe that their leaders do not regularly demonstrate all of these aspects of “bold leadership.”
Nearly all CXOs (97 percent) and CXOWs (98 percent) stated that achieving breakthrough performance and growth requires bold leadership. And yet, most companies are not cultivating these traits in their future leaders or their current leaders are not being bold. Bold leadership is a necessity in business today and its absence is a key deficiency for businesses to take advantage of with their competition.
As leaders, we always want our business to thrive and flourish, and it can be daunting to solve for problems that are critical for business success. Confidence is part of the equation, and it’s encouraging that business leaders feel they have that. Now, we must couple confidence with bold action and a commitment to innovation, fostering talent, and demonstrating bold leadership. By doing so, we can align that confidence with success and position business to thrive in today’s rapidly changing environment.
As used in this document, “Deloitte” means Deloitte Consulting LLP, a subsidiary of Deloitte LLP. Please see www.deloitte.com/us/about for a detailed description of the legal structure of Deloitte LLP and its subsidiaries. Certain services may not be available to attest clients under the rules and regulations of public accounting.