What are the biggest challenges faced by business leaders today?
Andrew White, associate dean – executive education, Said Business School (AW): People used to think change happened periodically, but in many industries it’s continuous. Customers are also becoming much more powerful through social media and social networks.
Kai Peters, chief executive, Ashridge Business School (KP): Leaders are increasingly having to deal with issues such as sustainability, the need for creativity, ongoing economic uncertainty and the growing power of Asia. There is also a greater need for leaders who adopt the style of a steward and involve others.
Nick Bacon, professor of HR management, Cass Business School (NB): In recent years, many business leaders have increased shareholder value at their employees’ expense, typically by outsourcing work, off-shoring activities and holding down wages. They have neglected the need to boost long-term workforce skills, value-added jobs, living standards and job security.
This focus on reducing labour costs has failed to address the UK’s relatively low levels of productivity. Middle and lower income workers have experienced greater insecurity, growing wage inequality and cuts in pension benefits. Underemployment has increased thanks to a lack of high-quality roles, with more employees overqualified for their jobs or looking for overtime to offset low pay.
Kim Turnbull James, professor of executive learning, Cranfield School of Management (KTJ): If your organisation wants to deal better with global connectivity and competition, you need to question fundamental assumptions about how it operates. You cannot rely on your current winning formula to provide future success.
Nick Holley, director – centre for HR excellence, Henley Business School (NH): Customers have always wanted more for less and competitors have always been willing to compete in an illogical way. But the speed and scope for change is increasing. Big Data and social media are making a huge impact on the need for transparency and how quickly we (or our customers and competitors) can gain insights.
Dr Jonathan Trevor, lecturer in HR and organisations, University of Cambridge Judge Business School (JT): Greater financial constraints have led business leaders to focus on short-term gains to maintain cash flows, rather than finding long-term solutions. Also, customers are demanding more variety and personalisation of service and products instead of value for money. And there are many external factors influencing firms and speeding up the pace of change. Long-term investment is needed, but by its nature it is uncertain, inefficient and prevented by financial constraints. This creates a limbo.
Are executives suffering from a crisis of confidence in their leaders? If so, why?
AW: Particularly in industries that have got into trouble (such as financial services), the pressure on leaders is increasing.
As a society, we still have a need for leaders, but we project onto them a desire to serve a wider agenda. In some cases we have seen them as being very self-centred, for example in executive pay scandals.
KP: In times of uncertainty, people look for clarity and a distinct plan. Leaders are not in a position to offer the answers – but they can help ask the right questions.
NB: Employees need a pay rise. The public lacks confidence in business leaders whose incomes are increasing and where shareholders receive greater returns while employees’ living standards fall. This could be redressed by fairly sharing the gains of economic recovery.
KTJ: In a period of uncertainty you need to be able to channel people’s anxieties into productive, purposeful change. Leaders need to create environments where people can come up with new ideas and solutions.
People want leaders they can identify with, who walk the talk. We need much more than top-down visions and mission statements.
JT: If anything, there is too much confidence in leaders who are highly paid and therefore expected to have all the answers and lead their organisations successfully.