Our global team accesses the most recent research to gain new insights and thought-provoking ideation in serving our clients. One such joint report published by DDI, The Conference Board and EY, noted that C-suite professionals rank developing “next gen” leaders and failure to attract and retain top talent as their biggest challenges.

Only 14 percent of CEOs believe they have the leadership talent to execute their strategy, said the Global Leadership Forecast 2018 report. This study included data from 25,812 leaders and 2,547 human resources professionals at 2,488 organizations across 26 industries worldwide.

Among these insights, six significant leadership trends have emerged:

1. Digital is reshaping the workforce.

Digital pioneers, defined as the top 25 percent of organizations with the strongest digital leadership capabilities, financially outperform other companies by 50 percent.

The impact of a digitally transforming workplace influenced nearly every aspect of the research, revealing that organizations that have digitally-savvy leaders are significantly outperforming the average, according to the report. In sync with the financial findings, the study showed that there are substantial differences in leaders’ skills at organizations considered “digital pioneers” compared with “digital laggards.”

2. Data is creating a more inclusive, agile and fair workplace.

Organizations with more women in leadership are 1.4 times more likely to have sustained, profitable growth.

Successful organizations continue to rely more heavily on big data to inform their business strategies, and their people strategies are no exception said the Global Leadership Report. “By tying people analytics to business results, organizations are seeing how greater diversity in leadership positively affects the bottom line, and how diverse leadership capabilities better prepare organizations to handle disruption,” the report noted.

3. A diverse, purpose-driven culture defines success.

Purpose-driven companies outperform the market by 42 percent. Culture also emerged as a major driver of leadership success in the study. The data showed that, for leadership strategies to succeed, organizations must build solid cultural cornerstones, such as a clearly communicated purpose, peer coaching, experimentation and psychological safety. Diversity also plays a major role in building a successful workplace, which includes embracing gender diversity, leveraging diverse mindsets, and understanding the relationship between Millennials, Generation X and Baby Boomer leaders.

4. Do it yourself does not work.

Fifty-five percent of organizations in the top third for financial performance have formalized mentoring, according to the report.

A “do it yourself” mentality leads to leadership failure. The Global Leadership Report data provided clear evidence that leaders are increasingly expected to work in shared leadership environments, and that leaders increasingly need to build relationships with mentors to find success. Additionally, organizations that rely on a self-directed, insular approach to learning are failing to engage leaders in meaningful development.

5. Finding new sources of leadership potential is crucial.

Organizations that extend development of high-potential talent below senior levels are 4.2 times more likely to financially outperform those that do not, said the report.

In the past, organizations have often had a narrow definition of the “type” of person who has leadership potential, and have invested their resources into developing a very small group of people who meet that criteria. The report, however, showed that organizations that take a broader view of leadership potential prove to be more financially successful, feature stronger top leaders and have more women in leadership.

6. Human Resources continues to lose its influence.

On average, companies excelling at people analytics are 3.1 times more likely to outperform their peers financially. But as Human Resource’s leadership and digital skills continue to lag, attempts to adopt people analytics are increasingly failing.

Over the past three years, HR’s reputation has gotten worse, with more leaders now believing that HR is simply a “reactor” that executes commands rather than an “anticipator” that develops a people strategy that enables the organization’s business strategy. One of the primary challenges is that HR is failing to develop digital skills on pace with technology advances, the report said, which undermines their ability and reputation to drive digital transformation across the workforce.

Our experience with client companies globally continues to reveal that those that take note of the report and internalize and use the results in forward-focused strategic planning, organizational excellence and operational execution will benefit from these findings.