Keeping teams motivated and positioned to succeed is a demanding task in itself. But in today’s busy world it’s even more difficult, as leaders are challenged to engage and enable their teams while responding to disruptive shifts in how they work and what they care about in the workplace. The business environment is evolving rapidly, with increasing globalization and rapid technological change. And the workforce is changing as well, with employees increasingly diverse, mobile, and remote. New approaches will be needed to prepare for the future of work.
Based on a survey* we conducted in connection with the 2016 World’s Most Admired Companies (WMAC) rankings, the challenges are very much on the minds of senior leaders in these organizations.
Preparing for the Future
A hallmark of WMACs is strong performance and reputations amid changing business conditions. Key to their consistent success is a focus on the long term, appropriately balancing immediate demands with future business needs. Accordingly, it is not surprising that these organizations are placing emphasis on the changing nature of work. Fully 78% of WMAC respondents rate it as a “Critical” or “Very Important” focus area.
WMACs are taking steps now to prepare for what’s ahead. About three-quarters of WMAC respondents report that, looking 10 years into the future, they have taken action to determine the composition of the workforces their organizations will need, the capabilities that will be needed within their workforces, the capabilities that will be critical in their people leaders, and what will be required to attract, engage, and retain talent. In all of these areas, WMACs are taking a more proactive approach than peer companies.
Who’s Most Admired?
One of the nine attributes of reputation on which companies are evaluated as part of the WMAC rankings is quality of management. Below are the leaders for 2016 in this area:
- Walt Disney
- Goldman Sachs Group
- U.S. Bancorp
- Wells Fargo
The Next Generation of Leaders
WMACs understand that leadership will be key in the new world of work. And they know that significant changes lie ahead in this area. “A large percentage of our workforce, including leadership, will retire in 10 years,” one U.S. executive commented. “We will have a lot of generational turnover and need to make sure the next generation of leadership is prepared.”
WMACs anticipate growing the future leadership talent they will need from within. Only 11% of WMAC executives indicated that the majority of future leaders will be recruited from outside their organizations. By contrast, fully 81% indicate confidence that their companies are successfully preparing a pipeline of future leaders with the capabilities that will be required.
In the near term, shifting the perspectives of current leaders is a priority for WMACs. And they are aware of the challenges doing so will present. Seventy-five percent of WMAC respondents report that current leaders have the capabilities that will be needed to lead their organizations in the future. However, ensuring that the mindset of senior executives “moves as fast as the world around is changing in order to embrace changes and be thought leaders in this area” will be essential, as one Asia/Pacific executive noted. Which leadership capabilities will be most critical in 2025? WMAC respondents place agility, authenticity, emotional intelligence, embracing diversity, a global mindset, and working collaboratively with people in other organizations at the top of the list.
Who’s Most Admired?
One of the nine attributes of reputation on which companies are evaluated as part of the WMAC rankings is ability to attract, develop, and keep talented people. Below are the leaders for 2016 in this area:
- Goldman Sachs Group
- Walt Disney
- Toyota Motor
Winning with Talent
Securing and engaging the right talent in the new world of work is also a key focus for WMACs. And they know that success will require changes in how organizations operate and what they offer employees. As one European executive described, organizations will need to be “flexible enough to manage the changing mindset of young employee populations so that we can attract and retain the best talent, rather than those that fit in to the current environment.”
What will be important in attracting, engaging, and retaining employees in 2025? WMAC respondents are focused on supporting employees’ continuous growth and development, providing a sense of purpose and meaning in work, and offering a strong employer value proposition.
WMACs recognize that future employees will value different things in their work environments, with new perspectives on accessing information, collaboration, the nature and pace of career progressions, and flexibility in balancing work and personal responsibilities. With workforces also becoming increasingly diverse in a global economy, the challenge lies in “making the work and rewards relevant to the individual,” as one U.S. executive commented.
A Positive Outlook
While aware of the challenges, WMACs generally have an optimistic perspective regarding future changes to leadership and ways of working. Seventy-four percent of WMAC executives foresee the changing nature of work having a positive effect on the economic performance of their companies. Most also see benefits for themselves as leaders. When asked to assess personal impact, the majority reported that they feel more empowered and in control of their work. Notably, they also know that failing to adapt is not an option. Most expressed agreement that they are “leading the change; there is no way back.”
*Data were derived from a survey of 815 senior executives from companies that participate in the annual WMAC rankings. For the purposes of the study, WMACs were defined as those that are among the top 50 overall “all stars” or ranked among the top three in their respective industries.
Mel Stark and Mark Royal are vice president and senior principal, respectively, of Korn Ferry Hay Group, Fortune’s longtime survey partner for the annual list of the World’s Most Admired Companies.