Research study reveals major shift in the leadership characteristics required to run European businesses compared to pre-crisis period. The economic and political uncertainties in Europe over the last five years have had a dramatic effect on the skills and qualities required of European business leaders according to a new study* released today.
The composite picture of the New European Executive – one able to rekindle and sustain growth – is a leader more visionary, move driven by competence and expertise, more flexible and adaptable to rapid change, more courageous, and more strategic than before the onset of the financial crisis. The research, conducted by Korn/Ferry International, the world’s largest executive search and talent management consultancy, included interviews with over 100 senior executives within the European Union. Since the financial crisis, a new range of challenges have led to a transformation and reprioritisation of the leadership skills and styles required of the best European executives.
The most important characteristic for business leaders in Europe in 2012 is the ability to deal with ambiguity, a trait that didn’t even make the top 10 five years ago. As the direction of the economy, market movements and demands placed on businesses by European and domestic governmental bodies have become ever more difficult to predict, the report reveals that the ability to negotiate these unknowns is more vital than ever before. Managing vision and purpose – being able to define what success looks like in a flat economy and communicating that to stakeholders – is another key new attribute, ranked third in the 2012 list. Another new attribute, managerial courage, enters the list at number five as business leaders need to make bolder decisions in an environment where they frequently have to act quickly on a limited amount of information.
The research highlights how the most successful decision-making styles have evolved over the past five years. Competitive and relationship driven leadership styles have been replaced by an openness to new information and ways of doing business. Decision-making styles for the post-crisis executive need to be anchored in intellectual argument, competence and expertise rather than power and influence. The most valued competencies in the new profile, however, are exceedingly challenging to develop. Managerial Courage and Dealing with Ambiguity are typically developed through experience in challenging, often emotionally charged situations and executives with these most critical skills will be in short supply.
The report states that these changes have occurred because of the significant and fast-paced changes facing companies. One board member referred to “a business faced with cascading change…to keep pace, the company’s leaders must shift strategy more rapidly and more often, frequently with much less information than in the past.” Another senior respondent commented that “All decisions are short-term,” and added that his company was setting three-months or six-month goals rather than annual ones. Jim Tapper, Managing Director, Leadership and Talent Consulting, Korn/Ferry Whitehead Mann, commented: “Executives running companies in Europe today have a unique set of challenges to face. The future of a multi-nation currency is severely threatened, unemployment is exceptionally high and consumer confidence remains low. Fears of unsustainable sovereign debt and social tensions exacerbated by the austerity measures introduced to control it, create even more uncertainty.
“Success in this unpredictable landscape requires leadership styles and skills that differ markedly from those that dominated in a more stable business environment. Executives must now have the fluidity to manage disruption and the agility to adapt their strategies based on rapidly evolving circumstances. Recruiting, hiring, developing and retaining executives with these rare qualities is not simply a luxury; many businesses have realised that increasingly, it is a matter of survival.”