Setting clear priorities amid complexity: The ‘tightrope walk’ of modern leadership

Today, executives and board members are spinning a dizzying number of plates, creating a scenario where setting clear priorities becomes a tall task. Such a balancing act is a common theme in the executive suite and the boardroom besides, where the challenge of setting clear priorities persists.

According to newly published research from the IMD Global Board Center and executive search firm Roy C Hitchman [need link to pdf], both board members and senior executive struggle to prioritize the most impactful drivers of organizational performance.

Based on a 2023 survey of 578 respondents, 51.9% of whom were board members and 48.1% being executive team members (primarily located in Switzerland), the research highlights the travails of decision-making today.  

So, why is it so challenging for these leaders to establish clear priorities? In a nutshell: complexity. Leaders are constantly pulled in different directions by equally critical issues, characterized by uncertainty and rapid evolution, creating a labyrinth of decision-making.  

“The growing complexity in which organizations operate mean that governance is growing as a crucial differentiator of performance. To do so, it is essential that boards and executives play their distinct and complementary roles in supporting governance practices within their organization.  Quality governance relies on having the right people, structures and processes, information architecture, and governance culture in place – and  ensuring they are sufficiently resilient to conflict and disruption.” (Didier Cossin, Chaired Professor of Governance and Finance, and Founder and Director of the IMD Global Board Center)  

Today, leaders face an array of challenges beyond the traditional goal of maximizing shareholder returns. These include rising geopolitical tensions, growing regulatory complexity high inflation and interest rates, surges in populism, the constant threat of cyberattacks, and uncertainty associated with advancements in artificial intelligence  In addition, there is of course the important work of ensuring compliance and keeping up with regulation and stakeholder demands.  

To navigate this chaotic environment, strategy, innovation, and growth emerge as top areas of focus, according to the IMD/Roy C. Hitchman survey. While the importance of these areas are not surprising,  their high ranking is cause for pause. Are boards and executives playing their complementary roles effectively when it comes to strategy – or could they do more to co-create? Do they have the talent they need to innovate?   

A significant source of tension lies in balancing a well-defined strategy with the need for agility. As such, leaders need to balance the need for stability provided by a robust strategy while also retaining the ability to swiftly adjust course in response to changing circumstances. Striking the right balance between these elements requires an ability to attune to both internal and external signals – and to assess (and address) any misalignment 

Diversity and inclusion, supply chain management, as well as environmental, social, and governance (ESG) issues were less prominent on business leaders’ agendas, according to our survey. The lower ranking of these areas on the agenda suggests that while there is recognition of their importance, they may not yet be receiving the attention they deserve, relative to their impact on long-term sustainability and resilience. An alternative explanation could be that these have dropped in the face of considerable competitive pressure. When it comes to human capital, there is a notable divergence between board members and executives . Executives are more prone to prioritizing culture and behavior, while board members’ focus is oriented toward future leadership pipelines. 50% of board member survey respondents  are dissatisfied with their pipeline of future leaders, suggesting a perceived human capital risk. identifying internal high-potential candidates. 

But, building and strengthening the leadership pipeline is still a top priority for executives, too (ranked third among execs compared with first for boards). Retaining essential skills and fostering a healthy organizational culture and behavior are also crucial to boards and executives. The survey findings also indicate that the leadership pipeline is a major concern due to a lack of diversity and an inadequate process for identifying high potential internal candidates.  

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