Executive turnover slows, but AI strategy remains unclear

Fewer business leaders are on the move than a year ago, and they’re looking to keep and develop their top talent in order to unite teams to navigate a landscape increasingly shaped by the use of artificial intelligence (AI).

That’s among the insights revealed by a global report, View From the C-Suite, that highlights the importance of tackling continued concerns about clarity around strategic objectives.

“Executive careers are lengthening, and that is good news,” Juan Luis Goujon said in a news release, “but only if organizations use that experience intentionally.”

Goujon is senior vice president and global head of ICEO, career advisory partner for talent company LHH, which publishes the annual report.

Just 19% of the more than 2,500 business executives canvassed around the world reported more than 50% turnover in their companies’ leadership over the past 12 months, down sharply from 43% who reported the same a year ago.

For the second consecutive year, a lack of clarity around strategic objectives and ineffective decision-making processes were listed as the top two hindrances to leadership effectiveness.

“In today’s increasingly complex environment, with constant disruption, the consequences of these gaps can escalate quickly,” said Rachelle Zhang, global head of ICEO Mentoring, LHH. “When leaders lack clarity, decisions slow, performance issues emerge, and change initiatives stall, which ripples across the entire business.

“Organizations that can move between strategy and execution will be better positioned to move forward in uncertain conditions.”

Leaders are only as effective as their teams, and how they go about building their teams could hold the key to the effectiveness of their business strategies.

Real goals related to AI

Respondents admitted their need for help from others in the brave new world of AI, collectively identifying “digital and emerging technology knowledge” as the largest skill gap for executives in their organization, up from eighth place on last year’s list.

While leaders clearly need help to cash in on the promise of AI, they must make sure that the make-up of their teams fits the bill. That’s a challenge, with 49% saying they believe that their team lacks sufficient AI skills and knowledge to understand the risks and opportunities.

Still, leaders are trying to make it work. A survey-high 26% listed “retaining top talent” as their most significant challenge among 12 internal factors, up from ninth place a year ago and followed closely by team effectiveness and employee morale and well-being.

“As external labor mobility slows,” the report’s authors wrote, “leadership attention is shifting inward toward team effectiveness, morale, and attention.”

Securing the right talent

In the survey, 58% of Baby Boomers (ages 62-plus) said they are not currently considering a change of role, direction, or retirement, standing in stark contrast to one year ago when just 11% said the same.

The Baby Boomers in the survey were 3.2 times more likely than other generations to cite a desire for more opportunities to develop new skills as a reason for possibly seeking a new role.

With many Baby Boomer leaders staying put, the key to sustained success for businesses may be finding leadership opportunities for Gen Z (ages 18–29) alongside established generations. It’s not an easy equation to crack, with 48% of Gen Z leaders saying that a chance for career advancement is their primary driver for seeking a new role — far and away the top response.

However, keeping emerging leaders (or attracting new ones) could come down to basic economics: According to the survey results, Gen Z leaders are 47% more likely than other generations to cite higher compensation as their main reason for considering a new role.

“Extended tenure at the top creates structural tension,” the report’s authors wrote. “While continuity strengthens leadership effectiveness in the near term, limited role movement can stall progression for the next generation of leaders.

“Without robust internal mobility, succession planning, and readiness pathways, organizations risk forfeiting future executives externally — not due to disengagement, but lack of visible opportunity and impact.”

— To comment on this article or to suggest an idea for another article, contact Bryan Strickland at Bryan.Strickland@aicpa-cima.com.