Global Leadership Forecast 2018

25 Research Insights to
Fuel Your People Strategy
Australia & New ZealandGlobal Leadership Forecast 2018

Actionable Intelligence for Leadership Imperatives
Global Leadership Forecast 2018—a three-way collaboration with Development Dimensions International (DDI), The
Conference Board, and EY—is the eighth Forecast since DDI began the stream of research in 1999. It’s also one of themost expansive leadership research projects ever conducted. This report summarises dozens of practical, evidencebased recommendations for critical business issues. These range from digital transformation to gender and generational
diversity to the roles of purpose and culture in building an effective, sustainable leadership strategy for a digital age.
This research integrates data from 25,812 leaders and 2,547 HR professionals across 2,488 organisations across the globe.
Not only are these perspectives numerous, but they are also diverse and highly representative of the business context
facing global enterprises. The research, which spans more than 1,000 C-level executives and 10,000 high-potential
employees, includes 54 countries and 26 major industry sectors. Our full set of leader demographics is depicted below.

© Development Dimensions International, Inc., The Conference
Board Inc., EYGM Limited, 2018. All rights reserved.

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Global Leadership Forecast 2018

GLF Insights for Australia/NZ
As part of the larger Global Leadership Forecast 2018 study, this report highlights findings on the current state ofleadership and leadership practices in Australia/NZ. Based on survey responses from 868 leaders and 89 HR professionals,
these results provide actionable insights specifically for Australia/NZ’s leadership context and business market.
Throughout this report, findings are presented for both Australia/NZ as well as the global sample of leaders. Where theglobal results are presented, they will be accompanied by the global icon [] to indicate findings are based on the

global sample of leaders or HR professionals. Unless accompanied by the global icon or otherwise noted, findings
throughout this report can assumed to be specific to Australia/NZ.
This report focuses on insights specific to the Australia/NZ region. The global report can also be used as a comparative
benchmark for Australia/NZ-specific findings presented in this report. We are confident these results will provide new
insights for Australia/NZ’s leadership practices and hope the report will stimulate your own ideas about how to enhanceyour organisation’s leadership capabilities.

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Global Leadership Forecast 2018

A Research-Driven Road Map for Leadership Acceleration
Australia/NZ insights from the Global Leadership Forecast 2018 centre on 25 findings (listed in the Table of Contents on
the facing page) about the state, context, and future of leadership. The findings are clustered into six categories:
1.

Leaders at the Core—leadership and talent are top agenda items for CEOs, and the readiness gaps continue to besignificant.

2.

Digital & Data—how digital and data-rich business contexts accelerate the need to build the right capabilities tothrive.

3.

Growth & Potential—proven practices for aggressively developing leader talent and bench through a robust
learning and growth engine.

4.

Leader Diversity—understanding and advancing gender and generational diversity in leaders to achieve thediversity dividend.

5.

Cultural Drivers—the powerful forces that can propel—or if lacking, will cripple—rapid, disruptive change.

6.

The HR Opportunity—how HR can elevate and extend its influence on business outcomes to deliver on this strategic
agenda.

Each of the 25 findings shares a common format: We describe the context for the business issue, visualise the key data,
describe the key leadership implications, and provide specific guidance for converting research evidence torecommended actions of two types:
First, “Where to Start,” practical steps that organisations can take now to build, reinforce, or remedy theirfoundation for evidence-based leadership practices and systems, drawing on notable outcomes from theresearch. Typically, these are actions that many—but far from most—organisations have in place, but that areoften overlooked as key building blocks on which more advanced elements of leadership strategy rely. That is, though
they’re often common sense, they’re rarely common practice.
Second, “How to Excel + Differentiate.” The research’s wide-reaching scope includes hundreds of organisations
that are prototypes for rapid advancement toward one or more challenging leadership and businessobjectives: digital transformation, gender diversity, high-potential management, people analytics, and instillinga sense of purpose, among many others. This section of each finding shows how organisations can draw onproven, high-impact leadership practices to gain a sustained competitive advantage by harnessing their leaders’potential at all levels and from all backgrounds.

After the 25 findings, which are designed to be modular and self-contained so that they can be used
individually, we close Global Leadership Forecast 2018 with two integrative summaries:First, an integrated view of six leadership megatrends—core, overarching themes that we found emerging again
and again across the findings—that collectively chart a course for the trajectory of leadership and serve as broad
guiding principles for leadership-directed action.

Second, a leadership practices scoreboard showing the “in-place” frequency of 34 leadership practices inAustralia/NZ and the links from each to three critical outcomes: Leadership Program Quality (in the eyes of theleaders/learners who are the “customers” for these programs), Leadership Bench Strength (supply of ready-now
leaders to fill critical roles over the next three years), and Financial Outcomes (an externally gathered composite ofoperating margin, EBITDA, revenue growth, and return on equity).

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Global Leadership Forecast 2018

Table of Contents> Leaders at the CoreFor CEOs, It’s Still About Developing Leaders: Strategy Is Nothing Without Effective Leaders to Execute ................................ 4
Leader Capability Stalled Globally: But what about Australia/NZ? ................................................................................................. 6
Leadership Strategy: The Forgotten Foundation of Business Planning ............................................................................................. 8
Purpose-Driven Leadership: Inspiring and Leading in a Complex Environment .......................................................................... 10> Digital & Data
Digital-Era Leadership: Ready or Not, Digital Competence Is Already Differentiating Winners from Losers .......................... 12
Accelerating the Digital Journey: Changing Old Leadership Mindsets and Ways of Working ................................................. 14
Leading with Data-Driven Decisions: The Culture and Skills Driving Higher Returns on Data..................................................... 16
Why Technology Leaders Are Failing: The High Cost of Low-Chance Development ................................................................. 18> Growth & Potential
Rethinking Leadership Potential: Why Broader Is Better ................................................................................................................... 20
Meeting the Needs of the Modern Learner: Technology Gains Its Footing, but It’s a Slippery Slope ...................................... 22
Making the Most of High-Potential Talent: Avoiding a Mismatch Between What They Want and Get .................................. 24
Performance Management: Are Ratings Overrated for Growing Leaders? ................................................................................ 26
Want to Be a Leader? Get an Early Start ............................................................................................................................................ 28> Leader Diversity
The Rise of the Digital Natives: Are Millennials Ready to Lead? ...................................................................................................... 30
Generation X-Change: Don’t Underestimate the Powerful Influence of Gen X Leaders .......................................................... 32
Diversity Leaders: How Top Organisations Are Growing Strong with Women in Leadership...................................................... 34> Cultural Drivers
Build a Coaching Culture: Want to Be a Better Leader? Ask a Peer or Employee ..................................................................... 36
Mentoring for Impact: How to Maximise a Critical Leadership Experience.................................................................................. 38
Collective Leadership: Leading for Value Across Organisational Boundaries ............................................................................. 40
It’s Time for Teams in Leadership: The Power of a Shared Leader Perspective ............................................................................ 42
Adjusted for Disruption: Top Drivers of Organisational Success through Complexity and Change ......................................... 44
No Engaged Workforce Without Engaged Leaders: To Raise Leader Engagement, We Need to Raise Up Leaders .......... 46> The HR Opportunity
HR’s New Role: Are They Up to the Challenge?

.......................................................................................................................... 48

HR Under Pressure: Falling Behind in the Race to Transform ............................................................................................................ 50
People Analytics: Reversal of Fortunes ................................................................................................................................................ 52
Leadership Megatrends and Payoffs ................................................................................................................................................... 54© Development Dimensions International, Inc., The Conference
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Global Leadership Forecast 2018

For CEOs, It’s Still About
Developing Leaders
Strategy Is Nothing Without
Effective Leaders to ExecuteMore than 1,000 C‐level executives, worldwide, identified the issues they expect to command their attention in the
coming year. Of the 28 challenges from which they could choose, their biggest concerns weren’t headline‐worthy global
issues like political instability, climate change, terrorism, or a global recession. Rather, the top challenges vying forleaders’ action focused on their own leaders. Developing “Next Gen” leaders and failure to attract/retain top talent wererated in the top five by 64 percent and 60 percent of global respondents, respectively. In Australia/NZ, developing “Next
Gen” leaders and failure to attract/regain top talent were rated as key challenges by 53 percent and 79 percent,respectively. Leaders clearly indicated that top talent and effective leaders will be needed to address the myriad current
challenges and to position their organisation for future success. The global Top 10 Challenges are shown below alongwith the percent of global and Australia/NZ executives that rated each challenge in their top five.

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Global Leadership Forecast 2018

These findings are consistent with The Conference Board’s 2017 CEO Challenge* study, which asks the same question of
global CEOs each year. In 2016 and 2017, these two challenges placed among the top five choices globally. Senior leaders
are acutely aware of the importance of focusing on strengthening human—and, specifically, leadership—capital.
Of those Australia/NZ leaders surveyed in Global Leadership Forecast 2018, only 42 percent believe their organisation’s
leadership development program to be of high or very high quality, with 26 percent rating “leadership assessment” and24 percent rating “leadership performance management programs” to be of high or very high quality. Average program
quality translates into moderate confidence in leadership effectiveness. When asked to consider their own effectivenessin the critical leadership skill of identifying and developing future talent, 53 percent of respondents rated themselves
highly effective or very highly effective, which leaves 47 percent of leaders (those who are only moderately effective, oreven less skilled) to shape the next generation. And with 57 percent never having been mentored, how do we expect thatthey’ll know how to mentor others?

HR Paints a Bleak Picture
In Australia/NZ, identifying and developing future talent was ranked as the number 1 skill leaders will need in the next
three years. A significant gap exists between the criticality of this leadership skill and leaders’ own assessment of theirability to successfully master it. The net result would be a weakened leadership cadre. Only 31 percent of Australia/NZ
HR professionals rated their organisation’s bench strength—the supply to fill critical leadership positions over the next
three years—at any level of strength (slightly strong, strong, or very strong) and, on average, only 47 percent of positions
could be filled by an internal candidate immediately. Thirty‐nine percent believe their succession management systemand processes to be of low or very low effectiveness.
In terms of quality, HR professionals’ assessments of their organisation’s leadership development program were lower
than the leaders’. Responses do not signal a bright future: Thirty‐one percent have a weak or nonexistent relationship between annual strategic plans and their own plans togrow leadership talent.
 Fifty‐four percent do not have well‐integrated and strategically aligned leadership development programs orprocesses.
 Ninety‐one percent see their leadership career planning/pathing systems as only moderately effective or worse.
 Seventy‐nine percent do not believe their leaders have high‐quality, effective development plans.
 Forty‐eight percent do not use information from assessments and simulations to make leadership hiring andpromotion decisions.
 Thirty‐one percent do not have a program to develop high potentials, and 39 percent of those that do don’t
measure the effectiveness of the programs.
 Ninety‐three percent do not exercise negative consequences when leaders fail to develop leaders on their team.
 Fifty‐one percent do not know the up‐to‐date status of leadership talent capability across the organisation.
* Mitchell, C., Ray, R.L., & van Ark, B. (2017, January), The Conference Board CEO Challenge® 2017: Leading Through Risk, Disruption andTransformation, New York, The Conference Board, https://www.conference‐board.org

WHERE TO STARTWith all stakeholders, begin with a candid assessment of
all leadership development programs and processes at allleader levels.



Create a plan to integrate all efforts with the twin goals of
supporting leaders’ success now and building a solid
pipeline of successful future leaders against the profile
your organisation will need.



HOW TO EXCEL + DIFFERENTIATECreate or update a leadership capability model that isembraced by senior leadership and aligned with theorganisation’s strategic goals.

Ensure that leaders have the skills to identify and develop
top talent.



Review and enhance other talent management systems
to support the creation of a strong cadre of leaders.

© Development Dimensions International, Inc., The Conference
Board Inc., EYGM Limited, 2018. All rights reserved.

5

Systematically monitor progress and gather data to
determine the business impact leadership development
processes have on advancing the organisation’s strategic
goals.



Articulate the impact in terms of the organisation’s ability
to execute the strategy and create a plan to address
deficiencies.



Deepen the strength and quality of your leadership bench.

Partner with business leaders and the C-Suite to design,deliver, and assess the effectiveness of all leadershiprelated actions. Enlist these individuals as coaches,
mentors, and champions.



Adapt performance management processes to holdleaders accountable for successfully developing theirteams, particularly emerging leaders.

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Global Leadership Forecast 2018

Leader Capability
Stalled Globally, but what
about Australia / NZ?
Who’s got it right, leaders or HR?
“Everything is different from today on.” So, supposedly, said Austrian composer Joseph Haydn after hearing Beethoven’s
Symphony Number 3, the Eroica, more than two centuries ago. While many who first heard it were shocked, it changed
the very essence of classical music and went on to be one of the world’s most beloved symphonies. The quote aptly
reflects today’s leadership landscape. Never in the nearly 20 years we’ve been collecting data for the Global Leadership
Forecast have we seen the array of forces that are disrupting the essence of great leadership. “Competitive pressure to
innovate and shake up established markets is too powerful for companies and the people who lead them to ignore.”*And, never has the quality of our leaders to guide us into uncertain futures been more critical.
> Australia/NZ Leadership Quality: Who’s got it right, leaders or HR?

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Global Leadership Forecast 2018

Leaders Ready for Today? And What
About Tomorrow?
We’ve followed perceptions of leadership capability
over the years that indicate organisations’ progress inbuilding stronger leadership capability. Are they
improving? Despite billions spent on leadershipdevelopment annually, the answer globally, yet again,
is no! But, in Australia/NZ, this may not be quite astrue as we have witnessed more rapid improvement
over the past 3 GLF studies according to leaders.
As shown in the figure at left, the improvement inleadership quality, as rated by 868 Australian/NZ
leaders, is occurring at a faster pace than observed
globally. The percentage of leaders providing highratings of leadership quality (in the excellent/very
good categories) has risen from 34 percent in 2011 to 46 percent in 2018, a 35 percent overall improvement. However,when HR evaluates the quality of their organisation’s leaders, the number has declined from 23 to 17 percent (a 26
percent overall decline). The net effect is a 2.6x greater divide between leader and HR professional perspectives on thequality of leadership between 2011 and 2018. The question is why?
Overall quality varies widely by country, industry, and level. Leaders, for example, rated senior leadership quality
considerably higher than the quality of those in first‐level positions (53 versus 35 percent). While first‐level leaders areless experienced in a leadership role, they’re likely to have the most profound impact on their teams’ engagement andproductivity.
We also took a forward view by asking HR to rate the strength of their current pipeline to meet their business needs overthe next three years. The results are equally discouraging. 17 percent of Australian/NZ HR professionals considered their
future bench to be very strong/strong in Global Leadership Forecast 2014, however, that number has dropped back toratings from Global Leadership Forecast 2011 to 9 percent in this survey. A full 69 percent of HR respondents rate their
future leadership bench as slightly weak or worse. Again, these ratings vary considerably by industry.
The figure above lists some key countries/regions and industries in terms of leadership quality and the accompanying
rating of future bench strength. One thing is very clear: The current quality of leadership earned higher marks thanbench strength three years out. Given the seismic disruption in almost every industry, keeping ahead of the leader
quality and quantity supply chain will be a considerable challenge.
Shortage of current quality and projected future bench strength can hinder your organisation’s ability to fill critical
positions with ready‐now internal leaders. On average, Australia/NZ respondents feel they can fill only 47 percent of
their critical roles with strong internal leaders, leaving them to search outside for often‐costlier, higher‐risk external
candidates.
At the end of the day, we need to ask ourselves if these numbers have any real impact. It turns out that companies in the
top third of financial performers are twice as likely to have high‐quality leaders than those in the bottom third. This is adifference that can easily translate into millions of dollars for any single company.
* Hoque, F. (2015, November), 5 Habits of Truly Disruptive Leaders, Fast Company. https://www.fastcompany.com/3052725/5‐habits‐of‐truly‐
disruptive‐leaders

WHERE TO START

Analyse the strengths and gaps in your leadership benchagainst your business goals. This will enable you to bettertarget your limited resources while having the greatest
impact on your business.

Keep your eye on disruptions to your business and how
they affect your success profiles. The requirements forleadership excellence are changing constantly.



HOW TO EXCEL + DIFFERENTIATE

Become a champion at using predictive analytics to
improve the quality of hiring and promotion decisions.

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Consider a more systematic approach to developing along-term leadership strategy connected to your business
plan.



Integration of talent systems is key. For example, superior
development will not compensate for poor hiring systems.



A majority of organisations still do a poor job of measuring
the impact of their leadership development efforts.
Improvements will never come unless you know what aworthwhile investment is and is not!

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Global Leadership Forecast 2018

Leadership Strategy
The Forgotten Foundation of Business Planning
Only 9 Percent of Australia/NZ CEOs Have the Leadership Talent to Execute Their Strategy
The data in Global Leadership Forecast 2018 shows that organisations with effective leadership talent outperform theirpeers. Yet very few organisations manage this high‐value asset in an integrated, cohesive way. Even after spending morethan $50 billion annually* on developing their leaders, many companies still don’t have the bench strength to meet their
future business goals. And despite the spending, investments are often fragmented and see a lack of returns. Leadershipmodels and development programs abound; few tie to business goals. Worse yet, there’s scant evidence that they
actually work. What’s needed is a coherent, integrated leadership strategy. A well‐crafted blueprint ensures thatcompanies have the right talent, at the right cost, and with the right capabilities to deliver today and into the future. Yet,
we found only 25 percent of HR professionals in Australia/NZ feel their organisations have an effective leadershipstrategy. Companies that do have such strategies in place report better returns on their investment in talent. They
consistently feature deeper leader bench strength and stronger leaders at all levels.

> Preparedness to Meet Key Business Challenges with an Effective and Ineffective Leadership Strategy© Development Dimensions International, Inc., The Conference
Board Inc., EYGM Limited, 2018. All rights reserved.

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Global Leadership Forecast 2018

What Differentiates Organisations with Effective Leadership Strategies?
The advantages of having a leadership strategy in place are enormous, beginning with leader preparedness to meetbusiness challenges. The graphic at the far left shows the leader‐readiness advantages of an effective leadership strategy.

So, What’s in an Effective Leadership Strategy?
Senior line managers define “leadership strategy” as having a supply of capable leaders to meet both their short‐ and(ever‐changing) long‐term business needs. A sound leadership strategy consists of the four elements defined below. We
looked at the effectiveness ratings for each element, comparing organisations across the globe having a leadershipstrategy in place to those that do not.
 Defines the competencies required for success. We see a much higher level of effectiveness of this basic
practice in organisations with a leadership strategy versus those with no strategy (82 percent versus 49 percent).
 Models supply and demand as part of the strategic planning process. Organisations with an effective
leadership strategy are 4.3 times more likely to adeptly forecast future leadership demand than those without.
 Ensures that all core leadership processes align and are consistently reinforcing the appropriate
skills/capabilities/mindsets. All major talent systems are more effective in organisations with stronger leadershipstrategies. For example, when there is a leadership strategy in place, 70 percent of organisations report having
effective development programs in place versus 27 percent in those organisations with no strategy. The same
magnitude of difference applies to succession management (51 percent versus 15 percent). These systems comprisethe foundation for delivering a steady flow of leaders through the pipeline.
 Measures the impact of leadership spending on performance and potential. Companies with effective
leadership strategies are 4 times more likely to gather business‐impact measures on their talent initiatives.

What Are the Performance Benefits?
We found that an investment in formulating and executing an effective leadership strategy can have a significant impact
in several other areas: Working with the business to articulate a leadership strategy improves HR’s strategic impact. Organisations witha leadership strategy are 2 times more likely to rate their HR teams as strategic advisors.
 Of organisations with effective strategies, 56 percent have overall high leadership quality versus 20 percent with
less‐effective strategies.
 Future bench strength, a critical lead outcome measure, is much stronger with an effective strategy (32 percent
versus a dismal 5 percent).
 Stronger ability to fill critical open positions with internal candidates (56 percent versus 38 percent). The cost ofeven a few senior positions remaining open far exceeds the investment required to put a sound strategy in place.

Should HR Be Involved in Strategic Planning?
Leadership strategy should never stand alone from an organisation’s strategic plans, yet only 17 percent of Australia/NZ
HR professionals are involved in strategic planning from its inception. This diminishes the role they can, and should,
play in connecting the business to required leadership capability.
* Kellerman, B. (2012), The End of Leadership, New York, HarperCollins.

WHERE TO START

HOW TO EXCEL + DIFFERENTIATE

Translate your strategic plans into leadership and talent
implications. Assess risks and areas where poor leadershipcapability will impede execution.
Focus on execution. Like any other strategy, leadershipstrategy often fails more due to lack of execution thanintegrity. Make sure to align all components of successful
execution: rewards, metrics, resources, and skills.
Look carefully at deploying initiatives across theenterprise. Ensure the most efficient and effective
deployment of your limited resources.

© Development Dimensions International, Inc., The Conference
Board Inc., EYGM Limited, 2018. All rights reserved.

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Use robust predictive analytics to pinpoint the likely gaps
in your leadership supply chain. This will help you focus
your efforts.
Orchestrate all components of your leadership strategy.
They do not stand alone. Forecasting demand is worthless
without accompanying initiatives to close the gaps.
Prove the return on your leadership investment. Unlike
every other function, HR typically fails to seriously evaluate(and thus justify) the impact of their spend onorganisational performance.

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Global Leadership Forecast 2018

Purpose-Driven Leadership
Inspiring and Leading in a Complex Environment
Purpose is an aspirational reason for being that inspires and provides a call to action for an organisation, its partners,
stakeholders, and society as a whole. EY Beacon Institute research* has consistently shown that purpose enables
organisations to perform well in times of volatility. The research joins a growing body of evidence demonstrating that astrong and active purpose raises employee engagement and acts as a unifier, makes customers more loyal andcommitted to working with you, and helps to frame effective decision making in an environment of uncertainty. Global
Leadership Forecast 2018 finds that getting purpose right builds organisational resilience and, crucially, improves long‐term financial performance as seen in the figure below. We found that the real benefits come when leaders walk thewalk by behaving in a manner that exemplifies their organisation’s purpose.

> Impact of Purpose on Financial Performance© Development Dimensions International, Inc., The Conference
Board Inc., EYGM Limited, 2018. All rights reserved.

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Global Leadership Forecast 2018

Why Make Purpose Your Guide?
Of 1,500 global C‐Suite executives surveyed, 84 percent say their business operates in an increasingly disrupted
environment. In this world, purpose is a North Star—a fixed point to help navigate through change and uncertainty.
To understand the impact of purpose, we identified three types of organisations: Those without a purpose.
 Those with a purpose statement.
 Purposeful organisations where leaders bring the stated purpose to life through behaviours.
We found clear evidence that companies in this third category are earning a significant performance premium.

Why Isn’t Just Having a Purpose Statement Enough?
Companies with only a purpose statement realise considerable performance improvements across many outcome
measures. However, we discovered that purposeful organisations (those with active leadership support) get evenstronger financial performance in the short and long term—and are better equipped to deal with the fast‐changing,competitive environment.

More Benefits of Being a Purposeful Organisation
The advantages to being purposeful are many: Engagement. Purpose is a key driver of employee engagement. In previous research*, 96 percent of leaders said
that purpose is important to their job satisfaction. In Global Leadership Forecast 2018, we found that having apurpose statement not only has a positive effect on engagement overall, but 25 percent more leaders worldwide getmeaning from work and energy levels are 60 percent higher.
 This effect is amplified in purposeful organisations, where engagement levels are 12 percent higher and employees’
intent to stay is 14 percent higher.
 Culture. Companies with a purpose statement boast a stronger culture of collectiveness than those without, andthe effect is 35 percent greater in purposeful organisations, which also report 27 percent greater levels of
psychological safety. The culture is savvy but not fearful; optimistic without being naïve. Radical candor thrives,and people across the enterprise can robustly tackle pressing issues.
 Agility. Having employee and stakeholder buy‐in enables a purposeful organisation to respond more quickly andeffectively when opportunities arise or danger threatens (50 percent higher than non‐purposeful organisations).
 Resilience. Purposeful companies enjoy higher levels of trust and loyalty, making them more resilient when thegoing gets tough. They’re also better able to retain customers, employees, and shareholders during the often‐
painful transition periods that comprise the new 21st century normal.
 Vision. Serving all stakeholders and aspiring to improve society enables a broader vision—a bigger game to play—
making organisations more likely to spot unexpected opportunities and new risks.
 Learning environment. While many companies understand that having a stated purpose is important, theystruggle to weave it into day‐to‐day business. We found that purposeful organisations build leaders’ skills in
inspiring, adapting, and team leadership. They do this by focusing on experiences, coaching, and mentoring.
Leaders learn from leaders, and they coach and develop their people.
* EY Beacon Institute. (2017), How Can Purpose Reveal a Path Through Disruption?, London.

WHERE TO START

HOW TO EXCEL + DIFFERENTIATE

Articulate a clear purpose for your organisation. Focus onanswering the why questions. We all know what ourorganisations do. Purpose is about asking why we exist in
the first place, what our employees and stakeholders careabout, and what resonates with customers.
Use purpose as a lens for everything you do. Let purpose
guide the solutions you offer, how you treat yourcustomers, and how you engage your workforce.
Communicate success stories to all constituents. Stories
perpetuate purpose. Each time people repeat them,
purpose entwines more closely with day-to-day business.

© Development Dimensions International, Inc., The Conference
Board Inc., EYGM Limited, 2018. All rights reserved.

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Integrate purpose into the company’s DNA. Reinforce
purpose through the day-to-day customer and employee
experience. Treat purpose as a commitment tostakeholders and publicly update on its progress.
Focus on leaders. Help them develop their own “why.”Work with all leaders to articulate their own purpose as it
relates to the overarching purpose for the business. Then,
help them do the same for their teams and employees.
Develop key skills. Purpose-driven leaders form teams,
inspire, and motivate in a fast-changing world. Theydevelop psychological safety and agility.

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Global Leadership Forecast 2018

Digital-Era Leadership
Ready or Not, Digital Competence Is AlreadyDifferentiating Winners from Losers
The work world continues its metamorphosis as organisations increasingly leverage technology to modernise theirbusiness strategies. As the pace of change intensifies, many companies just cannot compete; 50 percent of the 2006
Fortune 500 companies no longer exist. Competition rains in from every direction. Looking ahead, technologies such as
robotics and artificial intelligence (AI) are projected to affect two billion jobs over the next decade.* These trends
represent both a threat and an opportunity. Organisations with digitally savvy leaders, the pioneers, are outperforming
those organisations with less digitally capable leaders, the laggards. As our work world becomes increasingly digital, that
performance gap will only grow.

How Digital-Ready Are Leaders?
Global Leadership Forecast 2018 shows digital‐era leaders focus their attention across five clusters made up of 16
competencies (see figure below). Averaging across all competencies, only 8 percent of leaders in Australia/NZ
considered themselves effective in all five areas.
The right column of the figure shows leaders’ ratings of their own effectiveness. They’ve reported relative strengths in
traditional leadership skills. However, the differentiators (digital capabilities and seeking out opportunities acrosscomplex ecosystems) are where leaders have gaps.
> Traditional Leadership Competencies vs. a New Set of Critical Knowledge, Skills, and Abilities© Development Dimensions International, Inc., The Conference
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Global Leadership Forecast 2018

Where Should You Focus?
Not every competency has the same impact on anorganisation’s digital performance. The middle columnof the figure at left shows the six competencies thatwere found to have the greatest impact on performance. Of
these six most critical skills, leaders are relatively strong in
two areas, weaker in four.
 Lead with digitisation. Organisations need leaders
who understand the impact digital tech can have on
their businesses. They sense what is and isn’t possible
and, more important, sense what will be possible. Theylook to standardise and automate processes to generate
new insights they can leverage for differentiatedcapabilities. This is a relatively weak area for leaders.
 Adaptability is a must. Digital leaders must be able toadapt to constant change or fall behind. They need to be learning every day, not getting caught up in “traditions.”
This is a relative leadership strength.
 Execution. It’s one thing to anticipate change. But it takes another set of skills altogether to turn new ideas into
reality. This also is a strength.
 Hyper‐collaboration is about working relentlessly to break down silos. It’s getting people working together tosolve customers’ and the organisation’s issues. This is a weak area for leaders in Australia/NZ.
Identify
and develop new talent. Leaders need to spot and rapidly bring on board the digitally savvy talent of
tomorrow. This is also a weak area for leaders in Australia/NZ.
 A 360 view. Leaders must be able to spot patterns and bring thinking together from multiple perspectives. This is areal weakness.

What Does This Mean for Performance and Potential?
Across the global sample, we found that the pioneers, digitally savvy leaders, are more prepared than the laggards tomeet emerging business challenges. Most notably, they’re better at anticipating and responding to the competitiveenvironment, navigating through complexity, and using data and analytics to guide their decision making.
In the figure above, we also demonstrated a significant relationship between global leaders’ digital readiness and theirorganisation’s financial performance. Looking to the near future, every organisation will need to embrace newtechnologies if they are to flourish. And, those with the most capable digital‐ready leaders will continue to stay ahead of
the curve. The ability to identify and develop new talent and proactively work across silos are areas that will restrict
digital growth. In another section titled “Accelerating the Digital Journey,” we focus on how to ramp up organisational
and leadership digital capability.
* Frey, T. (2012, February), 2 Billion Jobs to Disappear by 2030, http://www.futuristspeaker.com/business‐trends/2‐billion‐jobs‐to‐disappear‐by‐
2030/

WHERE TO START








HOW TO EXCEL + DIFFERENTIATE

Start by identifying critical leadership roles and assess
readiness of your talent to embrace and pioneer digitaltransformation.
Rethink your competency framework to include emergent
knowledge and skills to focus leader development. Manycompanies going through unprecedented change have
not reexamined their competency models.
Develop digital accelerator leadership-immersion
programs. This is an excellent approach to building bothtechnical know-how and leadership capability.
Move beyond simply “doing digital” via discrete
technology implementations to “being digital,” anembedded leadership mindset and way of working.

© Development Dimensions International, Inc., The Conference
Board Inc., EYGM Limited, 2018. All rights reserved.

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Some of your current leadership bench will be unable toacquire a new mindset. They may need to be replacedwith more digitally capable leaders.
Lead for the future of the organisation. Nurture anddevelop leaders as much as those running the legacy
business. New leaders will not only require a technicalmindset, but also the imagination and vision of how
technology can enable their organisation’s competitive
position.
Foster a digital ecosystem for leaders to thrive. This
includes new approaches to learning, rewards, use of
space, and elimination of hierarchies. Place great digitally
ready leaders in a traditional culture, and they will surely
fail.

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Global Leadership Forecast 2018

Accelerating theDigital Journey
Changing Old Leadership Mindsets
and Ways of Working
In our section, “Digital‐Era Leadership,” we put forth a new model of leadership and demonstrated that leaders who are
more digitally capable exert a positive impact on their organisation’s performance. We also showed that this new‐era
digital leadership requires a full and complex range of skills, including interpersonal, analytic, and technical. To thrive inthis new era, most organisations will need to build new skills and capabilities; they’ll also need to overcome old mindsets
and ways of working. This won’t be achieved by the delivery of formal training and learning alone. The workplace must
become the learning environment. To assure this transition, everyone in the organisation will need to be learning everyday.
> Meeting New Workplace Challenges© Development Dimensions International, Inc., The Conference
Board Inc., EYGM Limited, 2018. All rights reserved.

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Global Leadership Forecast 2018

How Do Organisations Accelerate Their Digital
Journey?
We explored dozens of organisational operating environmentsthat elevate the bar from simply “doing digital” to truly “being
digital.” Three emerge as critical:
 New learning cultures. Building digital‐era leadershipcapability requires a workplace where everyone learns
every day. There’s a heavy emphasis on experiential
development. Highly capable digital‐ready leaders, thepioneers, actively manage their own growth anddevelopment. Compared to their peers who aren’t asskilled, digitally‐ready leaders in Australia/NZ are more
likely (86 versus 75 percent) to take on stretch
assignments to build new skills. They’re also more likely toprovide input to grow the business (57 versus 51 percent)and seek it from others to grow themselves (91 versus 78
percent).
Getting the culture right delivers more able, confident
leaders. The figure at left shows the differences in leaders’confidence to face these challenges. Pioneers (digitally adept leaders) are significantly more confident than thedigital laggards in handling every challenge. They are 7.5 times more confident operating in a digital environment,
and 8.8 times more likely to anticipate and react to change.
 New working environment. Today’s high‐performing operating environments are purpose‐driven and team‐
based, with shallower hierarchies. They enable workforce mobility and deliver a consumer‐grade technology
experience to internal workers, aligning modern performance and rewards practices to the right behaviours.
 Developing the right environment drives engagement, productivity, and learning. Digital‐ready leaders inAustralia/NZ are more likely to respond that they are “definitely engaged” at work (68 versus 61 percent). They’realso more likely to see their organisation as embracing or even rewarding failure in pursuit of innovation (24 versus
15 percent). Additionally, 80 percent of digital‐ready leaders feel a strong sense of accountability for effectively
leading their people, compared to 73 percent for leaders who are not ready.
 New role of HR. Building digital organisations requires a reset of talent and leadership infrastructures. The HR
function must transform to become nimbler, data‐driven, tech‐savvy, and tied to the evolving business needs.
 Yet, HR is one of the least effective functions. In Australia/NZ, only 6 percent of HR professionals report being very
prepared to operate in a digital environment. This is quite ironic: How can digitally‐challenged HR leaders take thepoint on modernising the way talent will need to be developed, engaged, and deployed in the future?
Analysis of the global data reveals a considerable payoff for accelerated digital transformation. The figure above
examines five elements essential to operating in a highly digital workplace. Digitally mature organisations (those farther
along in their digital transformation) have stronger overall cultures than their less‐mature counterparts—by a factor of
10.5. As we mentioned above, they’re more likely to encourage and reward experimentation and far more focused on
future possibilities, not past constraints. And, they’re nearly seven times more likely to lead with agility. Finally, data‐
driven decisions are used more heavily.
WHERE TO START

HOW TO EXCEL + DIFFERENTIATE

Examine every aspect of your talent management system.
Make sure it’s building capable, future-ready digitalleaders.
Ensure that you’re reinforcing a culture where people
continuously grow and learn. The workplace, not theclassroom, has become the primary learning environment.
Invest resources to build HR leaders’ skills in using digitaltechnologies and predictive analytics. As they become
more adept, they’ll embrace the new way of working.

© Development Dimensions International, Inc., The Conference
Board Inc., EYGM Limited, 2018. All rights reserved.

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Measure and work on your organisation’s learning culture.
Take an integrated approach to building a future
workplace. Use rewards, workforce mobility, technology
experiences and leverage physical space and structure todrive collaboration and innovation.
Stop talking and start transforming. You need to standshoulder-to-shoulder, starting with HR as custodians of yourorganisation’s assets.

www.ddiworld.com/glf2018

Global Leadership Forecast 2018

Leading with Data-Driven
Decisions
The Culture and Skills Driving
Higher Returns on Data
Nearly seven years after the first “Big Data” articles appeared in major business publications, many organisations
struggle to counter Big Data’s substantial costs with newly unlocked value. A 2017 study* found that fewer than half ofsenior Fortune 1000 decision makers see measurable returns from Big Data. In Global Leadership Forecast 2018, acrossthe global sample of data, companies whose leaders are well prepared to use data to guide decisions are 8.7 times more
likely to have closely integrated talent and business strategies, 7.4 times more likely to have a strong bench of future
leaders, and 2.1 times more likely to have grown aggressively over the past three years, compared to organisations whose
leaders are ill‐prepared for a data‐rich business context. But these are the outcomes, not the drivers. What is theleadership context—the culture and skills—that makes these returns not only possible, but probable?

> The Cultural Factors that Make Data-Savvy Organisations Unique© Development Dimensions International, Inc., The Conference
Board Inc., EYGM Limited, 2018. All rights reserved.

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Global Leadership Forecast 2018

Traits of a Data-Driven Enterprise
We identified the five cultural factors (shown in the graphic at left)
in which data‐savvy organisations most exceed organisations whereleaders struggle with data:
1. Strength of company culture. Data‐savvy companies build
the shared mental models vital for cultural strength byactively measuring and reacting to customer and employee
viewpoints.
2. Experimentation mindset. Data provides the confidence tolaunch and gauge the success of experiments and to
objectively learn from failures.
3. Digital technology influence. Technology is a prime sourcefor new volumes and varieties of data; digital advancement
parallels being data‐savvy.
4. Focus on future vision. Data informs trajectories and trends
via prescriptive and predictive analytics.
5. Organisational agility. Agile organisations are fueled by
rapid data acquisition and action.
Yet, the need to be data‐driven isn’t limited to a particular style of leadership: whether EQ or IQ is more important,whether leaders have an execution or an engagement focus, or whether leaders derive power from personal versus
position‐based influence.

The Skills of Data-Savvy Leaders
In addition to rating their preparedness to use data in making decisions, leaders also rated their confidence in
16 skills. The figure above orders skills based on their link with data‐savvy (a longer bar equals a stronger link). The
statistics presented to the left of each skill represent the percentage of leaders who rated themselves effective inAustralia/NZ.
Not surprisingly, leading with digitisation (using technology to manage the workforce) heads the list. Also, in the top fiveare leading virtual teams and digital literacy (personal technology expertise). To underscore the fact that being data‐savvy
isn’t only about being digital, two management skills also made the top five: driving execution and integration(combining information from multiple sources). This confirmation of the importance of managerial capabilities parallels
2017 research from MIT Sloan**.
Notably, the bottom‐three skills—empathy, connectivity, and collaboration—aren’t recognised enough for the role they
can play in using data not just adeptly, but fairly and in partnership with others. A tighter connection of interpersonal
skills to data‐driven decisions may be a path for organisations to improve their low success rates extracting value frombig data.
* Bean, R. (2017), How Companies Say They’re Using Big Data, Harvard Business Review.
** Bughin, J., & Hazan, E. (2017), Five management strategies for getting the most from AI, MIT Sloan Management Review.

WHERE TO START

HOW TO EXCEL + DIFFERENTIATE

Use data to create a common culture. Strong culturesaren’t formed by accident; they’re fostered carefully andmonitored by aggressively using data to understand how
employees and customers view the company and thenreacting accordingly.
Build digital skills. Digital acumen at both a personal level(understanding new technologies oneself) and aleadership level (using technologies to lead others in
different, more-effective ways) is key for successful datadriven decisions.
But don’t neglect the execution element. Leaders who
excel at using data effectively also integrate it frommultiple sources and know how to convert the data’s
strategic insights into operational plans.

© Development Dimensions International, Inc., The Conference
Board Inc., EYGM Limited, 2018. All rights reserved.

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Don’t overlook empathy, connectivity, and collaboration.
Few leaders see the connection between interpersonal
skills and ability to use data effectively for businessdecisions. This is a prime opportunity to strengthenawareness of these links and to factor in the human
implications of data.
Implement Agile project management techniques. Agile
methodologies provide the cadence, mindset, andopportunity to flow high volumes, varieties, and velocities
of data into actionable use.
Prepare for AI. Efficient and ethical artificial intelligence
applications, already in the strategic plans for manyorganisations, will require a critical mass of leaders whoseskills span digital, management, and interpersonaldomains.

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Global Leadership Forecast 2018

Why Technology
Leaders Are Failing
The High Cost of Low-Chance Development
Technology companies are known for being leading‐edge and driving innovative ways to meet customer demands. Thisventure can overtake—and overshadow—their focus on growing internal customers. As a result, technology
organisations face unique leadership challenges, including lower engagement and retention, fueled by an acceleratingcompetition for talent. Among the more than 2,400 organisations participating in Global Leadership Forecast 2018, techcompanies across the globe reported the lowest success rates for their leaders (61 percent). This means that about two of
every five technology leadership assignments are considered failures, a rate that is 20 percent higher than that of otherindustries. What’s causing such a high failure rate? According to global data gathered from 1,086 technology leaders and107 HR professionals, tech companies are falling behind in four key development practices that not only drive higher
success rates, but also affect other leader outcomes, including higher engagement and retention.

> How Technology Industry Leadership Is Falling Behind Other Industries© Development Dimensions International, Inc., The Conference
Board Inc., EYGM Limited, 2018. All rights reserved.

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Global Leadership Forecast 2018

Four Practices that Leave Technology Behind
1. Unclear Career Management
Globally, only 64 percent of leaders in technology said they understand their career path within their organisation—14
percent fewer than those in other industries. This is a critical area for improvement, given that establishing clear career
paths not only boosts leaders’ success rates, but also consistently drives their engagement and retention. In technology
organisations the potential upside is great, as tech leaders show 17 percent lower engagement and are twice as likely toturn over as leaders in other industries.

2. No Plan for Development
In addition to lacking a clear career path, only one‐third of tech leaders surveyed worldwide have an up‐to‐datedevelopment plan—32 percent fewer than other industries. Having a current plan in place guides leaders to track andmeasure their development progress. It also makes them accountable for their own development. Without this guidance
and accountability, development is left to chance.

3. Development Is Too DIY
In tech organisations, leadership development is more DIY and out of alignment with what leaders want in otherindustries. The three types of learning sought most by technology leaders around the world—external coaching (74percent), formal development (60 percent), and short‐term developmental assignments (50 percent)—are provided least
often by their companies in comparison to those in other industries. Instead, tech companies reported a higher relianceon internal coaching and self‐study, which only 34 percent of leaders said they wanted.

4. Development Is Out of Discussion
Worldwide, 32 percent more tech leaders reported that they never meet with their manager to have performance
discussions. For those who did meet, the discussions focused more on current performance than development. In fact,tech leaders spent the least time talking about personal development in their performance discussions overall—on
average, 23 percent less than leaders in other industries.
According to technology HR professionals, they also are more likely to have eliminated performance ratings. Nearly
twice as many technology companies than other industries (31 versus 17 percent) reported that they’ve stopped using
performance management ratings. This might be leading them to abandon valuable development discussions altogether,to the detriment of overall quality. Tech leaders rated their performance management programs significantly lower thanother industries, with only 27 percent of leaders identifying their performance management program as high quality.
That figure contrasts to 36 percent of leaders in other industries across the globe.

Lower Investment, Higher Risk
In addition to lagging in these four practices, technology organisations are investing far less time and money onleadership development. On average, tech companies worldwide spend 15 percent less on first‐level leadershipdevelopment than organisations in other industries. Spending is more equal for senior‐level and high‐potential
leadership development, though it still runs 6 percent behind other industries. Even more critical than the gap in dollars
spent is the shortage of hours invested in developing leaders. On average, technology leaders spend only 25 hours instructured development each year, 10 percent less than leaders in other industries.
WHERE TO START

HOW TO EXCEL + DIFFERENTIATE

Step up your focus on development. Communicate more
frequently about it and seek feedback on your efforts.
Once leaders start thinking and talking about it, thefrequency of development discussions will increase.
Diagnose individual and group development needs.
Assess leaders to identify their development needs, thencentre plans on improving in those areas. Leverage
aggregate data to determine the greatest group gapsthat can inform future leader selection and promotion.
Redefine the business of development plans. Given thatdevelopment targets are business goals, hold leaders
accountable for meeting them. Require leaders tocomplete and act on their development.

© Development Dimensions International, Inc., The Conference
Board Inc., EYGM Limited, 2018. All rights reserved.

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Invest in more blended learning. Establish an online librarythat supports what leaders are learning via more
traditional, structured coaching and development
initiatives. Providing a mix of methods enables a broader
basis of development. Leverage, but don’t limit leaders to,
on-demand external learning content.
Drive retention with clearer paths to advancement. Ensurethat leaders have a clear understanding of how they’ll
grow to increase their development focus and retention.
Leaders who aren’t sure about their advancement pathwill be more likely to seek career growth elsewhere.

www.ddiworld.com/glf2018

Global Leadership Forecast 2018

Rethinking Leadership
Potential
Why Broader Is Better
Identifying and preparing future leaders is a quintessential “top of the house” issue. Our research drew on responses
from nearly 1,000 senior‐level leaders across the globe to identify the issues demanding their greatest attention for the
coming year. Their top two concerns are deeply integrated with proactive talent strategy and high‐potential
management: developing “Next Gen” leaders and failure to attract/retain top talent. To provide context, senior leaderschose these issues more than twice as often as slowing economic growth in emerging markets, labor relations, and global
recession. This intense focus also cascades into cost and time investments: On average, companies worldwide spend
about AUD $5,100 and 39 hours per high‐potential leader, per year for development activities. For organisations with1,000 high‐potential leaders, this translates to an annual investment of more than $5 million and 4,800 person‐days. In
Australia/NZ, companies spend an average of $5,800 and 30 hours per high‐potential leader – translating into an annual
investment of $580,000 and 375 person‐days for every 100 high‐potential leaders. Clearly, the stakes are high for a data‐
driven evaluation of high‐potential programs’ effectiveness.

> Top 10 Practices for Boosting High-Potential Leader Success Rates© Development Dimensions International, Inc., The Conference
Board Inc., EYGM Limited, 2018. All rights reserved.

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Global Leadership Forecast 2018

Mixed Results on Potential’s Progress
It’s important to start by recognising the signs of positive movement for high‐potential programs between 2014 and now: In
Australia/NZ high‐potential success rates are down from 66 to 63 percent, but high‐potential programs are more gender‐
diverse, a boost from 25 to 35 percent women. The next layer of data, however, reveals problem signs for potential efforts.
Despite 70 percent of organisations having high‐potential programs, 67 percent rated them as less than highly effective.
Outcome links are also unraveling: Globally, relationships between high‐potential programs and leadership outcomes are
19 percent weaker now than in 2014.
And perhaps most alarming, looking at the most important reason these programs exist—to address CEOs’ top concern
by building a strong pipeline of future‐ready leaders—progress is nonexistent at best and retreating at worst. Currently
only 9 percent of organisations in Australia/NZ feel they have a strong bench (almost half the 17 percent reported in2014), and now 47 percent of critical roles can be filled rapidly by internal candidates (up from 42 percent).

The Perils of a Top-Down, Top-Only View
To gauge why few organisations succeed in cultivating potential, we looked at one of the first decisions made whencreating a high‐potential program: how deeply to extend it. Nearly half of Australia/NZ organisations (47 percent) limit
their potential focus to senior‐most levels. Even more troubling, this percentage has barely changed from 2014 (41 percent)and reflects a costly misstep.
Globally, organisations that opt to extend their development of high‐potential talent below senior levels are 4.2 times
more likely to outperform those that don’t on a financial composite of revenue growth, operating margin, EBITDA, andreturn on equity.

Can Bigger Pools Drive Better Outcomes?
The conventional wisdom that high‐potential efforts need to be restricted to an exclusive few simply isn’t supported by
the research. Australia/NZ companies designate 26 percent of their leaders as high potential, little change from the 27
percent in 2014, and larger pools tend to be more effective. Yet, just stocking the pool with more leaders isn’t the key tosuccess. Use of analytics, peer and mentor‐driven coaching, long‐term developmental assignments, and personalised
learning propel organisations to outperform companies with a narrowly constrained view of potential. Larger pool sizes
alone aren’t the answer; rather, a full reshaping of a company’s orientation toward potential is required.

Best Practices Aren’t Just About the Pool
Turning to the practices themselves, the graphic at left shows the top 10 practices linked to higher success rates for highpotentials around the world. Most companies don’t use them all; in fact, just 18 percent of companies, worldwide, use all,and over a third use half or fewer. Note that not even half of the practices driving success are specific to high potentials.
Instead, they deal with core themes of development, diagnosis, and objectivity for all, representing an inclusive,
systematic view of potential.

Driving Returns on Potential Investments
As noted earlier, high‐potential programs and individuals require outsized investments. When pairing these financial
figures with an average success rate of 63 percent for high‐potential leaders in Australia/NZ, it translates to wasted
expense (for the 37 percent not successful) of about AUD $2.2 million and 1,388 person‐days. By employing provenpractices, organisations can dramatically boost return on their investment in potential.
WHERE TO START


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HOW TO EXCEL + DIFFERENTIATE

Broaden the potential pool. It’s neither sufficient nor
financially responsible to limit the high-potential view tothe organisation’s top level.
Target diversity, not just numbers. When companies
expand their view of potential, they increase gender
diversity for leaders at all levels.
Don’t invite more without building objectivity. Bigger pools
are more likely to be data-driven, boosting inclusivity
along with head counts.
Create a culture of coaching. Companies with more
successful pools use peer coaching and external mentors
heavily.
Use scalable tools for deeper diagnosis. It’s rare that thesame tools used with a senior leader-only view will beappropriate for a full-pipeline talent review; introduce newtools accordingly.

© Development Dimensions International, Inc., The Conference
Board Inc., EYGM Limited, 2018. All rights reserved.

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Hours over money. Hours spent on high-potential
development has a 68 percent stronger relationship toleadership and business outcomes than money spent,including a significant link to the financial composite that
doesn’t exist for money spent.
Prioritise immersive, personalised learning. Formal learningthat incorporates personalisation to the high-potential
learner and well-planned developmental assignments
increases success rates.
Strengthen your analytics backbone. High-potential
success rates rise with benchmarking, forecasting, results
metrics, and data visualisation in place.
Track return on the potential investment. High-impact
practices can yield high returns, but only when integrated,sustained, and monitored.

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Global Leadership Forecast 2018

Meeting the Needsof the Modern LearnerTechnology Gains Its Footing,but It’s a Slippery Slope
The scope and variety of learning methods continue a rapid advance at a pace that is only likely to accelerate as pressure
mounts to adjust and revitalise learning in academic institutions and graduates flow into the workforce. Fueled bydemand from incoming “digital natives” and funded by tuition increases, educational institutions are often at the leadingedge of learning transformation. In the workplace it’s daunting to respond to these pressures and decide among the vast
range of learning methods and approaches. HR professionals face particularly difficult choices about synchronisingcomplementary modalities, how to appropriately blend technology‐centric and high‐touch (formal training, coaching)learning, and how to apply learning back in the workplace. Although organisations want to meet the needs of all modern
learners, the choices and tradeoffs are complex and becoming even more so. In this research, we took stock of theleadership learning landscape, factoring in company usage and leader preferences to recommend an evidence‐based pathforward for learning design.
> How Much Leaders Want—and Are Getting—19 Learning Methods for Developing Australia/NZ Leaders© Development Dimensions International, Inc., The Conference
Board Inc., EYGM Limited, 2018. All rights reserved.

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Global Leadership Forecast 2018

Meeting Modern Learners’ Needs
To understand where learning needs to go, we started with the needs of learners themselves. We saw high consistency
across generations. The three features Australia/NZ learners prefer most include (in this order):1. Personalised learning experiences.
2. Coaching from external mentors.
3. Externally‐developed content.
While this is what learners want, what they actually get can be far different. In the graphic at left, we juxtaposed learner
preferences with company use for 19 learning types and methods, to yield three categories:
Leaders Want More than They’re Getting (5 types)—This category includes coaching from external mentors, long‐term developmental assignments, personalised, on‐demand, and Podcast. It spotlights leaders’ thirst for external
perspectives on their challenges—many of which aren’t unique to their own company—as well as immersive
development and personalised “anytime, anywhere” learning.
Leaders Get More than They’re Wanting (4)— Methods include formal workshops/ training courses/ seminars,
coaching from the current manager, books/articles, and internally developed learning. Surprisingly, many leaders would
prefer a bit less manager coaching, perhaps because many managers aren’t very good at it. Leaders also have reservations
about “on‐the‐job learning” morphing into “on‐your‐own” learning through books/articles. This category also reflects
the limitations of internally developed content, which might not fully capture the external business context.
About Right (10)—Coaching from peer leaders, coaching leaders receive from their employees, short‐term developmental
assignments, self‐study, microlearning, game‐based, externally developed, computer‐based, social network‐based, andmobile device‐based. These learning approaches are roughly in line for what leaders want and what their companies areoffering. This category includes two rarely used technologies: game‐ and social network‐based learning. Leaders might
not have seen these methods enough yet to gauge their value.

Technology Alone Isn’t Enough…
Despite its immense attention and expense, our data shows that technology‐driven learning isn’t having a notable
impact on leadership or business outcomes when contrasted against learning that is predominately driven by othermeans coaching, facilitated development, on‐the‐job experiences) . Nor is it surpassing high‐touch methods such asformal learning and development assignments.

…But Adds Value When It’s Need-Matched
Technology’s role becomes clearer, however, when viewed as an accelerator of learning impact. Globally, the link
between learning programs and leader quality is 46 percent stronger when technology is used heavily. It also improves
back‐to‐the‐job application, raising it from 55 percent with minimal technology use to 63 percent with extensive use.
The future of technology in learning will be driven by companies using it to address the unmet needs of the modern
learner identified in the “Leaders Want More than They’re Getting” cluster. It’s not about implementing technology for
its own sake, particularly not to enable the self‐study forms of learning that many leaders shun. When technology isdesigned and implemented to match a need, it generates value for on‐demand, personalised, and mobile learning, and toconnect leaders with external mentors. Technology works best when giving “always on” learners the tools and accessthey need to constantly seek opportunities to grow themselves and others.
WHERE TO START

HOW TO EXCEL + DIFFERENTIATE

Pursue learning personalisation. This was by far thedominant feature defining what leaders want most.
Technology’s potential here is immense to bringpersonalisation to large-scale learning. This includes newtechniques such as machine learning and natural
language processing to rapidly distill information into
personalised recommendations.
Restore the value of manager coaching. Leaders’ opinions ofmanager coaching—comparing needs with wants—aredecidedly neutral, but don’t have to be. Reinforce managers’
coaching skills to push this form of learning back to a “wantmore” state.
Understand the learning problems technology will solve.
Don’t invest further in learning technology until you’recertain you understand the problems it will solve andneeds it will meet. This is the key to stronger technology
impact and ROI.

© Development Dimensions International, Inc., The Conference
Board Inc., EYGM Limited, 2018. All rights reserved.

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Shift away from self-service. Technology driven or not, learners
want much less self-study learning. Make learner enablement
about on-demand rather than assignment and tailored to aleader’s own development plan rather than generic.
Experiment with game-based learning. Though few
companies are putting these approaches in place, they are
more sought-after by Millennial leaders than othergenerations.
Extend learning beyond the classroom. Learning reinforced
through prompts and practice—often, but not only, throughtechnology tools—better “sticks” once the leader is back on
the job.
Appoint a Learning Experience Manager. Only 37 percent ofcompanies have this role in place, but those that do are 5.5
times more likely to have highly effective leadershipdevelopment systems.

www.ddiworld.com/glf2018

Global Leadership Forecast 2018

Making the Most ofHigh-Potential Talent
Avoiding a Mismatch Between What
They Want and Get
Globally, 0rganisations spend more money developing high potentials than any other group of leaders, including thesenior team. High‐potential leaders also spend more hours per year in formal leadership training than any otherleadership group. In Australia/NZ, companies annually spend an average of AUD $5,100 and 30 hours per high‐potential
leader. Given the money and time expended, how can organisations ensure that they’re reaping benefits of cultivatingthese would‐be high performers?
Knowing what high‐potential leaders want from their development experiences can shape a company’s strategy and leadto positive outcomes. High‐potential respondents to our survey were clear: They’re looking for tailored development.
From a list of 10 development types (see figure below), four of their top five preferences are types of learning that are
tailored to their own needs. Coaching from external mentors tops the list, and short‐term and long‐term development
assignments and coaching from current managers are also in the top five. High‐potential leaders also desire formal
workshops and training courses, the type of learning that’s provided most frequently by organisations.
> Mismatch Between Leadership Development Offerings and What High-Potential Leaders Desire in Australia/NZ© Development Dimensions International, Inc., The Conference
Board Inc., EYGM Limited, 2018. All rights reserved.

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Global Leadership Forecast 2018

Identifying High Potentials
Many organisations are caught in the same dilemma: how to
identify high potentials, how to develop them as leaders,
and when to promote them. The benefits to having them are
obvious, but how can organisations maximise theircontribution and keep them engaged?
Simply identifying high potentials within the organisation iscorrelated with positive business results. Companies thatknow who their high potentials are have greater benchstrength, and leaders who have been notified of their high‐potential status are more engaged and more likely tocommit energy to growth and development opportunities.
In Australia/NZ, turnover is also lower among highpotentials (9 percent per year) than the general leadership
population (14 percent).
Many organisations are seeing this benefit. About 70
percent of Australian/NZ companies we surveyed identify
high potentials, and of those organisations, almost 47
percent inform them of their special status. While HR
professionals mostly agree that their identification methods
are unbiased (67 percent), their evaluation methods are
sound (66 percent), and that their program is targeted to specific needs of this group (78 percent), about 30 percent ofrespondents disagree with each of these statements (see figure above). Even more worrisome, a full 24 percent ofrespondents note that their organisation’s process for identifying high potentials is inconsistent. Also of concern, is thelow‐level of accountability for managers in supporting high‐potential leaders (42 percent).

Are High Potentials Getting the Learning They Want Most?
In some cases, high potentials get the desired learning, but not often enough. In Australia/NZ long‐term developmental
assignments rank as the number 4 most‐desired learning method, and 54 percent of them have completed at least one
international assignment. About half (54 percent) have had a formal mentor. That said, 46 percent of leaders not
identified as high potential also have had a formal mentor, and 46 percent of those individuals have completed aninternational assignment.
Considering this small difference, not much more is being done for high potentials, who strongly desire such
experiences. Additionally, though coaching from external mentors ranks number 1 on list of desired developmental
experiences for high potentials, it ranks number 8 in terms of what companies actually provide. Using books and articles
is a commonly provided developmental activity, but it ranks low on the list of the types of learning high potentials wantat number 8. Organisations can provide more targeted learning opportunities for high potentials by increasing coachingand developmental assignments for them.
Among several key activities to identify and manage high potential, most HR professionals agree that their organisation
evaluates high‐potential performance but measuring effectiveness of programming is a weakness (see figure above).
WHERE TO START








HOW TO EXCEL + DIFFERENTIATE

Consistently identify high potentials. You can do this via
clear evaluation criteria around competencies andexpectations.
Evaluate high potentials’ success. Measure the success ofhigh-potential development programs to ensure thatofferings satisfy these leaders’ learning needs andpreferences.
Evaluate selection and promotion processes for bias andconsistency. This was an area of perceived weakness by
HR leaders in our study. If it’s a concern in yourorganisation, work with leaders to ensure that consistent,
quantitative measures of leader success are applied
across the organisation.
Leaders have a significant impact on the ROI of highpotential programs. Clarify their role in supporting highpotentials.

© Development Dimensions International, Inc., The Conference
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Give high potentials the tailored learning experiences
they crave. This means external coaching, short-term andspecial projects, or rotational-placement programs. Someexperiences can be provided at low cost.
Provide simulations of major events or decisions. Theseexperiences allow leaders to practice reacting to realistic
scenarios. Networking events to expose high potentials tosenior leaders and mentoring programs can have significant
impact as well. Designing these experiences may require
greater creativity and thoughtfulness than typicaldevelopment programs, but they can lead to greater returns.

www.ddiworld.com/glf2018

Global Leadership Forecast 2018

Performance Management
Are Ratings Overrated for Growing Leaders?
Several years into the “performance management revolution,”* debate continues on how best to approach the core, yet
deceptively nuanced, managerial activity of holding performance discussions with employees. Many organisations have
overhauled (in some cases, multiple times) their approaches to these conversations, oscillating across a matrix of how
often (frequency of performance management meetings and revisions) and how development‐centric (proportion of
discussion time devoted to personal development versus administrative oversight). While a trend is gradually taking
shape toward performance management that is more frequent, less formal, and centered around future growth, researchis limited about which approaches work best. Our research addresses these topics with a global sample pairingorganisational practices with leaders who are both engaging and participating in (with their own managers)
performance management discussions.

> Advantages of Development-Focused Performance Management© Development Dimensions International, Inc., The Conference
Board Inc., EYGM Limited, 2018. All rights reserved.

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Global Leadership Forecast 2018

Top Three Performance Management Practices
We started with a foundational question: What practices produce better performance management? Globally, we foundin those that tend to drive effectiveness:
1. Performance management is fair and transparent at all levels (31 percent increase in effectiveness).
2. Performance management discussions focus heavily on development planning (25 percent increase).
3. Performance management discussions occur continually, rather than yearly (24 percent increase).
The global data shows that performance management works best when fair, focused on development, and frequent.
While these findings might not be surprising, it’s notable that only 29 percent of Australia/NZ companies consistently
have all three practices in place with their leaders. That is, just because it’s logical doesn’t mean it’s being done.
Stepping outside the core performance management program, we looked at how this system relates to the broader
context of aligning and reinforcing leader performance. Worldwide, high‐caliber performance management occurs
simultaneously with several other practices: leaders exhibit and receive feedback on key skills, leaders regularly review
development plans, and the organisation has up‐to‐date knowledge of leadership talent capability (essential for analytics
and workforce planning).

What’s the Impact of Dropping Ratings?
One of the most controversial, discussed (though rarely researched), and disruptive trends in performance management
is the elimination of ratings. We found that 20 percent of companies worldwide and 26 percent of Australia/NZ
companies have done so. This shift was particularly common in rapidly changing markets: China and India, and theprofessional services and technology industries. Is this a sign of progressive action or of a retreat from solid practice?
When ratings are eliminated, the impact on performance management effectiveness is relatively slight—just a 7 percent
boost was observed across the globe. However, it was linked to a sizeable increase in leader quality and bench strength
as well as two forms of gender diversity. Companies that drop ratings have more women leaders as high potentials andat senior levels. Removing ratings appears to reduce diversity‐limiting bias.

Double-Down on Development
After finding that both development focus and discussion frequency were driving factors of performance management
effectiveness, we dug deeper to gauge which matters most. For organisations advising their leaders, what should they
recommend?
What leaders talk about matters far more than how often, shown in the graphic at left. Engagement levels for those
whose performance is being managed surge when at least 75 percent of the discussion centres on development (only 4
percent of Australia/NZ leaders get this currently). The primacy of focus over frequency is so strong that it’s better tohave a 75 percent focused‐development conversation once a year than a 25 percent development conversation weekly.
While this certainly isn’t recommended—frequency is important for many other reasons given the pace and agility ofbusiness—it shows development’s dominance.
The benefits of a development focus for performance management are no less powerful for leaders and organisations.
For leaders, it’s strongly linked to career path clarity, satisfaction with advancement, and strongly counteracts turnover
intentions. For organisations, it’s linked to higher leader preparation to face business challenges of customer change,
digital business, and using data to guide decisions.
* Capelli, P., & Tavis, A. (2016, October), The Performance Management Revolution, Harvard Business Review.

WHERE TO START




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HOW TO EXCEL + DIFFERENTIATE

Establish process fairness and transparency. Clearlycommunicate the factors used in ratings, updating as
needed when expectations change.
Centre the discussion agenda on development. Though
it’s rarely possible to focus solely on development, prioritise
it highest (ideally, 75+ percent) to maximise outcomes.
Target a quarterly cadence. More frequent in-depth
performance management discussions are linked tohigher engagement; however, these advantages
decrease beyond every three months.
Gauge satisfaction with career pathing andadvancement. The more often managers meet with andrevise leaders’ performance plans, the more positively
they view career progression.

© Development Dimensions International, Inc., The Conference
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Eliminate ratings only after recognising the effects andplanning to fill the information gap. Dropping ratings islinked to higher leader quality, bench strength, andgender diversity. Companies that take this step keepemphasis on talent status and often repurpose todevelopment the time once spent discussing ratings.
Match the frequency of performance discussions to thepace of business. When discussions are held more often,
companies experiment more, are more agile, and havebetter adopted digital technologies.
Coach managers to drive engagement through development
discussions. Solid (and often-reinforced) manager skills arevital to repeatedly plan and conduct personalised, growthfocused discussions.

www.ddiworld.com/glf2018

Global Leadership Forecast 2018

Want to Be a Leader?
Get an Early Start“From the experiences of the past, we learn instructive lessons for the future.” So said John Quincy Adams, the sixth U.S.
president, during his inaugural address. For the past few decades, we’ve talked about the degree to which experiences
shape leadership behaviour. In Global Leadership Forecast 2014|2015, we showed the specific types of job experiences thatshape leadership behaviour. Experiences that impact a leader’s career can occur well before a promotion to leadership or
before that person enters the workforce. This finding examines earlier life experiences, an area not previously addressedin our research.

The Earlier, the Better
The figure below shows the frequency of seven experiences and motivations from leaders. An early motivation to leadplays a significant role in a person’s decision to pursue a leadership position. Slightly more than 76 percent ofAustralia/NZ leaders surveyed had leadership ambitions early in their life or working careers. Two additional early life
experiences may especially influence the motivation to lead: Parents as working leader role models. 49 percent of leaders had parents who held leadership jobs, similar to global
findings at 44 percent.
 An elected or early volunteer leadership position. Nearly 58 percent of leaders held such a position (for example,
club president or sports team captain) long before they entered the workforce, similar to global findings at 64
percent.
> Percentage of Australia/NZ Leaders Who Had Experience and Motivation© Development Dimensions International, Inc., The Conference
Board Inc., EYGM Limited, 2018. All rights reserved.

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Global Leadership Forecast 2018

These findings are supported by a recently completed study with
The Conference Board, DDI, and RW2 Enterprises on Millennial
leaders* that involved interviewing leaders at all levels in several
Fortune 500 companies about experiences that shaped them.
One leader cited her parents’ role in providing lessons i n how
people should be treated and noted how this helped mold hercharacter. Another respondent recalled a leadership position inschool government.

> Early Experiences and Motivations with
the Greatest Impact

Parents as leaders seem to have a stronger influence on theirchildren becoming leaders than does having a formal mentor.
That said, mentorship nonetheless continues to provide
considerable value to developing leaders. The lower percentage(18 percent in Australia/NZ) of involvement in family‐run
business might well trace to lack of opportunity rather than thevalue of the experience itself.
Finally, international assignments can occur anytime during aleader’s work life. Just over 27 percent of leaders in Australia/NZ
completed at least one international assignment. This is asurprising gap given the rising number of multinationals.
Globally, there was a small gender difference for two of the earlyexperience values. Female leaders were more likely than maleleaders to have had parents in a leadership role. Males, on theother hand, had more of an opportunity to serve in a pre‐career
leadership role. Perhaps gender role modeling becomes morecritical for females in a male‐dominated leadership work
environment. And, opportunities to lead may be less available to females before they enter the workforce.

Does It Make a Difference?
The figure above shows the global links between previous experiences, motivations, and outcome variables, with a check
mark indicating a positive relationship. We looked at leadership engagement and retention, leadership self‐confidence(a leader’s perception of his or her own abilities versus those of peers), number of promotions, and designation as ahigh‐potential individual. Both leadership self‐confidence and high‐potential status have strong relationships.
We also asked all leaders if they felt prepared to deal with nine challenges associated with working in a complex working
environment. Examples of survey items included operating in a digital environment, anticipating/reacting to speed ofchange, and acting decisively without clear direction. While not universal across all items, leaders across the globe are
better prepared to perform in today’s complex work environment when they’ve had some of the pre‐career experiences.
* Ray, R.L., Sinar, E., Wellins, R., Wright, E., Popiela, A., Ye, A., & Paese, M. (2017, January), Divergent Views/Common Ground: The Leadership
Perspectives of C‐Suite Executives and Millennial Leaders, New York, The Conference Board.

WHERE TO START

HOW TO EXCEL + DIFFERENTIATE

Consider previous experiences as you make leadershipselection and placement decisions.
Motivation to lead is essential and often a reason many
new leaders are happy to return to a role as individual
contributor. Instruments and interview methods exist that
accurately assess motivation to lead.

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© Development Dimensions International, Inc., The Conference
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Seek opportunities to place employees in informal
leadership experiences before they apply for or are asked
to fill a formal leadership role.
Explore the use of biodata to get a better read on an
individual’s probability of success as a leader. Artificial
intelligence (AI) soon will play a larger role in examining
prework and work variables in predicting leadership
success.
Like marketing, IT, or any other profession, think ofleadership as a profession. Never underestimate theimpact and influence you can have on your children or
the younger generation in encouraging them to consider
leadership roles inside and outside the work place.

www.ddiworld.com/glf2018

Global Leadership Forecast 2018

The Rise of theDigital Natives
Are Millennials Ready to Lead?
Millennials are digital natives. They grew up in a digital environment and seem to embrace technology in all aspects of
their lives. Although we often take for granted that this generation will lead us in digitisation, are Millennials really up to
the challenge? Perhaps not as much as we would hope. When comparing preparedness to meet nine critical businesschallenges (such as navigating through complexity, chaos, and confusion; and acting decisively without always having
clear direction), Millennials—the generation born between 1982 and 2000—generally agree with their Baby Boomer andGeneration X counterparts about the challenges for which they feel most and least prepared, as shown in the figure below.
However, Millennials in Australia and NZ seem slightly more prepared to anticipate and react to change, compared toGeneration X and Baby Boomer colleagues, but less prepared to act decisively in ambiguous situations, perhaps due totheir experience in the workplace.
> As a Leader, How Prepared Are You to Meet the Following Business Challenges for Your Organisation?

© Development Dimensions International, Inc., The Conference
Board Inc., EYGM Limited, 2018. All rights reserved.

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Global Leadership Forecast 2018

Are Millennials Ready to Lead with
Digitisation?
Millennials feel similarly prepared to operate within ahighly digital business environment as Baby Boomers
and Gen Xers, but all generations could use moredevelopment in this area. In fact, all generations inAustralia and NZ rated it second from the bottom.
Given that Millennials grew up with technology, we
might think that these digital skills would be second
nature. However, it seems that they need additional
preparation and training to really excel at leading in thedigital space.
Conversely, Millennials in Australia and NZ rated
themselves as more effective at digital literacy thanmembers of Gen X and Baby Boomers did (see graphic
at right). Millennials are less confident in theireffectiveness at leading with digitisation but were still
more effective than their elder counterparts. However,Millennials rated themselves less effective than theother generations at leading virtual teams, perhaps
because they often lack overall experience in leading
teams. So whilst Millennials feel confident in theiroverall digital understanding, translating this into theirrole as digital leaders is where some more development
and support may be required.
Again, although Millennials rated themselves as more effective than their older counterparts at some digital skills, theseskills were rated low across all generations. Organisations will need to step up to prepare leaders to keep pace with
rapidly evolving technology advancements. They would be wise to arrange additional training or to revamp hiring andcollaboration strategies to flow digital experts into more functions.

Differences Due to Generation or Life Stage?
In 2017, The Conference Board and DDI collaborated on the research report Divergent Views/Common Ground: The
Leadership Perspectives of C‐Suite Executives and Millennial Leaders.* In that report, we found that much of thedifference we often attribute to generation is more closely related to career or life stage. Millennial preferences are notlargely different from those of previous generations at similar points in their careers.
We found this to be true in Global Leadership Forecast 2018 as well. As leaders climb the management ladder, they rate
their effectiveness at mastering leadership skills higher. Higher‐level leaders, regardless of generation, are more effectiveat connecting ideas, driving execution, and aligning toward common objectives. But there are some generational
differences as well. Millennial leaders across the globe: Rate their intellectual curiosity higher than other generations.
 Are more likely to seek feedback and input from colleagues and mentors.
 Are more likely to want “stretch” assignments.
* Ray, R.L., et al.(2017, January), Divergent Views/Common Ground: The Leadership Perspectives of C‐Suite Executives and Millennial Leaders,
New York, The Conference Board.

WHERE TO START

HOW TO EXCEL + DIFFERENTIATE

Build programs that leverage Millennial strengths.
Millennial strength in digitisation and comfort with using
data to guide business decisions can enhance digital skills
across the organisation.
Take advantage of Millennials’ digital ability. One way to
do this is through reverse mentoring programs. Millennials
can share digital literacy and social media savvy, whilemore experienced employees can share theirorganisational knowledge to ensure that it’s not lost.

© Development Dimensions International, Inc., The Conference
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Define your company’s current digital capabilities.
Consider the digital skills leaders of all generations willneed to move the organisation forward. Then, articulate
your digital strategy to the organisation so that leaders
can improve their own skills as needed.
Ensure that your leaders are equipped to lead withdigitisation. Create a task force of Millennials to involve
them as part of the strategy development. If additional
expertise is needed, evaluate options for building or
acquiring it.

www.ddiworld.com/glf2018

Global Leadership Forecast 2018

Generation X-Change
Don’t Underestimate the Powerful Influenceof Gen X Leaders
As companies grapple with how to transform and innovate better and faster, the population of leaders guiding thesedecisions is changing dramatically. Most popular discussions about the next generational shift has centered on the massof Baby Boomers retiring or the eager ascension of Millennials into leadership. Often overlooked is the next generation
to leadership, Generation X, which is leading the way in a time of great change with technology advancement, how jobs
are automated and created, and how businesses are designed and transformed. Born between 1965 and 1981 and with anaverage of 20 years’ experience in the workplace, members of “Gen X” are primed to take on nearly every importantleadership role in organisations. In Australia/NZ, they already hold 51 percent of leadership roles and will continue togrow into more senior positions. Yet, little is commonly known about what defines the Gen X leadership experience andstyle. It’s time for that to change.

> Four Key Findings on How Global Generation X Leaders Stand Out© Development Dimensions International, Inc., The Conference
Board Inc., EYGM Limited, 2018. All rights reserved.

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Global Leadership Forecast 2018

The Early Technology Adopters
Although Millennials are most recognised for having grown up with technology, Gen Xers were early technology
adopters and gamers who use social media more habitually than any other generation*. This has translated to theirleadership skill set. According to global data from 25,000 leaders, ratings from Generation X show they are just as
confident in their digital leadership capability as Millennials, with slightly more than half of Gen X and Millennial
leaders rating themselves as highly or very highly effective (54 percent and 56 percent, respectively). This Gen X digital
savvy is balanced by strength in more conventional leadership skills such as driving execution and building talent, which
are areas in which Millennials rated themselves lower than both Baby Boomer and Gen X leaders.

Slower to Ascend, But Loyal
Perhaps part of the reason that Generation X has flown under the radar in the rise to leadership is that it happened
slowly. Baby Boomers occupied higher‐level leadership roles longer in their careers and held off for later retirement.
Meanwhile, Millennials surged into the workforce eagerly, and although this younger generation has often been unfairly
labeled as impatient and promotion‐needy, perceptions have an impact.
Gen X may have become the “middle child” in career advancement, as leaders from this generation have the slowest
promotion rate (see figure at left). Compared to leaders from the other generations, Gen X leaders across the globe
received, on average, just 1.2 promotions in the last five years with their company, versus an average of 1.6 for Millennials
and 1.4 for Baby Boomers. Interestingly, even though Gen X leaders aren’t advancing as quickly as they would like,they’re less likely than Millennials to change companies or leave in the near future. Only 37 percent of Gen X leadersreported that they expect to change companies to progress their leadership careers, compared to 42 percent ofMillennials.

Driving Growth Through External Learning
Although most Gen X leaders aren’t looking outside for a new job, they are seeking more external development andcoaching than any other generation. In fact, leaders from this generational cohort are much more likely than either
Millennial or Baby Boomer leaders to prefer external coaching over internal coaching. Most notably, 67 percent of Gen X
leaders, worldwide, said they would like more external coaching, compared to only 47 percent who said they want morecoaching from their managers—a 20 percent difference.
Gen Xers across the globe also reported that they want more externally developed (57 percent) than internally developed(46 percent) material to support their leadership development, whereas about equal numbers of Millennials (54 percent
and 54 percent, respectively) and Baby Boomers (49 percent and 50 percent, respectively) reported wanting more ofboth types of material. This is a strong indication that not only do Gen Xers see new opportunity in outside learning, butalso that organisations that can successfully employ more external learning may be able to extend their capabilities into
new areas and lines of business with this next generation of leaders.
* 2016 Nielsen Social Media Report, http://www.nielsen.com/content/dam/corporate/us/en/reports‐downloads/2017‐reports/2016‐nielsen‐social‐media‐report.pdf

WHERE TO START

HOW TO EXCEL + DIFFERENTIATE

Build tech capability with the right tools. Gen X leaders
have a unique perspective on how to work with, develop,
and leverage new technologies. Provide them, and allleaders, with the tools and support needed to leveragetechnology for greater business impact.
Provide leaders with more external guidance. Encouragelooking outside the organisation for coaching anddevelopment guidance, especially as leaders face newand more complex business challenges for which they
may not have internal mentors.
Don’t promote generational stereotypes. Avoid catering
programs to any single generation or group so that you
don’t alienate others. Seek cross-generational feedback
to improve outcomes for everyone.

© Development Dimensions International, Inc., The Conference
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Encourage leaders to challenge the status quo. Gen Xers
are taking the lead at a time when change is regular anddesirable. Provide them the freedom and encouragement
to try out new approaches and challenge old ones toencourage innovation and growth.
Leverage technology to support traditional development.
The large majority of leaders, regardless of generation,
said they want more traditional learning. Technology canbe a powerful enabler of that development. Gen X andMillennial leaders will especially benefit from additional
technology-based development tools they can accessand control on their own when needed.

www.ddiworld.com/glf2018

Global Leadership Forecast 2018

Diversity Leaders
How Top Organisations Are Growing Strong
with Women in Leadership
Worldwide forecasts call for women to effect significant, increased economic and financial impact in the next decade,both as consumers and investors. Organisations have much to gain by engaging and leveraging female perspectives
within their workforces, and there’s plenty of room to grow as women still comprise a minority within leadership circles.
According to demographic data gleaned from more than 2,400 organisations around the globe, women currently inhabit
less than one‐third (29 percent) of all leadership roles, with the large majority being in first‐level management positions.
In Australia/NZ, it is slightly less of a minority, with 37 percent of leadership roles currently occupied by women. Our
global research reveals that companies that have reached an above‐average level of gender diversity overall (at least 30
percent) and at the senior‐level (more than 20 percent), outperform diversity laggards in key leadership and businessoutcomes. What can we learn from these diversity leaders, and what are they doing differently? The graphic below
depicts key practices that enable a stronger pipeline of women at each leadership level.

> Practices that Support Having a Stronger Representation of Women by Leadership Level© Development Dimensions International, Inc., The Conference
Board Inc., EYGM Limited, 2018. All rights reserved.

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Global Leadership Forecast 2018

Don’t Single Out Women, Or Anyone
Worldwide, our research shows that companies achieving astronger balance of gender diversity sustain an advantage beyond
the numbers. Their leadership strategy relies not on meeting any
single demographic target alone, but in integrating diverse
perspectives into people, product, and business decision making
companywide. Beyond succeeding with diversity‐enabling
practices identified in the graphic (global data), they stand out intwo key ways:> Impact of Greater Gender Diversity

 Inclusion is embedded within their culture. Leadersfrom more gender‐diverse companies indicated thatmaintaining multiple and diverse perspectives is critical toachieving success. They were twice as likely as their low‐
diversity counterparts to report that their leaders work
together to create new solutions and opportunities, and thatmultiple perspectives determine success. They also reported
a higher level of collaboration across organisationalboundaries. Leaders from more gender‐diverse
organisations were 1.5 times more likely to work acrossorganisational boundaries and create synergies in theirefforts.
 Their leaders operate with different mindsets, not skill
sets. On average, leaders from more diverse organisations
weren’t particularly more skilled in any single leadershiparea. Rather, they were more likely to demonstrate a strong
focus on personal development. This development mindset
is enabled by organisational practices that emphasise high‐quality development planning and more regular conversations on personal development.

Succeed with an Inclusive ApproachThis collaborative, integrated approach to growing leadership diversity translates to beneficial people and businessoutcomes (see graphic at right). Diversity‐leading organisations, worldwide, were rated by their leaders as: Having higher‐quality leadership.
 Being faster‐growing and more agile than their more homogenous counterparts.
 More likely to experiment and embrace failure in pursuit of different and innovative approaches.
Their successes also translated to an impact on the bottom line. Organisations with greater gender‐diversity
were 1.4 times more likely to have sustained, profitable growth.
WHERE TO STARTHOW TO EXCEL + DIFFERENTIATE



Seek the best recruiting sources. Continuously evaluate
the different channels leveraged for recruitment and seek
new ones. You can’t grow diversity if you’re not creating
new ways of getting new perspectives into the building.

Reframe diversity goals. Not all diversity is easy—or
possible—to measure. It’s important to consider and value
the potential impact of any different backgrounds andexperiences that leaders can bring.



Hire and promote for diversity. Leverage valid, reliabledata on employee capabilities and personalities to guidehiring and promotion decisions.



Seek out and encourage under-leveraged talent.
Encourage leaders to seek different perspectives for new
projects and reward teams that harness inclusion ofmultiple perspectives to generate new ideas andsolutions.

Encourage knowledge-sharing through mentorship.
Provide new and early leaders with mentors from outside
their own functional areas to encourage learning andexchange of diverse ideas.

Continue to grow diversity. Provide high-performing
women with stretch assignments to continue building theirskills and cross-functional knowledge.

© Development Dimensions International, Inc., The Conference
Board Inc., EYGM Limited, 2018. All rights reserved.

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Global Leadership Forecast 2018

Build a Coaching Culture
Want to Be a Better Leader?
Ask a Peer or Employee
Many organisations are fostering a coaching culture to reap benefits beyond senior‐leadership levels. They’ve expanded
their focus to developing leaders at all levels and integrating coaching behaviours and expectations into everyday
conversations and formal talent management processes. In such a culture, learning can come from a variety of sources:
peers, managers, employees, and external coaches. When everyone in the company can be a coach, everyone benefits.
Leaders often underestimate what they can learn from their peers and employees on their teams. Global Leadership
Forecast 2018 challenges notions of where learning can and should come from. For example, when organisations use peer
and employee coaching, leaders are more likely to feel strongly engaged and accountable to the company and their teamthan when there is no coaching.
> When Everyone in the Company Can Be a Coach, Everyone Benefits© Development Dimensions International, Inc., The Conference
Board Inc., EYGM Limited, 2018. All rights reserved.

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Global Leadership Forecast 2018

Promoting Shared Leadership
Coaching by managers, employees, peers, or external mentors promotes in leaders a stronger sense of shared leadership.
This includes working with others across silos, collaborating to enhance organisational effectiveness, acting as
custodians of company purpose, and supporting critical activities that align with that purpose.
A coaching culture emphasises the skills of seeking and listening versus telling someone what to do. When asked fortheir input, peers and employees feel free to challenge and provoke thinking or offer solutions that might not have been
considered. Given the chaotic and fast‐changing business environment, having leaders at all levels of the organisation(not just those at the very top) coaching each other can provide greater agility to solve problems across the enterprise. A
coaching culture creates space for these conversations and daily coaching moments between leaders and teams, as well
as between colleagues and peers.
A point of disconnect found in the study highlights that while Australia/NZ leaders—including high potentials—want
more coaching from external mentors (ranked number 1 on a list of 10 learning types), organisations aren’t providing thismethod of learning (ranked at number 8 of 10). This is an area of opportunity that companies can leverage to support
engagement and retention.

What Is the Value of Coaching to Organisations?
Measuring and proving the benefit of coaching are not simple tasks, as it can be difficult to isolate its effects from otheractivities. The Conference Board’s recent study, Global Executive Coaching Survey 2016*, finds that organisations tend toevaluate coaching efforts with different approaches. Some of these include formal and informal conversations with key
stakeholders, monitoring coaching deliverables, assessment of satisfaction by those who were coached, and assessmentof behavioural change by managers.
While demonstrating the impact of coaching on business performance remains a challenge, Global Leadership Forecast
2018 finds specific areas of leadership impact that organisations will find valuable. Global data reveals organisations thatuse coaching: By direct managers and external mentors show greater leadership bench strength, promote more leaders fromwithin, and are more likely to have a pipeline of talent to fill roles immediately.
 In any form (from external coaches, managers, peers, or employees) cultivate leaders who have a greater
understanding of their future leadership career paths and greater satisfaction with their advancement.
 With an external mentor experience lower leader turnover (more so than with coaching from managers).
* Lui Abel, A., Ray, R.L., & Nair, S. (September 2016), Global Executive Coaching Survey 2016, New York, The Conference Board,
https://www.conference‐board.org

WHERE TO START

Initiate and build a coaching culture by embedding
coaching elements into talent management processes(training programs, performance management processes,
development plans).



Develop leaders at all levels to be coaches. Enhancesenior leader communication around the value ofcoaching and create incentives and rewards to reinforcecoaching behaviours.



Coaching often can be included in leadership cohort
programs as a strong complement to other learning
activities.



By including (and rewarding) coaching behaviours in
performance expectations, every leader at any level candemonstrate the skills with peers, managers, and teams.

© Development Dimensions International, Inc., The Conference
Board Inc., EYGM Limited, 2018. All rights reserved.

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

Enhance your coaching culture by designing personaland customised coaching solutions. These can betargeted types of coaching (development-focused,transition, career, on-boarding, team or group, andinclusion coaching).



Use analytics to measure and communicate the impact ofcoaching. This can be a game-changer.



Many organisations use internal coaches (formal
executive coaches who are also employees) whose
understanding of corporate dynamics and cultural norms
allows them to guide leaders in navigating change andintegrate teams to boost performance. Internal coaching
can scale efforts in building a coaching culture andsupporting a larger pool of leaders lower in the hierarchy.

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Global Leadership Forecast 2018

Mentoring for Impact
How to Maximise a Critical Leadership Experience
For many reasons, mentoring is one of new leaders’ most sought‐after development experiences. Not only does it enable
them to gain broader, deeper perspective and knowledge of their business, but it also allows leaders to network andconnect with people outside their immediate functional groups. And its benefits extend beyond the individual being
mentored. Organisations that operationalise mentoring gain connections between new leaders and mentors, keep
practical experience and wisdom in house, and break down silos between functional groups. Yet, despite the potential
impact, just over one‐third of organisations in Australia/NZ (39 percent) have a formal mentoring program for theirleaders. What distinguishes the successful organisations, and what is the impact of engaging more leaders in formal
mentoring relationships? The graphic below depicts some of the benefits and sheds light on why more organisations andleaders should engage in mentoring.

> Organisational Benefits of Having a Formal Mentoring Culture© Development Dimensions International, Inc., The Conference
Board Inc., EYGM Limited, 2018. All rights reserved.

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Global Leadership Forecast 2018

Seven Findings on the State of Mentoring
We explored the state of mentoring across the full set of 2,488 organisations that participated in Global Leadership
Forecast 2018. We found that few factors differentiate the organisations that offer formal mentoring beyond the benefits
they and their leaders are receiving (see graphic at left). Here are the top seven findings about mentoring from leadersand organisations in Australia and NZ:
1. Most leaders have had no mentor. Only 43 percent of the leaders in Australia/NZ have had a formal mentor.
2. Fewer early leaders have access to mentors. The majority (65 percent) of first‐level leaders in Australia/NZ have
not had a formal mentor. This represents a wasted opportunity, given the proven payoff.
3. More Gen Xers in Australia and NZ have had mentors. Whilst globally, Millennials have enjoyed the mostmentoring opportunities, locally, about half (47 percent) of Gen X have had a formal mentor, as compared to only
39 percent of Millennials and 35 percent of Baby Boomer leaders.
4. Mentoring is gender neutral to a point. Just as many men and women have had mentors (41 percent and 47
percent, respectively) and have mentored others (50 percent and 47 percent, respectively). Among leaders inhigher‐level and senior‐executive roles across the globe, more women have had mentors than men, indicating that
this is a critical experience for women to advance their careers.
5. Not all senior leaders are mentoring. Although over half (59 percent) of senior leaders have had mentors, a large
portion are not passing on their experience or knowledge to junior members in their organisations. Approximately
one‐third (32 percent) of senior leaders reported they have not formally mentored anyone.
6. Few organisations offer formal mentoring for their leaders. Only about one in three organisations (39percent) provide formal mentoring.
7. More financially successful organisations offer mentoring. Globally, 54 percent of organisations in the top
third for financial performance have formalised mentoring programs, compared to only 33 percent of organisationsin the bottom third.

Broader Knowledge Networks
When designed to cross organisational boundaries, mentoring programs can facilitate an exchange of knowledge andexperience that informs younger employees. These programs also put mentors in touch with other parts of theorganisation, elevating knowledge transfer between disparate sections. In fact, organisations that encourage mentoring
are already benefitting more widely from these guided interactions. Across the more than 25,000 leaders in our global
study, those from organisations with formal mentoring programs were 1.7 times more likely to feel well prepared for
capturing organisational knowledge before it’s lost than were leaders from organisations without formal mentoring.
WHERE TO START

Encourage formal and informal mentoring. Althoughformal mentoring programs should establish and foster
guided connections and interactions between junior andsenior leaders, it’s also valuable to encourage leaders andnon-leaders to seek informal mentorships, especially in thereverse with senior leaders seeking out their juniorcolleagues to gain new perspectives.



Develop mentoring contracts. Mentoring is a valuable
investment of a leader’s time to share knowledge andexperience. Provide mentors and their charges with
examples of how to clearly communicate expectations
for the mentoring relationship, and also set guidelines inadvance for the mentorship.

© Development Dimensions International, Inc., The Conference
Board Inc., EYGM Limited, 2018. All rights reserved.

HOW TO EXCEL + DIFFERENTIATE

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

Build mentoring networks. Organisations can go only so far
in connecting and establishing mentorships. Foster peer
learning by establishing mentoring networks, so that when
there isn’t formal guidance on a specific question orneed, leaders can seek the help and support of others
throughout the organisation.



Make mentoring a retention strategy. Leverage mentoring
connections to foster retention. Be purposeful about
matching mentors to junior leaders who are at greater riskof turnover.

www.ddiworld.com/glf2018

Global Leadership Forecast 2018

Collective Leadership
Leading for Value Across Organisational Boundaries
In the 21st century, operating environments and models will become increasingly complex across new geographies andproduct/service lines with shorter half‐lives than in the past. Navigating this complexity will require leaders to work
together more seamlessly across boundaries within and—with greater frequency these days—outside (for example withpartners and alliances) the organisation. Collaboration is fast becoming a premium capability. In Global Leadership
Forecast 2018 we’ve identified what organisations with strong collective leadership have in common. Their leaders work
together effectively, create value horizontally, form multidisciplinary teams, and constantly bring diverse perspectives
together to work on their toughest issues. These organisations display strong—even turbocharged—confidence in theirability to conquer many of the challenges facing the business world today. Of course, collective leadership is not always
appropriate; there are times when more directive leadership is required.
> Leader Capability to Meet Business Challenges in High Versus Low Collective Leadership Organisations© Development Dimensions International, Inc., The Conference
Board Inc., EYGM Limited, 2018. All rights reserved.

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Global Leadership Forecast 2018

What Is the Impact of Collective Leadership?
Organisations with strong collective leadership (see figure at left) make better‐informed decisions. They use data to
guide their decision making, and they excel at bringing in multiple perspectives from across the organisation.
Particularly in Australia and NZ, collective leadership organisations are also more confident in capturing the knowledge
an organisation holds, needed in times of turnover or change. They also respond to the competitive environment and act
on customer needs.

Is Collective Leadership Always the Answer?
In Australia and NZ, collective leadership organisations are found to have less of an advantage in terms of anticipating
and reacting to change, acting decisively, maintaining effectiveness despite constant surprises and effectively navigatingcomplexity, chaos, or ambiguity.
When the environment demands decisive action, companies may need to shift from collective to directive leadership.
This requires adaptive leaders who can read the situation and use authority when required.

Collective Leadership Organisations Develop Stronger, More Engaged LeadersFinding the right leaders and building bench strength poses an increasingly daunting challenge in today’s businessworld. Asked what keeps them awake at night, CEOs frequently tell us: “Do I have the leaders I need to deliver our
strategy?”
In Australia/NZ, collective leadership is equated with:
 More than four times higher likelihood of a strong leader bench (17 percent versus 4 percent).
 Essentially eliminating the rate of leaders at high risk of leaving (0 percent versus 28 percent).
 A superior the rate of “definitely engaged” leaders (90 percent versus 62 percent).
The global data shows that constant learning is in the DNA of collective leadership organisations. Leaders give more
feedback to each other, as well as seek it more often. There’s a culture of learning that cuts across boundaries as leaders
work together toward a common cause: to develop each other as they go.
This translates to engagement and commitment. Leaders bring more energy and find a greater sense of purpose in theirroles (twice the levels of other organisations). They’re part of a wider team, which raises their engagement and reduces
their desire to leave by 10 percent versus organisations that don’t have collective leadership.

So, What Underpins Collective Leadership?
Collective leadership cultures are safe. Across the globe, people in collective leadership cultures feel safer to bring up
tough issues—by more than twice the levels within the other organisations. Psychological safety is a main feature ofpeople’s ability to work collectively and collaboratively. People are unafraid to admit a mistake, ask a question, or offer a
new idea, confident that they won’t be embarrassed or punished.
Development becomes a team sport. Leaders in collective leadership organisations face challenging conversations
and get more opportunities to provide feedback to senior leaders. They are more likely to prioritise creating chances fordevelopment and advancement for all.
Experiential practices support collective leadership. Our global data reveals organisations that score high incollective leadership use experiential learning to develop leaders. They’re three times more likely to adopt
coaching/mentoring for their leaders and five times more likely to use stretch assignments to build critical skills and to
reinforce the culture.
WHERE TO STARTHOW TO EXCEL + DIFFERENTIATECreate leadership teams that cut across boundaries andbecome models of collective leadership. Give them real
challenges to get the experience of working collectively.



Map out the leadership capabilities required to manage
the complexity that can undermine the benefits fromcollaborative leadership/culture.



Build skills that enable leaders to work collectively. Workon game-changers like hyper-collaboration, inspiringothers, and leading in a virtual world.



Build teaming capability at scale. Support the effective
design and development of teams across theorganisation.



Make your leaders aware of what it takes to establish asafe environment. Do they welcome divergent views? Do
they understand that getting it wrong is an opportunity tolearn?



Deepen empathy for the enterprise. Can all of yourleaders “stand in the shoes” of their peers? Do they
understand the importance of making decisions that go
beyond the interest of their function?



Accelerate team performance by helping members
understand styles, leveraging differences to theiradvantage.



Give leaders skin in the collective game. Reinforce,recognise, and reward collective leadership behaviours
through formal and informal incentives.



Create a purpose-driven organis ation where all leaders
and their teams drive towards common goals.

© Development Dimensions International, Inc., The Conference
Board Inc., EYGM Limited, 2018. All rights reserved.

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Global Leadership Forecast 2018

It’s Time for Teamsin Leadership
The Power of a Shared Leader Perspective
Mounting pressures—complexity of work such that no one person has all the knowledge needed to solve problems,trends toward multidisciplinary work groups, and the rise of agile project management approaches—are renewing
attention on the unique and critical value of team‐based work. Our research shows that these expectations aren’t limited
to individual contributors but are also shaping the future of leadership. Based on global data from more than 2,500 HR
professionals, three of the top six skills viewed as most critical within three years are closely associated with teameffectiveness:
 “360‐degree thinking” to act on input coming from multiple sources and perspectives.
 “Hyper‐collaboration” requiring leaders to work cooperatively with others.
 “Leading virtual and remote teams.”
Collectively, these forces raise the stakes for leaders’ willingness to work as a team, and for companies to respond in kindby enabling a culture of shared leadership.

> How Senior Leadership Teams Are Stronger with a Shared Perspective© Development Dimensions International, Inc., The Conference
Board Inc., EYGM Limited, 2018. All rights reserved.

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Global Leadership Forecast 2018

True Leadership Teams: Still a Rarity
For many organisations, shared leadership is an aspiration, not yet a reality. In Australia/NZ only about a third (36percent) of leaders feel either that they and their peers are engaged in mutual influence and shared sense‐making, and44 percent of leaders truly collaborate to enhance the company’s effectiveness.
Other signs of cooperative leadership are much weaker. For example, only 4 percent of Australia/NZ companies
extensively employ coaching from peer leaders as a learning method. Overall, many companies show questionablereadiness to adopt and take advantage of a team concept for their leaders.

The Risks of Top-Level Misalignment
It’s important to understand the consequences of a talent approach that doesn’t build commonality across leadershipteams and that fails to see leaders as a group needing to be unified by common mindsets and mental models guiding
their decisions. At the senior‐most company ranks, these risks are particularly severe: They can lead to entire business
units drifting away from a core strategy and senior leaders who cascade a discrepant set of operating and leadershipprinciples through their entire reporting structure.
In this research, we looked across data from multiple members of more than 60 senior leadership teams across the globe(C‐Suite and executive VP‐level leaders within the same company) to gauge the impact on leadership and businessoutcomes of leaders with widely varying responses. We found three areas where a lack of senior team calibration—as
shown by more variation across leader responses—was most damaging: Energy and development passion: Vigor and energy on the job; looking for opportunities every day to develop
employees. Organisations suffer when senior leaders differ in their willingness to continually push themselves andothers to grow.
 Future‐focused leader skills: Identifying and developing future talent, leading through digitisation (that is,leveraging technology to manage the workforce more effectively). Companies where senior leaders are inconsistentin such skills see worse talent and business outcomes.
 Views on company culture: Degree to which the organisation is sluggish or agile, whether the company focuses
more on current challenges or future vision. When senior leaders aren’t well‐grounded on where the company stands
now (or where it needs to head) on these key cultural factors, positive outcomes are much rarer.
Globally, organisations with well‐calibrated senior leadership teams have higher bench strength (ability to immediately
and confidently fill critical leadership roles). They have leaders who react more decisively to change and are better able
to act on shifting customer needs and perspectives. These effects of a shared leadership mindset are shown in thegraphic at left.

Alignment Isn’t Constant Agreement
This research isn’t about seeking full agreement and a lack of healthy debate among leadership teams. Some forms oftension certainly can be functional*. However, a lack of seni0r leader alignment on key cornerstones of passion, talent
growth, and cultural readiness for the future notably weakens a company’s ability to build a robust leadership pipeline
and to respond adeptly and with agility to market and customer challenges.
* Leonard, O., Wiita, N., & Milane, C. (2017, September 18), The Best Senior Teams Thrive on Disagreement, Harvard Business Review.

WHERE TO START

Build shared mental models about leadership. Create andsocialise shared frameworks for roles and expectations.



HOW TO EXCEL + DIFFERENTIATEHire and promote for team profiles. Seek valid, reliabledata about leader personalities and skills to guidedecisions about team composition.

Don’t confuse alignment with agreement. Differences inperspective are valuable; differences in fundamental
views of oneself or key business challenges are much
more destructive for talent and agility outcomes.



Experiment with agile methodologies. Agile project
management, once solely used for technology
organisations, deeply incorporates and can build
momentum for team-based approaches.

Use objective diagnostics to discern and act on teamlevel patterns and dynamics. Go beyond standard org
chart or “heat map” views for dynamic, interactive viewsof how leaders will work together as a team.

Address misalignment in critical facets early. Don’t let
misalignment in passion, skills, and culture fester until they
appear in their most damaging form at senior levels.



Target unifying purpose through team chartering. Arm
leaders with techniques to ground new teams in acommon vision.

Develop leaders in cohorts. Cohort-based developmentbuilds commonality in how leaders approach their roles as
employee growth champions and advocates, and in theirskills to identify talent and leverage technology tomanage the workforce, providing a safe forum for open
discussion of the company’s culture.

© Development Dimensions International, Inc., The Conference
Board Inc., EYGM Limited, 2018. All rights reserved.

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Global Leadership Forecast 2018

Adjusted for Disruption
Top Drivers of Organisational Success ThroughComplexity and Change
Exponential technology and market change are motivating organisations and their leaders to continually rethink,redesign, refocus, and readjust. Within this complex environment, what might have made businesses successful in thepast can’t necessarily be counted on for the future. As a result, more organisations are looking to optimise theircapability to sense customer and market needs, shift stakeholder mindsets, and adjust their activities. Our global
research indicates that organisations rated as more agile by their leaders differentiate themselves in key leadership
practices that drive more informed, frequent adjustments. Paired with leader capability to sense and act on neededchanges, these companies are better prepared to anticipate trends, respond to competitive forces, and adjust to changing
customer needs.

> Organisational Practices that Drive Organisational Agility—and Better Shift-Making© Development Dimensions International, Inc., The Conference
Board Inc., EYGM Limited, 2018. All rights reserved.

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Global Leadership Forecast 2018

Sense, Act, Shift, Repeat
Organisational agility requires understanding and anticipation of
how the market environment will change, so that its leaders
can maneuver successfully and rapidly. Our research showsthat more‐agile organisations have leaders who are better
positioned to meet this challenge. Globally, their leaders are
3.2 times more prepared to anticipate and react to the natureand speed of change, and 1.2 times more capable ofresponding to the competitive environment.

> The Impact of Organisational Focus on
Internal Customers

These organisations enable practices that improve theirleaders’ capability to sense and respond to change (see figure
at left). Specifically, they excel in three areas: Informing decisions through data and analytics.
More agile organisations in Australia/NZ leverage data
and analytics to fuel their sensing capability, with 81
percent of their leaders indicating that they’re prepared
to use data to guide business decisions. This contrasts toonly 63 percent at low‐agility organisations. They werealso 2.8 times more likely to leverage data to makestrategic talent decisions.
 Integrating multiple and diverse perspectives todrive successful change efforts. Australia/NZ leaders
in more‐agile organisations are 3.1 times more likely thantheir low‐agility counterparts to collaborate and rely on
diverse perspectives to create new solutions andopportunities, and 2.8 times more likely to use multiple
perspectives to gauge success.
 Encouraging rapid development of new and improved capabilities. Twice as many leaders at more‐agileorganisations in Australia/NZ indicated that failure is embraced or rewarded in pursuit of innovative or different
approaches (27 versus 7 percent, respectively).

Adjusted for Continuous Leader Improvement
You can’t consistently anticipate how to succeed with your customers without understanding their needs and growing
with them. Our research on over 2,400 organisations across the globe found that those that excel in their focus onexternal customers—who are more agile and more likely to sense, act, and shift around those needs—have been just as
effective with their internal customers. As shown in the figure above, their efforts pay off in leadership outcomes thatwill help ensure continued success as they readjust efforts.
WHERE TO STARTDrive first for speed. Encourage leaders to seek rapid
deployment and feedback for new prototypes so thatthey gather the information needed to quickly makedecisions and adjust.



Identify data blind spots. Inventory data sources anddetermine if there are gaps in the information needed tosense for and make decisions.



HOW TO EXCEL + DIFFERENTIATECreate cross-functional, shared goals. Set common goals
across different parts of your organisation to encourageinterdepartmental cooperation and collaboration. This will
help identify and remove information silos and barriers
that can impede change efforts.

© Development Dimensions International, Inc., The Conference
Board Inc., EYGM Limited, 2018. All rights reserved.

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

Think big, act small. Rapid deployment of new andimproved capabilities requires quick communication anddecision making, which can be enabled by a smallergroup. Organisations that ranked highest in agility were
smaller in size and less likely to have grown in complexity
due to mergers and acquisitions.



Aim to “adjust,” not “adapt.” Organisations that are more
successful have adopted a mindset of tinkering andadjusting. Adapting generally implies change that
happens over time, whereas adjusting can beinstantaneous.

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Global Leadership Forecast 2018

No Engaged Workforce
Without Engaged Leaders
To Raise Leader Engagement,
We Need to Raise Up Leaders
The direct link between engagement and bottom‐line results is clear to the leaders we surveyed. When asked how they
will drive better business performance, Australia/NZ respondents said they would focus on enhancing organisational
talent (73 percent), building a high‐performance culture (83 percent), and engaging employees (79 percent). In
aggregate, 94 percent of leaders told us they are engaged, and 91 percent want to stay on with their organisation to makean impact. These findings are encouraging, as leaders continue to wield the greatest single impact on workplaceengagement. But the findings, summarised in the figure below, also reveal important areas where they need support—
particularly in career development, a key driver of employee engagement. The fact that 51 percent of leaders believe they
will need to move on to advance their career is a wake‐up call.
> Organisational Practices that Drive Organisational Agility—and Better Shift-Making in Australia/NZ© Development Dimensions International, Inc., The Conference
Board Inc., EYGM Limited, 2018. All rights reserved.

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Global Leadership Forecast 2018

HR professionals in Australia/NZ indicated that only 46 percent of the leadership development programs theysupervised were connected to business priorities. Only 21 percent of HR leaders report that their leaders have high‐quality, effective development plans, while only 54 percent report that their leaders have regular reviews of that planwith their manager and only 43 percent deliver sequenced leadership development programs – versus independent
events. No wonder many are unclear about their leadership path and feel they must leave the organisation if they are toadvance! In Australia/NZ, intent to leave has increased for 26 percent of respondents, but decreased for 18 percent, with
56 percent unchanged. Millennial leaders are slightly more inclined to leave than leaders in other generations (31 percent
compared to 27 percent for Generation X and 23 percent for Baby Boomers). HR responses revealed that attrition forhigh potentials was lower (9 percent) than that for all leaders (14 percent).

To Raise Employee Engagement Levels, HR Needs to Step Up
HR needs to do a better job of supporting these leaders because disengagement is infectious. And a toxic culture cantake years to rebuild. Engagement—and in turn, retention—doesn’t happen by accident. It takes concertedorganisational effort, a motivated leader, and employees who take responsibility for their own engagement. Globally,
there is a link between collaborative cultures and higher retention.
Leaders at all levels need support. A full 57 percent of leaders in Australia/NZ have never had a mentor (though 49
percent mentor others) and, perhaps more disturbing in a global work world, 73 percent of Australia/NZ leaders havenever had an international assignment.
Here’s good news: When rating their eﬀectiveness in using inspiration (motivating increased employee energy andeﬀort) and empathy (deepening relationships with others by perceiving and acting on their emotions), most leaders said
they were at least moderately eﬀective in using both skills (92 percent and 93 percent, respectively), which are hallmarksof an engaging leader. Critically, they want to lead—68 percent see it as a leader’s role as custodian of the organisation’s
purpose to a great or very great extent. About three‐quarters (67 percent) of these leaders support critical activitiesaligned with purpose. Well over half (60 percent) of the Australia/NZ companies have articulated vision, mission, andpurpose statements; conversely, only 54 percent have an employee value proposition. Here, leaders can play a crucialrole in making the connection between the job an employee does and the organisation’s vision, mission, and purpose—asignificant engagement driver.
The findings in this study corroborate engagement‐related research at The Conference Board*. The 12 behaviours
mastered by highly engaging leaders include:
Provides a strong sense of meaning and direction by:
1. Developing a compelling vision of what people canaccomplish.
2. Communicating in a way that brings people along.
3. Setting a clear strategic direction for direct reports.
Brings out collective brilliance by:
4. Building trust and acting with integrity.
5. Challenging the status quo and inspiring creativity.
6. Fostering a culture of collaboration.

Builds a high‐performance environment by:
7. Setting high standards.
8. Creating a sense of urgency.
9. Empowering employees.
Unlocks employees’ full potential by:
10. Building relationships one person at a time.
11. Providing clear and consistent rewards/recognition.
12. Driving development and growth.

* Ray, R.L., Hyland, P., Pressman, A., Dye, D.A., & Kaplan, J. (2016, February), DNA of Engagement: How Organisations Build and Sustain
Highly Engaging Leaders, New York, The Conference Board, https://www.conference‐board.org

WHERE TO STARTHOW TO EXCEL + DIFFERENTIATEBuild engaging leaders. Forge a robust leadershipdevelopment program that will develop, retain, andempower leaders at all levels.



Build an engaging culture. Start with the senior-most
executive leaders becoming champions for change. Like
everything else, the tone starts at the top.

Ensure that the basics are in place: job descriptions,behavioural anchors, custom development plans, ondemand and formal training programs, experiential
learning opportunities, and continuous feedback.

Embed messages about the business case forengagement into all communications. Monitor progressand celebrate successful milestones.



Align strategic projects with leadership development
efforts to ensure that leaders are exposed early on to realworld challenges.

Leverage your engaged leaders by asking them to mentor
other leaders, participate in development initiatives, andcoach their peers.

Communicate the path for leaders as well as the skills tomaster along the way. Set up a mentoring program andteach managers how to coach so that their nowenhanced engagement is contagious.

Reward and celebrate your highly engaging leaders; they
are the factory for your leadership cadre.

© Development Dimensions International, Inc., The Conference
Board Inc., EYGM Limited, 2018. All rights reserved.

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Global Leadership Forecast 2018

HR’s New Role
Are They Up to the Challenge?
In Global Leadership Forecast 2014|2015, we put forth the concept of a new role for HR, moving from the overused termof “partner” to “anticipator.” Only a small number of HR professionals, worldwide, considered themselves Anticipators.
Even fewer leaders thought their HR colleagues fell into this category. Not more than six months after the release of theForecast, Harvard Business Review devoted an entire issue to the role of HR. The provocative title of the lead article?
“Why We Love to Hate HR and What HR Can Do About It.”* The opening salvo of this piece summarises the state of
HR: Recent complaints about the HR function have touched a nerve in a large, sympathetic audience. The most vocal
critics say that HR managers focus too much on “administrivia” and lack vision and strategic insight. Let’s take a deeper
dive into HR’s changing and evidence‐based actions to build their competence and credibility.
> Shifting Perceptions of HR’s Role over the Past Three Years in Australia/NZ© Development Dimensions International, Inc., The Conference
Board Inc., EYGM Limited, 2018. All rights reserved.

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Global Leadership Forecast 2018

HR Professionals: A New Role

> Eight Practices that Anticipators Do More
Effectively Than Partners

We defined three categories for HR professionals:
 Reactor: Sets and ensures compliance with policies;
responds to business needs; installs basic initiatives tomanage talent.
 Partner: Works toward mutual goals with line managers;
shares information with the business about talent issue
gaps; provides HR solutions.
 Anticipator: Uses analytics to forecast talent needs;
provides insights and solutions to ensure high‐quality
supply of talent; links talent planning to business planning.
Every HR professional must perform some tasks in each role.
However, while over the past decade HR professionals havefocused on their function’s operating models, policies, andsystems, they now must refocus on how to manage talentstrategically. HR must make the transition to the Anticipator’srole, and that hasn’t happened. In fact, as the graphic at left
shows, the HR function has regressed since 2014 as viewed bybusiness leaders.
Fewer than one in six Australia/NZ HR professionals (16 percent)consider themselves Anticipators, almost the same percentagethat consider themselves to be Reactors (14 percent). And again,
business leaders are less likely to place HR professionals in the
Anticipator role. In both 2014 and 2018, Australia/NZ businessleaders were 3.4 times as likely as HR professionals to use theReactor label.

Making a Difference
So how can HR professionals make progress?
Based on data from over 2,400 organisations across the globe, we looked for talent practices that differentiate the three
categories of HR professionals. While dozens of practices set Reactors apart from Anticipators and Partners combined,
we wanted to focus on those practices that statistically separate Partners from Anticipators. These are shown in the
figure above.
Too often there’s a weak link between strategic and HR planning. In fact, only 28 percent of global HR respondents feelthat this connection is tight and starts early in the planning process. Throughout Global Leadership Forecast 2018, we’vehighlighted the importance of predictive analytics, which are the Anticipator’s lifeblood. And, for the first time, thetechnology is in place to better advance analytics. Analytics are essential to maximising your investments toward
improving leadership quality and supply.
* Capelli, P. (2015, July), Why We Love to Hate HR and What HR Can Do About It, Harvard Business Review, www.hbr.org/2015/07/why‐we‐love‐to‐hate‐hr‐and‐what‐hr‐can‐do‐about‐it

WHERE TO STARTTake a step back and gauge. Which of the three roles
best reflects HR in your organisation? Don’t forget to seek
input from line managers.

Move toward the Anticipator role by improving HR capability
in the eight evidence-based practices described in the figure.

Ensure that HR is well represented in your company’s
strategic planning process.



Step up to greater accountability by providing businessleaders with the support and tools they need to bolster
engagement, employees’ sense of purpose, and growth.

© Development Dimensions International, Inc., The Conference
Board Inc., EYGM Limited, 2018. All rights reserved.

HOW TO EXCEL + DIFFERENTIATE

49



Ensure that you’re building stronger predictive analytic
team capability.

Consider more rotation of respected line leaders within
and out of the HR function.



Step up to greater accountability. HR’s role is to createbusiness value through talent. They own this imperative.



Deploy smart HR technologies to enable leadershipeffectiveness while freeing up HR professionals’ time toconcentrate on the more value-added tasks their businesses
require.

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Global Leadership Forecast 2018

HR Under Pressure
Falling Behind in the Race to Transform
The future of work is not tomorrow. It is now, and the implications for our workforces are profound. New career paths,
evolving organisational structures and business models, analytics, and digital disruption are trends every HR
professional faces. Never has the role of HR leadership been more important in making this transformation happen.
Business leaders no longer need to be convinced how important talent is. In a recent article, “The CEO’s Guide toCompeting Through HR,”* the authors conclude that HR needs to step out of its traditional silo and embrace a strategicrole, using talent to drive value rather than just responding passively to the needs of the business. While HR leadershipshould be in an enviable position, in reality it’s losing the race. Their organisations are changing faster than they are,putting them even farther behind. We’ve devoted two findings to HR leadership. The section “HR’s New Role: Are They
Up to the Challenge?” identifies the evidence‐based practices that drive better HR performance. Here, we address thechanges HR leaders are experiencing and how prepared they are to meet key workplace challenges relative to leaders inother roles.
> How Australia/NZ HR Leaders’ Jobs and Attitudes Have Changed over the Past Three Years© Development Dimensions International, Inc., The Conference
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HR in the Pressure Cooker> HR Leaders Versus Other Leaders on Key Challenges

For Australia/NZ, 89 HR professionals completed the HR‐
specific version of Global Leadership Forecast 2018, alongwith 868 leaders who responded to the leader version.
Additionally, five percent of the leader population were in
HR, giving us another rich source of data.
We started by asking HR professionals how their jobs andattitudes have changed over the past three years (see figure
at left).
HR professionals reported a considerable increase for every
experience or challenge. In fact, only one item was rated
relatively low: intention to leave current job. Most notable,
by far, is the impact of digital disruption on the HR role in
the form of an increased need to up their game in applying
both HR technology (73 percent) and analytic skills (76percent). Pressure to demonstrate financial impact, also
requiring keen analytic skills, was on the rise at 67 percent.
Near the top of increases was the need to become a trusted
senior advisor with 66 percent reporting increased pressures.
As we saw in the section “HR’s New Role,” perceiving a needto change is far different than making one. For HR
professionals, 23 percent are thinking more about leaving
their organisation. However, on a more positive note, 40
percent felt more engaged.

The graphic above is based on the global sample of HR leaders’ responses to the leader survey. They were asked to rate
how well prepared they felt for each of seven items characterising the ever‐changing work environment (volatility,
uncertainty, complexity, and ambiguity). The number depicted in the graphic represents the difference between the“very effective” responses of leaders who are in an HR role versus all other leaders. In every case, HR leaders felt lessprepared than their peers in other leadership roles. These responses are concerning. The work world is experiencing
considerable upheaval, yet only one in five HR leaders, on average, felt very prepared to handle the challenges on thegraphic.
Worse yet, the biggest differences are in their perceived effectiveness to operate in a digital environment and use
analytics, despite the increased pressure they’re feeling to do so. For example, more than 37 percent of leaders worldwide
felt very prepared for a digital workplace. Not an impressive number. By comparison, only 16 percent of HR leaders felt
the same way.
Consider this: The digital age will exert a more profound impact on our workforce in about one‐tenth of the time of any
other massive economic shift. Yet, those HR leaders who should be taking charge to prepare tomorrow’s leaders are
farther behind than those they’ll need to support.
* Bafars, F., Ellsworth, D., & Gandhi, N. (2017, July), The CEO’s Guide to Competing Through HR, McKinsey Quarterly.

WHERE TO START

Focus on building capability in business acumen,
advanced analytics, and new HR technologies. Elsewherein this report, you’ll see that the areas where HR leaders
are feeling pressured correspond to areas where theirperformance is perceived to be lacking.

We suspect that HR leaders may be under-investing intheir own learning as they strive to meet the growing
learning needs of leaders in other functions. In reality, HR
should be first in line for increased resources and in acontinual learning mode.

© Development Dimensions International, Inc., The Conference
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HOW TO EXCEL + DIFFERENTIATE

51

As “owners” of leadership development, one of HR’s chiefroles is to prepare leaders for digital transformation. Yet,HR leaders are less prepared than leaders in otherfunctions. Building HR’s digital leadership skills is essential
not only to develop others, but also to manage
impending radical changes in HR technologies.

HR professionals often label themselves as the enablers oftalent development, while line managers are the real
owners. HR leaders need to take primary ownership for
ensuring that their organisations have the talent in place
to meet current and future business challenges.

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Global Leadership Forecast 2018

People Analytics
Reversal of Fortunes
Pressure on the HR function to adopt and excel in people analytics—defined as “the systematic identification andqualification of the people drivers of business outcomes, with the purpose of making better decisions”*—has been
intense for several years. Analytics are viewed as a prime route to greater strategic influence, and the thirst for deeper
analytics know‐how has spawned a five‐fold spike in interest over the past five years. Hundreds of articles have been
written in HR publications, dozens of conferences dedicated, and entire academic programs in HR analytics offered atuniversities such as Cornell, Texas A&M, and New York University. With this steady drumbeat of exhortation andenergy, surely HR has grown its proficiency in analytics methods since Global Leadership Forecast 2014|2015, right? This
current Forecast took a detailed view of analytics progress and practices across more than 2,500 global organisations to
ask: What’s the status? What’s emerging? and What works to drive HR—and the enterprise—forward?
The figure below presents the state of people analytics practices. The top two rows [ ] present the percent ofAustralia/NZ organisations succeeding in each analytics practice along with the associated three‐year success trend. The
bottom two rows [ ] show the impact of each analytics practice in terms of an organisation’s leader bench strength andfinancial performance based on the global data set of over 2,400 companies.
> People Analytics Practices: Success, Trends, and Impact© Development Dimensions International, Inc., The Conference
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A Stunning Regression
Instead of an expected increase in analytics effectiveness, we found that success rates declined over the past three years
for every type of analytics we compared (shown in the figure at left). Though companies attempted analytics more often
than in 2014, these efforts were more likely to fail than to succeed.
These struggles were common for more traditional types of analytics (internal benchmarking and gathering efficiency,
reactions, or results metrics). On average, only 28 percent of Australia/NZ companies were succeeding in these. The
picture is even more bleak for emerging forms of analytics, such as creating growth‐centric leadership planning models,
using “what if” scenarios to forecast future talent needs, and data visualisation and storytelling to compel the audience.
On average, only 15 percent of Australia/NZ organisations succeed here.
To put these declines in context, it’s important to gauge whether this is a true backward step in effectiveness or a higher
standard for success. Our data shows that it’s likely a case of the analytics bar rising faster than HR can leap over it.
Despite low success rates, 76 percent of HR professionals in Australia/NZ reported an increase in their analytics skills
and data‐driven decision making. Yet, this clearly isn’t enough to keep pace.

Highest-Impact Analytics Practices
Though success rates are similar across analytics types, distinctions between them become clearer when linking toleadership and business outcomes. By doing so, we can show which forms of effective analytics outperform the others.
The graphic at left shows the link between various types of analytics and two critical outcomes: bench strength (theability to rapidly fill critical roles with qualified internal candidates) and a financial composite of revenue growth,
operating margin, EBITDA, and return on equity.
Every type of analytics showed a notable link with one or both outcomes, led by benchmarking internally, creating
leadership‐planning models, and using data visualisation/storytelling techniques. On average, companies excelling inthese analytics were 6.5 times more likely to have high bench strength and 3.1 times more likely to outperform peers
financially.

It’s Not Just About the Numbers
It’s easy to make the mistake that analytics are just about the numbers. But analytics also drive and exemplify objectivity
and fairness. Companies strong in people analytics have more gender diversity in leadership (especially high‐potential
pools), a stronger culture of promotion from within, and higher leader success rates.
The bottom line: More analytical practices are more diverse practices, and they reinforce strong “grow your own” cultures.
When analytics are in place, so are objective decision‐making tools, systematic processes, and a bias‐free, up‐to‐date status of
talent.

Analytics as Accelerator
Analytics accelerate HR professionals deploying them: Across the globe, those succeeding with advanced analytics are 6.3
times more likely to have new advancement opportunities and are 3.6 times more likely to have a stronger reputation withsenior business leaders.
And analytics accelerate talent practices, making good ones even better. Companies that create leadership planningmodels, gather results metrics, and are adept at data visualisation and storytelling see a higher return on their talent
investments than those that neglect or struggle with these practices.
* van den Heuvel, S., & Bondarouk, T. (2017), The Rise (and Fall?) of HR Analytics: A Study Into the Future Application, Value, Structure, andSystem Support, Journal of Organisational Effectiveness, 4, 157–178.

WHERE TO STARTHOW TO EXCEL + DIFFERENTIATE



Confirm business questions. Analytics that fail to start with business(not just HR) questions will be challenging to execute and, often,wholly unpersuasive to stakeholders.



Build skills in visualisation and storytelling. These are powerful ways
to communicate data; such messages are more memorable andpersuasive than numbers or text.

Get your data house in order. Spend time planning your data
foundation to avoid misinformed or impossible analytics.



Align effort toward highest-impact methods. Internalbenchmarking, leadership planning, and visualisation/storytelling
had the strongest outcome links in our research.

Recognise analytics as change management. Numbers mean
nothing if they don’t drive action; pair analytics with interactive
data views to build engagement about a practical path forward.



Staff for data savvy. Analytics is a team sport; develop and hire
not just for abilities in data science, but also business acumen,visualisation, and ethics.

Map talent scenarios to business strategies. Sophisticated, highimpact workforce planning matches talent needs to growth
projections, ensuring that talent is where it’s needed and when.



Build internal and external networks. Seek partnerships with dataminded individuals across functions, local interest groups, andinternal analytics centers of excellence.



Adopt proven methods such as key driver analysis, text analytics,
survival analysis, decision trees, and scenario planning.

© Development Dimensions International, Inc., The Conference
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Global Leadership Forecast 2018

Leadership Megatrends and Payoffs
The research summarised in this report shows the powerful and pervasive—yet rarely fulfilled—impact of leadership
practices on organisations striving to meet their business challenges, now and in the future. We’ve delved into overtwo dozen findings focused on how these enterprise-level objectives are achieved. Each finding includes precise,practical recommendations for learning from top-performing companies and for listening to and maximising thepotential of leaders themselves. Now, it’s time to take a step back: first, to see the overarching trends emerging fromthe research as consistent guiding principles flowing broadly into all aspects of leader talent management; andsecond, for an integrated look at the links between practices and payoffs as fuel for assembling a comprehensive
leadership strategy.

Six Leadership Megatrends from Global Leadership
Forecast 2018
Digital Reshapes the Workforce: Across nearly every facet of the research, we saw the influence of digital
readiness. Digitally advanced organisations and leaders are already outperforming their less technologicallysavvy peers, who risk being left behind, permanently.
Data’s Power Extends Beyond the Numbers: We expected to see data as an increasingly valuable commodity
for people and business decisions. But we didn’t anticipate the heavy influence data and analytics have on
business’ human side: inclusivity, agility, and fairness.
Culture Looms Crucial: Leadership strategies will fail without solid cultural cornerstones—clearly grasped andenlivened purpose, peer coaching, experimentation, psychological safety, and fully incorporated, diverse
gender and generational views.
DIY Is DOA: Leaders who stand (and learn) alone—not given access to or eschewing coaching from peers andmentors, and failing to adopt a collective, shared, and team-centric view of leadership—may survive in theworkplace, but they surely won’t thrive.
The Potential Pool Swells to a Lake: Organisations taking a broad view of potential—expanding their reach toactivate and accelerate leadership talent—prove more financially successful, feature stronger top leaders, andemploy more women at every leader level.
HR Navigates a Challenging Road Ahead: HR’s reputation as an Anticipator has taken a hit along with its
declining rates of analytics success. Also, HR’s own digital readiness is lacking. If this isn’t addressed soon,
HR’s ability to drive digital advancement will be crippled.

Leadership Practices Scoreboard
Across 2,400+ organisations, which practices have the strongest payoffs for leadership and financial performance?
The table on the facing page shows 34 leadership practices across four categories. The percentage of organisations
using the practice is indicated along with the impact that each practice had on three outcomes from the research:
Program Quality (aggregate leader-rated quality of assessment, development, and performance management
programs); Bench Strength (supply of capable leaders for critical leadership roles within the next three years); andthe organisation’s Financial Performance (composite of operating margin, EBITDA, revenue growth, and returnon equity).
Key
No circle = nominal impact© Development Dimensions International, Inc., The Conference
Board Inc., EYGM Limited, 2018. All rights reserved.

= moderate impact

54= strong impact

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Global Leadership Forecast 2018

Leadership Practices Scoreboard
Links to Outcomes Based on Global Data Set
Percentage of Australia/NZ Organisations Using Each Practice
10% ≥ global rating–10% ≤ global rating
Program
Quality

Leadership PracticeBenchStrength

Financial
Performance

Percentage
Using

Talent Management
Leadership development programs begin with a diagnosis of leader strengths/weaknesses.

54%

Leadership competencies serve as the foundation for multiple leadership talent management64%

systems.
Talent review processes have a reputation for being fair and objective.

62%

Competencies required for success in key leadership positions are clearly defined.

58%

Information from assessments and simulations is used to guide leader development plans.

51%

Information from assessments and simulations is used to make leadership hiring and promotion
decisions.
Individual leadership initiatives, programs, and processes are well integrated and aligned to key
business priorities.
Systematic processes (e.g., strategic talent planning) are used to identify the quantity and qualityof leadership required to drive future business success.

52%
46%
62%

We know the up-to-date status of our leadership talent capability across the organisation.

49%

We use a formal process for identifying employees who could become global/multinational

29%

leaders.
We use formal programs to ensure smooth leadership transitions at all levels.

25%

Formal mentoring programs are available for leaders.

39%

Performance Management
We have a fair and transparent performance management system at all levels.

75%

Performance management discussions occur ongoing rather than just once a year.

75%

Performance management discussions include a heavy focus on personal development planning.

42%

Ratings have been eliminated from our performance management process.

26%

Development
Leaders practice and receive feedback on key skills with their managers.

62%

Leaders are offered a library or learning system from which they can choose on-demand courses.

51%

Leaders receive development personalised specifically for them rather than as part of a cohort.

56%

Leaders regularly review their development plan with their managers.

54%

Leadership development modules are positioned with leaders as a planned sequence rather thanas independent events.
We have a dedicated learning experience manager (someone who designs and sequences
personalised, engaging learning for leaders).

43%
39%

Our leaders have high-quality, effective development plans.

21%

Managers who fail to develop their leaders receive negative consequences as a result.

7%

High Potential
High-potential leaders’ performance in developmental assignments is carefully evaluated.

63%

Developmental activity for high-potential leaders is targeted toward their specific development needs.

78%

Our process for identifying high potentials is unbiased and nonpolitical.

67%

We collect objective assessment data on high potentials’ capabilities, potential, and readiness.

66%

Managers are held accountable for supporting high-potential leaders.

42%

The process for identifying high potentials is consistent across the organisation.

76%

We have a mentoring/coaching program specifically for high-potential leaders.

64%

High-potential leaders are told and aware of their special status.

47%

We measure the effectiveness of programs for developing high-potential leaders.

61%

The identities of leaders labeled as high-potential are well-known within the organisation.

15%© Development Dimensions International, Inc., The Conference
Board Inc., EYGM Limited, 2018. All rights reserved.

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Global Leadership Forecast 2018

Appendix: Demographics
Organisation Characteristics© Development Dimensions International, Inc., The Conference
Board Inc., EYGM Limited, 2018. All rights reserved.

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Global Leadership Forecast 2018

Leader Characteristics

HR Benchmarks
We asked HR participants to provide general information about the makeup and turnover and success rates of theirleaders. The figure below provides median benchmarks from organisations across the globe. The bars represent thegeneral range of responses received from HR respondents (between the 10th and 90th percentiles); the green dots
indicate the average of all organisations; and the yellow stars indicate how leading organisations (represented by thosewith the highest leader quality and bench strength) responded on average.

© Development Dimensions International, Inc., The Conference
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Global Leadership Forecast 2018

About DDI
With 1,100 associates strong worldwide, we work side by side with clients to build a sustainable pipeline of leaders tomeet business needs—today and in the years ahead. Because, like you, we believe better leaders lead to a better future,
we have dedicated ourselves to the science and practice of leadership for nearly five decades. Our solutions draw fromour four areas of leadership expertise: Strategy | Selection | Development | Succession Management.
We’ve worked with clients to define and achieve great leadership at every level, from aspiring leaders all the way to theC‐Suite. Our promise remains constant: Together, we can co‐create a solution that is unique to your organisation andaimed squarely at meeting your business goals. To learn more about DDI, join us at www.ddiworld.com

About The Conference Board
Founded in 1916, The Conference Board is a global, independent business membership and research association working
in the public interest. Our agenda is simple: to help leaders navigate the biggest issues impacting business and better
serve society. We believe in innovative approaches that make you think—and act—differently. And everything we doreflects the input of our members and their real‐world challenges.
We do this by delivering business insights. We connect senior executives across industries and geographies to shareideas, and our experts create fact‐based research and consensus‐driven policy statements to help leaders address theirmost important business issues.
Because we are independent, nonpartisan, and nonprofit, our work is trusted. If you learned it at The Conference Board,
you can count on it. To learn more about The Conference Board, visit us at conference‐board.org

About EY’s People Advisory Services
EY’s People Advisory Services believes a better working world is helping our clients harness their people agenda—theright people, with the right capabilities, in the right place, for the right cost, doing the right things.
We work globally and collaborate to bring clients professional teams to address complex issues relating to organisationtransformation, end‐to‐end employee life cycles, effective talent deployment and mobility, gaining value from evolving
and virtual workforces, and the changing role of HR in support of business strategy. Our EY professionals ask better
questions and work with clients to create holistic, innovative answers that deliver quality results.

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About the Authors
Evan Sinar, Ph.D., is DDI’s Chief Scientist and Vice President. He designs and executes analytics linking
leadership programs to business outcomes and produces actionable insights about talent trends and people
practices, including leading DDI’s Global Leadership Forecast and High‐Resolution Leadership research programs.
He is a top influencer for analytics, data visualization, and people science, frequently authoring on these topics for
major conferences and publications. His work has been featured in Chief Learning Officer, Training Magazine, andnumerous other publications. Evan holds a Ph.D. in industrial and organisational psychology and is a Fellow of
the Society for Industrial and Organisational Psychology.
Richard S. Wellins, Ph.D., is a leading expert on teams and leadership. He recently completed a 35‐year careerat DDI, where he was head of global research and marketing. He currently serves as a senior research associate forHR.com, DDI, and EY. Rich received his Ph.D. from American University. He has authored six books, including
the recent Your First Leadership Job. He speaks at major conferences around the world and has published morethan 50 articles. His work has appeared in The Wall Street Journal, CNBC, Fortune, and the BBC.
Adam L. Canwell, a Partner, People Advisory Services, Ernst & Young and a global leader of EY’s leadershipoffering based in Melbourne, Australia. He has more than 20 years’ experience in providing people advisory
services to clients. He has delivered transformation programs across multiple product and service industries –working with FTSE 100 (or their equivalent) organisations. Adam has an MSc in coaching and consulting forchange from HEC at Oxford University and an M.A. (Oxon) Politics, Philosophy and Economics from Oxford
University.
Rebecca L. Ray, Ph.D., serves as the executive vice president, knowledge organisation, for The Conference
Board. She oversees the research planning and dissemination process for all three practices areas (Corporate
Leadership, Economics and Business Development, and Human Capital) and is responsible for defining the
research agenda that drives the company’s business planning process. She is responsible for continuing
integration of The Conference Board’s research and engagement efforts. Rebecca is author of numerous articles
and books, including her coauthored works Measuring Leadership Development (McGraw‐Hill) and Measuring
the Success of Employee Engagement (ATD).
Stephanie Neal, M.A., is a consultant in DDI’s Leadership Reach Center. She conducts research to explore
workplace and leadership trends, including topics focused on executive leadership and gender diversity.
Stephanie is the author of “Your Next CEO Should Be a Social CEO” and a coauthor of Ready‐Now Leaders:
Cultivating Women in Leadership to Meet Tomorrow’s Business Challenges and Women as Mentors: Does She
or Doesn’t She? A Global Study of Businesswomen and Mentoring.
Amy Lui Abel, Ph.D., is managing director of Human Capital at The Conference Board. She leads research efforts
focusing on human capital analytics, leadership development, labor markets, strategic workforce planning, talentmanagement, diversity and inclusion, human resources, and employee engagement. Amy has been published in
People & Strategy Journal, The SAGE Handbook of Workplace Learning, Human Resource Development Quarterly,
and ATD’s TD magazine.
Amanda Popiela is a researcher for Human Capital at The Conference Board. She conducts research in a varietyof areas, including talent management, employee engagement, and diversity & inclusion. Her recent reports
include Mental Health and Well‐Being in the Workplace and Divergent Views/Common Ground: The Leadership
Perspectives of C‐Suite and Millennial Leaders.

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Joe Dettmann, Ph.D., a Partner/Principal, People Advisory Services, Ernst & Young LLP and a North American
leader of EY’s leadership offering. He has a Ph.D. in industrial/organisational psychology and has spent his career
as a human capital and talent management consultant. At EY, Joe has been instrumental in the Future Work Now
transformation offering and helps clients design for the future of work and optimize their human capital byactivating modern talent strategies. As part of that, he has been the architect of EY’s Future of Work ReadinessIndex technology and has led the development of EY’s Digital Leadership offering.
Liz Collins, M.S., is a Senior Manager in People Advisory Services, Ernst & Young LLP. She has a Masters inorganisational psychology from Columbia University and has spent her career working with clients to develop
data supported workforce strategies in tandem with the client’s talent management programs, people key risk
programs, and organisational and leadership development activities. Liz works primarily with Financial Services
clients across Banking, Capital Markets and Insurance.
Louise Rolland is Executive Director, People Advisory Services, Ernst & Young. She came from academia, andher work focuses on all aspects of workforce and talent strategy. As a labor demographer, she has led aninternationally focused research agenda to investigate the impact of demographic change and global labor trends
on business. She is a thought leader and pragmatic strategist who works closely with clients on designing
practical responses to the changing world of work and the implications for leaders and their people.
Tony Cotton is a Senior Manager, People Advisory Services, Ernst & Young LLP. He is an organisational
psychologist and psychometrician with over 30 years’ experience. He has conducted workplace research inAustralia, Canada, and the UK. Tony has worked directly with senior leadership groups in organisations across a
range of sizes and functions providing high level workplace research and statistical analysis of workforce survey
data. For five years, Tony was responsible for the design and analysis of one of the largest workplace surveys in
the Southern hemisphere.

About the Region Authors
Andrew Warren‐Smith is Managing Director of DDI Australia. With more than 25 years of entrepreneurial
insight, commercial astuteness and leadership knowledge having worked across a number of regions guiding
client leadership decisions, including building leadership capacity and capability; implementing talent systems
and processes and supporting executives to drive key business and cultural outcomes, Andrew is considered a key
thought leader and expert client partner.
Dominique Powrie, has an HR and general management background leading teams in multiple countries
throughout Australia and Asia Pacific, ASX and NYSE listed companies. She has been involved in businessacquisitions, integration, and operated in complex, culturally diverse environments experiencing fast‐facedchange. This corporate background enables her to relate to her client’s experiences and share relevant insights
and best practices as our leading Managing Consultant.
Michelle Wallace, has a background in OD, generalist HR and recruitment, bringing broad insights andexperiences of HR and leadership practices to her role as Acting General Manager. Her understanding of DDI’sleadership acceleration solutions, along with her inquisitive approach to understanding her clients needs, allow
her to design and deliver of a range of engagements that maximise organisational capability and businessoutcomes.
Christien Winter is an experienced leader who has specialised in HR advisory services for over 20 years. With akeen interest in building teams and developing individuals, she joined Sheffield over 20 years ago and has been a
Director/Partner of the firm since 1995. She consults and facilitates across the full spectrum of Organisational
Development and leads the DDI practice at Sheffield—the exclusive licensed partner for DDI in New Zealand.

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Global Leadership Forecast 2018

Sponsors
Association for Talent Development
The Association for Talent Development (ATD, formerly ASTD), is the world’s largest association dedicatedto those who develop organisational talent. These professionals take the knowledge, skills, and abilities ofothers and help them achieve their full potential. ATD’s members come from more than 120 countries andwork in public and private organisations in every industry sector. ATD supports the work of local professionals in morethan 125 chapters, international strategic partners, and global member networks. Visit www.td.org

CNBC
CNBC, First in Business Worldwide, is the recognised world leader in business news and financial
information, providing the latest real‐time market information, unrivaled coverage of breaking news, in‐depth
analysis and interviews with business leaders and political figures from around the world. CNBC has a
distribution of approximately 409 million households worldwide. Visit www.cnbc.com for more information.

HR Certification InstituteFor more than 40 years, top executives have put their trust in fully accredited HR Certification
Institute® (HRCI®) credentials when making hiring and promotion decisions. As a result, more than
500,000 HR professionals worldwide have strengthened and advanced their careers and strategic
value by meeting HRCI’s rigorous certification standards. Visit HRCI at www.hrci.org

HRoot
HRoot is a leading human resources media and Internet company in China, with brands andservices such as www.HRoot.com, Human Capital Management magazine, Overclass, Society for
HR Executives, and more. More than 20,000 people have attended HRoot’s offline events eachyear, while its publications have a readership of 30,000. HRoot serves more than 20,000 customers now, including morethan 95 percent of the Fortune 500 companies in China. Visit www.HRoot.com

Human Resource Excellence Centre
Human Resource Excellence Centre (HREC) is China’s upmarket, professional, and influential
membership‐based organisation for HR professionals. By the end 2017, more than 3,500 companies
had joined HREC as corporate members. HREC member services include events, magazines, survey
reports, public and in‐house training, corporate visits, etc. HREC is a premier resource for leading HR professionals in
China to achieve organisational goals and boost individual growth.

Manufacturing Leadership Council
Founded in 2008, the Manufacturing Leadership Council’s vision is to create and inspire a
global community of manufacturing executives who believe in the proposition that
manufacturing is the fundamental driver of economic and social prosperity, and that its
growth will lead to a better future and a higher standard of living for all people. The MLC’s mission is to inspire
manufacturing executives to achieve transformational growth for themselves, their companies, and for the industry atlarge through enlightened leadership.

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About

About

About

DDI

The Conference Board

EY

We work side by side with people who arerelentless about identifying and developing
leaders who perform and will leave anenduring legacy. Because better leaderslead to a better future, we’ve been
obsessed with the science and practice ofleadership for nearly five decades. We help
clients uniquely define and achieve great
leadership at every level of theirorganisation, from aspiring leaders all theway to the C-Suite. Our promise remains:
Together, we can co-create a solution
that’s aligned with your business context
and aimed squarely at your business goals.

The Conference Board is a global,
independent business membership andresearch association working in the public
interest. Our mission is unique: To provide
the world’s leading organisations with thepractical knowledge they need to improvetheir performance and better serve society.
The Conference Board is a non-advocacy,
not-for-profit entity holding 501 (c) (3) taxexempt status in the United States.
www.conference-board.org

EY is a global leader in assurance, tax,
transaction and advisory services. The
insights and quality services we deliver help
build trust and confidence in the capital
markets and in economies the world over.
We develop outstanding leaders who team
to deliver on our promises to all of our
stakeholders. In so doing, we play a criticalrole in building a better working world forour people, for our clients and for ourcommunities.

> Strategy> Selection> Development> Succession Management

EY refers to the global organisation, andmay refer to one or more, of the member
firms of Ernst & Young Global Limited, eachof which is a separate legal entity. Ernst &Young Global Limited, a UK company
limited by guarantee, does not provide
services to clients. For more information
about our organisation, please visit ey.com.

www.ddiworld.com© Development Dimensions International, Inc., The Conference Board Inc., EYGM Limited, 2018. All rights reserved.