Navigating an Increasingly Politicized Business Ecosystem: Spotlight on CEOs

Recent political turmoil continues to amplify leaders’ already heightened sense of uncertainty. With CEO turnover dropping in the second quarter of 2024, top leadership teams are looking for stability and continuity amidst political disruption. With this context in mind—and the expectation that these disruptions will continue—we've identified four data-backed recommendations for CEOs aiming to maintain stability and lead their teams through an increasingly politicized business ecosystem.

CEOs are increasingly concerned about political issues.

CEO concern around geopolitical uncertainty has increased 10p.p. in the past six months – this is the largest increase among a list of 20 external threats.

^{Source: Russell Reynolds Associates Global Leadership Monitor H1 2024; n = 1,138 CEOs}

More than half of CEOs feel they do not have the support and expertise internally to help them navigate political risk.

^{Source: Russell Reynolds Associates Global Leadership Monitor H1 2024; n = 337 CEOs}

Four ways CEOs can lead their organizations to effectively operate in an increasingly politicized business ecosystem:

1. Diversify intelligence channels. Leadership teams that are effectively addressing political risk are twice as likely to say they have established both informal and formal channels of information gathering around managing political risk.

^{Source: Russell Reynolds Associates Global Leadership Monitor H2 2023; n = 760 leaders who believe their leadership teams have the right skills or capabilities to effectively manage political risks impacting their organization; 225 leaders who believe their leadership teams do not have the right skills or capabilities}

2. Engage with employees as critical stakeholders. Employees are among an organization’s most strategic assets; CEOs who encourage informed employee buy-in in decision-making processes and firm commitments are able to effectively navigate political issues and make adjustments for healthy, sustainable business growth.

^{Source: Russell Reynolds Associates H1 2024 Global Leadership Monitor; n=1,089 CEOs}

3. Strengthen cultural leadership skills. Nearly a third (32%) of CEOs are focused on developing new leadership skills to address political issues in the long-term. CEOs need to ensure leaders can productively engage with challenging topics and recognize how the interaction of values and beliefs, team dynamics, and personal and organizational missions come into play across the organization.

^{Source: Russell Reynolds Associates H1 2024 Global Leadership Monitor; n=1,553 CEOs}

4. Prepare intentional strategy adjustments. As the political landscape continues to massively shift, CEOs at organizations which proactively fold a political perspective into strategic considerations are much more likely to report positive impacts than those at organizations that wait to respond (59% vs 14% seeing positive impact). CEOs should be clear on their organizations’ long-term values and stay prepared to adjust how to execute on these values as political winds shift.

^{Source: Russell Reynolds Associates Global Leadership Monitor H1 2024; n = 191 leaders who indicated that their organizations have deliberately addressed a political issue; n = 193 leaders who indicated that their organizations have been unintentionally associated with a political issue by external individuals or institutions.}

Authors

Joy Tan and Tom Handcock of RRA’s Center for Leadership Insight conducted the research and authored this report.

Learn more about the authors and The Center for Leadership Insight