01. Leaders are feeling increasingly less prepared to face tech change

At a time when generative AI has dominated the leadership landscape, it’s unsurprising that 54% of leaders identified technological change—AI, machine learning, big data, robotics, IoT, and 3D printing—as a top five threat to organizational health. And given the rapid, ongoing AI market changes, as well as the onslaught of cascading information that follows, leaders feel increasingly less prepared to face this threat. In the last six months alone, there has been a seven-percentage point decrease in leadership preparedness to 47%, and since the second half of 2022, there has been a 16-percentage point decline. 

However, leadership preparedness varies considerably by region. In Asia, leaders feel more prepared to face the threat of tech change than those in Oceania, at 55% and 41%, respectively. Less than half of the leaders we surveyed in the Americas (46%) and Europe (48%) feel prepared to deal with technological change.

The global decline in leadership preparedness reflects the growing complexity and pace of technological innovation, demanding that leaders not only keep pace with new developments, but also strategically integrate them into their business models. The pervasive nature of this challenge is further illustrated by the fact that 93% of CEOs and C-suite leaders acknowledge the need for some or a complete change in the technology at their organization.

02. Leaders continue to be concerned about the availability of talent and skills

The availability of key talent and skills is a significant concern for leaders, with 57% identifying it as a top five threat. Even though it has consistently ranked as a top five threat since 2021, a troubling leadership preparedness gap is still evident, with only 40% of leaders feeling ready to address this concern. 

Leaders are not only concerned by the availability of talent, but also by whether the talent they have is equipped to face what’s next. Our research shows that an overwhelming 95% of CEOs and C-suite leaders feel that their employees’ skills need a partial or complete overhaul.

The most noteworthy group that leaders flagged as needing a skills transformation? Senior leaders themselves. A staggering 89% of global CEOs and C-suite leaders felt that their own senior leadership team needs to meaningfully change, and roughly one in five global leaders think a complete change is needed at the senior leadership team level.

The continued decline in preparedness to address talent and skills shortages (despite this being a consistent threat), combined with the emerging necessity for skills overhaul, shows an urgent need for leaders to set strategy addressing this issue. 

03. Workforce transformation emerges as a top five threat for leaders

In its debut on our external threats list, workforce transformation—the emergence or decline of new jobs, reskilling, shifting expectations of work, and new models of employment—is already a top five leadership concern. Despite 42% of leaders ranking workforce transformation as a critical threat to organizational health, only 38% of leaders feel prepared to face this risk, making it the top five threat that leaders feel least prepared to address. 

When we asked leaders for the primary reason their workforce needs to transform, technology was the number one answer, followed closely by cost and profitability. 

CEOs are more confident than C-suite leaders—59% compared to 45%—in their organization’s ability to transform their workforce to meet changing needs. To navigate this transformative period successfully, fostering a culture of continuous learning, flexibility, and innovation will be crucial.

04. Regulatory challenges remain high on the leadership agenda, and leaders’ previously high preparedness levels dip   

While increased regulation has consistently ranked within the top 10 most cited threats for leaders, it surged into the top five in the second half of 2024, with 40% of leaders selecting it as a major concern. The financial services sector is particularly focused on this issue, with 58% of its leaders identifying increased regulation as a top threat. And leaders’ preparedness to face this concern has dropped to 54%—an 11-percentage point decline within the past year. As the regulatory environment continues to shift, businesses must prioritize agility and proactive compliance strategies to stay ahead of the curve and mitigate potential risks. 

05. Leadership preparedness to address economic uncertainty continues to fall

Economic uncertainty remains the highest-ranked ranked threat impacting organizational health over the coming year, with 59% of global leaders selecting it as a top five threat. Despite its perennial status as a top five threat since we began tracking this data in the first half of 2021, leaders’ preparedness to face this issue remains low at 41%. This stark reality underscores the need for strategies that incorporate comprehensive risk assessments and built-in flexibility to adapt to market changes.

This is particularly true among leaders in the professional services and consumer sectors, with 70% and 68% of leaders, respectively, identifying economic uncertainty as a critical business challenge.