Declining leadership confidence: A wake-up call for CEOs

Keywords: rolemodel, confidence, leadership, highperformance, sustainablesuccess

Date: 11 March 2025, WorkLife Digital

The latest Leadership Confidence Index paints a stark picture: leaders’ confidence in their Executive Leadership Teams (ELTs) has fallen to its lowest point since tracking began in 2021. This decline is consistent across capabilities, behaviour, and issue management. External disruptors such as economic uncertainty, geopolitical instability, talent shortages, and rapid technological change have heightened the complexity of leadership roles. But for CEOs and business leaders, these findings underscore the urgent need to rethink leadership strategies and adopt a people-first approach that prioritises collaboration, psychological safety, and mental health mentoring.

The Index indicates that CEOs increasingly feel their teams must undergo significant changes to align capabilities with organisational needs. Strong alignment, trust, and quality discourse within leadership teams are essential for organisational resilience in today’s global market. Yet, less than half of C-level leaders believe their ELTs effectively work as a team or role-model the right culture - a sharp decline in behavioural confidence since 2021.

Addressing the leadership gap: A people-first strategy

To reverse this trend, CEOs must embrace a people-first approach that focuses on developing leaders holistically. This strategy involves fostering psychological safety, investing in mental health mentoring, and ensuring senior leadership teams (SLTs) adopt collaborative practices both with their colleagues and the teams they manage. 

1. Psychological safety: Building trust and encouraging dissent

Psychological safety is the cornerstone of effective leadership. It empowers team members to voice their opinions without fear of retribution - a critical factor for fostering innovation and diversity of thought. CEOs should encourage ELT members to challenge one another constructively, including the CEO themselves. While disagreement can be uncomfortable, it is essential for robust decision-making.

Creating a culture of psychological safety starts with open communication and empathy. Leaders must actively listen to diverse perspectives and demonstrate a willingness to adapt based on feedback. This not only strengthens team dynamics but also ensures that decisions are informed by varied viewpoints.

2. Mental health mentoring: Supporting leaders’ well-being

The pressures of modern leadership can take a toll on mental health. CEOs need to prioritise mental health mentoring as part of their leadership development programs. This involves equipping SLTs with tools to manage stress, build resilience, and support their teams’ emotional well-being.

Empathy plays a pivotal role here. Leaders with high emotional intelligence (EQ) understand what motivates people and can create environments where employees feel valued and supported. By fostering compassion within ELTs, organisations can attract top talent and retain high-performing leaders who thrive under pressure.

3. Collaborative leadership: Breaking down silos

Collaboration is one of the most critical traits for effective leadership teams - but it’s also an area where many ELTs struggle. One in three C-suite leaders strongly doubts their team’s ability to work together effectively. CEOs must prioritise initiatives that strengthen teamwork and adaptability within their leadership ranks.

Drawing inspiration from sports teams can be valuable here; just as successful athletes rely on synergy to win games, business leaders must cultivate mutual trust and shared goals among team members. Empowering SLTs to collaborate freely and removing barriers that hinder progress can transform organisational culture and drive better outcomes.

Investing in next-generation leaders

The Leadership Confidence Index also highlights another pressing issue: next-generation leaders (those one or two levels below the C-suite) report the lowest confidence in ELTs across all leadership levels. Only 30% feel their ELT is effectively reskilling the workforce for future challenges like tech transformation and sustainability.

This scepticism signals deeper issues with connection and engagement between top leadership and emerging leaders. To address this gap, organisations must invest in developing future leaders through mentorship programs, skills training, and opportunities for greater responsibility. By bridging this divide, organisations can ensure preparedness for future challenges while cultivating a pipeline of capable leaders.

Tackling talent shortages through leadership transformation

Talent shortages remain a top concern for business leaders globally; 57% identify it as a key threat, yet only 40% feel prepared to address it effectively. Alarmingly, 95% of CEOs believe employees’ skills need an overhaul—and nearly nine out of ten think their own senior leadership team requires meaningful change.

To close this preparedness gap, CEOs must set clear strategies for reskilling both employees and SLTs. This includes identifying skill gaps within leadership teams and implementing targeted development programs that emphasise adaptability, collaboration, and emotional intelligence. 

Key traits for effective leadership teams

The research highlights three critical traits that CEOs should prioritise when building or transforming ELTs:

By focusing on these traits—and adopting a people-first approach—CEOs can rebuild confidence in their ELTs while driving long-term organisational success.

 

WorkLife Digital is a global mental-wellbeing consultancy driven by the mission to improve the sustainability of businesses. Our psychological wellbeing tool, Worklife Quotient (WL-Q), is modelled on cutting-edge scientific research and provides organisation-wide measurement and intelligence on the mental wellbeing levels and psychological resilience of staff. WL-Q also assesses the impact of organisational practices (i.e. people and culture, leadership styles, organisational purpose and values, social impact) that have a direct influence on staff wellbeing and provides strategic recommendations on addressing risks and promoting strengths.

For more information, get in touch at lisa@worklife.digital

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REFERENCES

https://www.russellreynolds.com/en/insights/reports-surveys/leadership-confidence-index

https://hbr.org/2023/02/what-makes-leadership-development-programs-succeed