Study finds CEOs reluctant to lead workforce transformation

A recent study by Orgvue revealed a significant divergence in attitudes among CEOs and the wider C-suite regarding workforce transformation, with many CEOs showing reluctance to embark on such projects.

The research conducted by Orgvue, which surveyed 700 senior decision makers from organisations with more than 1,000 employees, found that two in five CEOs would prefer to quit rather than lead a large-scale workforce transformation.

As the tech industry continues to face layoffs, the willingness of only 29% of CEOs to fully engage in major restructuring efforts is a point of concern. According to the study, the main barriers faced by CEOs during business transformations include a lack of shared vision (35%), executive resistance to change (30%), and the leadership's resistance or inability to "do the hard thing" (29%).

The research also highlights a disconnect in the C-suite, with 24% attributing unsuccessful workplace transformations to poor communication between senior management.

CEO of Orgvue, Oliver Shaw, reflected on these findings stating, "Our research suggests that transformation fatigue has the C-suite in its grip. We think this is for two reasons: only 23% of transformation projects succeed; and many organizations are forced into crisis-response or event-based transformations."

He further remarked, "Organisations are taking the wrong approach to transformation, creating anxiety around these large, arduous, risky projects that invariably don't return the cost savings they promise. Encouragingly, the research shows there's a cohort of CEOs that see transformation in a different way and they're more willing to lead major restructuring programs as a result. They see transformation as a continuous, iterative process that takes the pain out of organisational change and makes it more sustainable."

Additionally, the study found that 60% of senior decision makers believe that decisions regarding workforce transformation are driven more by human emotions than rational analysis.

Cost reduction remains a significant concern for C-Suite leaders, with 63% citing it as the primary motive for transformation. Seventy-four per cent of respondents expressed willingness to undergo transformation for this reason, and 64% of CEOs indicated they would rather implement layoffs than miss earnings targets.

The research identifies two distinct groups of CEOs with opposing views on transformation: "Conservative CEOs," who are more resistant to change, and "Agile CEOs," who embrace transformation and prefer continuous organisational change over disruptive projects. Of the latter, 97% expressed willingness to lead major restructuring initiatives.

This research presents a complex picture of transformation leadership within the global business sphere, suggesting that organisational approaches to transformation may need reconsideration to address the concerns raised by the C-suite executives.