FleishmanHillard has published "Licence To Lead: A Leadership Playbook for an Uncertain Era," a global study that features the opinions of 1,550 business and political leaders and 4,000 engaged consumers, which are proactive individuals who have recently taken multiple tangible actions related to a company’s values and reputation. The findings paint a picture of shifting corporate expectations and reputation, and highlight the need for companies to acquire the license to lead.
Licence to lead
The report found that the compounded experience of political volatility, geopolitical shifts, technological acceleration, media fragmentation, and heightened stakeholder scrutiny has created an environment where leaders must make high-stakes decisions faster, with less information and certainty, and under greater public exposure than at any point in recent history.
It indicated that the central challenge facing organisations has gone beyond identifying the right strategy to securing the "license to lead", which is defined as securing the permission to execute when the strategy must be bolder, move faster, or pivot and evolve. Organisations with such infrastructure do not avoid volatility but instead, move through it with less friction, while others stall under resistance and scepticism.
As defined by the study, a company’s licence to lead notes the degree to which employees, regulators, investors, customers, and communities are willing to accept disruption, absorb short-term pain, and grant leaders the room to act - even when outcomes are uncertain. It found that what differentiates high-performing organisations is not whether they change course or achieve their goals, but whether they retain stakeholder support while doing so.
Securing stakeholder confidence
A key finding from the report showed that corporate credibility has become highly fragile: 98 per cent of engaged consumers say they are paying attention to corporate follow-through. 48 per cent say that inconsistent or conflicting messages from company leadership greatly decrease their confidence, which could result in a loss of spending.
84 per cent of engaged consumers and 82 per cent of policy stakeholders agree that the current business environment is more unpredictable and disruptive than three years ago, and the ability to adapt quickly to change ranked highest as the quality that'd allow leaders to succeed over the next decade.
Over 90 per cent of engaged consumers reported that the key criteria to building confidence in a company's leadership include communicating strategy in clear, straightforward terms; consistent messaging about company goals; transparency behind difficult decisions; and genuine engagement with stakeholders.
92 per cent of engaged consumers said that a company with a strong, positive reputation has more permission to undertake a major business transformation, while 85 per cent of engaged consumers are likely to give a company they respect the benefit of the doubt in the event of a crisis or mistake.
Out with grand purpose and vision statements that don't measure up
When asked to determine the “right to lead” during periods of change, engaged consumers ranked demonstrated ethical behaviour (24 per cent) and clear and consistent communication (21 per cent) the highest.
In terms of confidence-building behaviours from leaders, 76 per cent ranked displaying integrity as very important, with accountability following at 74 per cent and raw competence at 66 per cent.
The leader-stakeholder confidence gap
The study highlighted a major perception gap between how leaders think they're doing versus how stakeholders grade them.
While a percentage of executives say they see business leaders displaying integrity and honesty (44 per cent) and accountability (40 per cent), engaged consumers ranked leadership performance at lower rates of 23per cent and 22 per cent, respectively. 19 per cent have indicated a lot of confidence that corporate leaders will act in the best interests of society, and 15 per cent believed companies are very prepared to navigate uncertainty and disruption.
Building a license to lead
Key suggestions from the study include:
- Earn permission through engagement, not declaration. Stakeholders grant permission when they can see their concerns reflected in how decisions were made and how human impact is handled.
- High-performing leaders can focus on answering three questions: Where are we going? Why now? What principles guide us? Leaders can better act with confidence by framing external complexity into simple, clear leadership implications.
- Instead of assuming that stakeholders habitually follow corporate news, companies should ensure communications result in a consistent audience takeaway. However, data also shows that stakeholders are savvy to the big picture and don’t want to feel gaslit by leaders about decisions, reasons or implications.
- Corporate affairs should operate as an integrated leadership infrastructure that works to simplify complex messages and build reputational capital through stakeholder buy-in. Leaders can rely on the function to provide insight, influence, and adaptability.
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