It’s been a big 2023, and most of the leadership teams we’ve been working with lately seem even more tired than usual at the end of the year. It's understandable - we emerge from the pandemic expecting to feel relief, but instead we notice the next cloud coming towards us.
As we approach 2024, challenges and opportunities gather on the horizon, and the big trend we notice from the leaders we work with is that they are determined not to stand still. Organisational transformation is being talked about widely – and we agree it will be the predominant focus of leaders into the new year.
Here are the 2024 leadership trends as we see them – and why they make organisational transformation critical.
1. Technological disruption: the continued march of AI
The rapid pace of technological advancement continues to make waves in the Australian business landscape. In 2024, leaders can expect to grapple with the continued integration and regulation of emerging technologies such as artificial intelligence (AI), blockchain, and augmented reality into their business models.
The actors’ strike in 2023 showed us just how wary workers are of the march of AI on traditional roles. Increasingly as consumers we are also interacting with robots whether we realise it or not.
Many of our clients are already acutely aware of their need for digital transformation, which will require leaders to navigate the nuances of implementing cutting-edge technologies while ensuring a seamless transition for their staff and customers, all while running and growing business as usual. AI is not for everything – but those organisations who shun it are being left behind.
Opportunity lies in the ability to leverage technology to make data-driven decisions, and to make lives easier for people – your customers and your staff. Enhanced productivity and an innovative edge over the competition await those leaders who are willing to pioneer new digital approaches in 2024.
2. Cybersecurity: more attacks, more often
With the rise of digitisation comes an amplified risk of cyber threats, and leaders in Australia must expect a continued uptick in cyber attacks throughout 2024. This year, attacks at Medibank, Optus, HWL Ebsworth, as well as numerous health services and government departments, continued to expose customers to identity theft and leaders to business risk.
From ransomware attacks to data breaches, the challenges require leaders to both invest in robust cybersecurity measures to stay ahead of potential threats, and have playbooks in place to respond once an attack occurs.
The opportunity lies in adopting a proactive approach to cybersecurity, integrating it into the fabric of organisational culture. Leaders who prioritise cybersecurity as a fundamental aspect of their business risk management will not only protect sensitive information but also build trust with their stakeholders.
Of course, government also plays a role, and the Australian Government’s new Cybersecurity Strategy launched in late 2023 will see an increased focus across many sectors in updating our national preparedness.
3. Remote work evolution: hybrid is not going away
The remote work revolution, influenced by the global pandemic and the advances in communication technologies, has made a lasting impact in Australia. However, leaders will face the challenge of refining and optimizing remote work structures to ensure sustained productivity and employee well-being.
Striking the right balance between flexibility and structure will be key in maintaining a motivated and cohesive team, especially in the Australian work culture.
We’ve noticed organisations increasingly wanting to encourage more presence in the office for their teams than last year – because communication and disengagement are significant challenges for leaders managing hybrid teams. Staff, however, continue to want the option to work remotely and are willing to move roles to achieve that.
Hybrid work patterns have not adequately matured and stablised over the past three years. Leaders need to adjust their thinking and establish long-term hybrid work cultures that meet the needs of both the business and the employee. (Incidentally, if you need help with this, please reach out for assistance).
In our view, creating supportive remote work patterns and addressing the very real challenges of employee isolation and fragmented team cultures, will be the big focus for leaders in this space in 2024.
4. Volatile climate: the imperative for action
2023 has seen many climate records break – the world’s oceans are at their hottest on record. Antarctic ice is at its lowest level. Greenhouse gas levels are at a record high, as are global temperatures, and the rate of sea level rise. Locally, we have seen the early advent of bushfire alongside severe cyclones and flooding.
As the world confronts these realities of climate change, Australian leaders can expect increased community pressure to adopt sustainable business practices. Renewable energy transition, waste reduction management, and increased environmental reporting will continue to be in focus as the push towards carbon neutrality gathers momentum.
Leaders will need to navigate the complexities of incorporating eco-friendly initiatives into their operations, supply chains, and product lifecycles, taking into account Australia's unique environmental challenges. Business continuity plans will be increasingly important for those Australian organisations operating in areas at risk of fire and flood.
5. The cost of doing business: sensible debt and cost control
The pause in the inflationary trend, welcome as it is, has not translated into reduced costs for any businesses we are working with.
The cost of labour and supplies continues to place a strain on the operational budgets of businesses across industries in Australia. Collectively we are all getting used to sustained higher (or more normalised) interest rates. This will continue to impact borrowing costs, capital expenditures, and organisational financial strategy in 2024.
Leaders will be carefully reassessing their financial structures, optimising debt portfolios, reducing debt-financed capital spend, and exploring alternative financing. The reassessment of cost structures, efficient resource allocation strategies, and innovative ways to maintain profitability without compromising on the quality of products or services, will be key. An increased focus on procurement risk and contract negotiation would also be sensible throughout 2024.
6. Political risk and opportunity: a mixed outlook
As China continues to moderate its relationship with Australia and reduce tariffs, the US continues to look inwards as it contends with internal political uncertainty as the 2024 Presidential election approaches. China may be an opportunity, but conversely Trump is a risk.
Closer to home, the new conservative coalition government in New Zealand is likely to shake up the operating environment for Australian businesses working across the ditch. By the end of 2024, the Australian Government will be well and truly in election mode as they move towards the final months of the 47th parliament.
With five Australian states and territories changing Premiers this year, there is the opportunity for Australian business leaders to pursue fresh policy agendas with government. Several of our clients are discussing how they might better liaise with government and help to influence the public debate as 2024 progresses.
7. Diversity, Equity, and Inclusion: bringing in fresh perspectives
In 2024, leaders in Australia will notice an increased emphasis on diversity, equity, and inclusion (DEI) as a fundamental component of organisational success. Stakeholders, including employees, customers, and investors, are holding leaders accountable for fostering diverse and inclusive workplaces. The challenge lies in going beyond superficial measures and implementing policies and practices that address systemic inequalities within the Australian business landscape.
Opportunities arise for leaders who champion DEI initiatives, recognising the diverse perspectives and talents that contribute to innovation and business growth.
Several of our clients are looking at how to recruit more diverse perspectives to their boards and leadership teams, in order to stimulate better decision-making and to better match the demographics of the communities they work with.
Central to this work will be a consideration of how the needs and perspectives of First Nations people are listened to in light of the defeat of the Voice referendum in 2023.
2024: a year to accelerate transformation
As leaders step into 2024, they as usual face a landscape filled with challenges and opportunities, uniquely shaped by the Australian context. The trends outlined above underscore the continued importance of adaptability, innovation, and agility.
In this scenario, leaders who can fast-track organisational transformation will be better positioned. That means embracing digital technology and AI, optimising and stabilising remote work structures for long-term hybrid, fortifying cybersecurity, controlling costs and managing debt, championing diversity, being alert to political uncertainty, and positioning organisations for energy transition and environmental sustainability.
By navigating disruptions and opportunity, leaders can position their organisations for sustained success in the year ahead.
The journey may be challenging – but the rewards for visionary leadership are boundless as we face 2024 and beyond.
We wish all of our clients a very Merry Christmas and a prosperous 2024.
Comments