Key Factors : Leadership Effectiveness – Preparing for the Challenges Ahead

To understand how business leaders in Portugal are responding to this new era — and what competencies will define success — Odgers conducted a comprehensive study with 87 C-Suite Executives across a broad range of industries. The findings provide a roadmap for Executives who want to stay ahead of the curve. They also shed light on how organisations can invest in leadership development that creates real, long-term value.

Key Factors Impacting Portuguese Companies

When asked which forces are expected to significantly impact their businesses in the coming years, Portuguese Executives prioritised three main themes:

•    Geopolitical instability (55%)
•    Macroeconomic volatility (52%)
•    Artificial intelligence (48%)

All three are global forces that go well beyond the Portuguese economy. This indicates that even in a country like Portugal — whose economy has traditionally been influenced primarily by internal factors — Executives are increasingly focused on global macro issues.
Growing geopolitical tensions are reaching new heights with the current administration in the US. Global trade and military alliances are being questioned and potentially reshaped, which could significantly impact the ability to conduct business across various geographies. The fragility of global supply chains, as experienced during the COVID crisis, is likely to resurface and face further disruption depending on how trade agreements evolve. Macroeconomic volatility remains high, with the potential return of inflation influenced by tariffs and trade barriers. As a result, margins are compressing, forcing organisations to reprice risk and rethink long-term investments. Meanwhile, AI is not only automating tasks — it is redefining business and operating models.

In addition to these primary concerns, other factors such as shifts in consumer behaviour (39%), technological advancements and innovation (32%), environmental changes (28%), and demographic trends (26%) are also expected to significantly influence business strategies.

Confidence Today Doesn’t Guarantee Readiness for Tomorrow

Executives are not standing still in the face of these challenges. Two-thirds of those surveyed consider themselves well prepared for current and upcoming market conditions, and our study reveals several proactive measures already being implemented:

•    Digital Transformation: A significant 79% are driving digital transformation initiatives, reshaping their operating and business models to remain competitive.
•    Risk Management: 56% of organisations are enhancing their risk management frameworks to better prepare for potential disruptions.
•    Workforce Upskilling and Reskilling: 52% are focused on upskilling and reskilling their workforce to meet future demands.
•    Cost Optimisation and Supply Chain Diversification: 74% are optimising costs, and 38% are diversifying their supply chains to build resilience against geopolitical and economic shocks.

Nevertheless, despite this proactivity, Executives also acknowledge that the competencies required for long-term sustainability are changing. Over half admit they feel less prepared to manage the impacts of AI and geopolitical instability.

The Competencies That Will  Define Effective Leadership in the Future 

As leading organisations face growing complexity, Executives must demonstrate a well-developed set of leadership competencies. These include strategic clarity, stakeholder management, people and team development, execution discipline, and resilience. However, our research highlights three core competencies that are becoming especially essential:

•    Adaptability: Leaders must be able to navigate ambiguity and pivot in response to evolving circumstances without resorting to hasty decisions. This is not about reactive firefighting but about proactive sensemaking. It also involves building organisational cultures that tolerate failure, learn rapidly, and course-correct in real time. This competency was identified by 91% of respondents as increasingly relevant.
•    Strategic Clarity: In a world where noise often overwhelms signal, the ability to craft a clear vision and coherent strategy is crucial. While adaptability is important, this must not lead organisations to constantly shift direction. Having a clear north star is vital for maintaining focus on priorities and avoiding distractions. 81% of respondents believe strategic clarity will become more important in the future.
•    People and Team Development: Talent is no longer a support function — it is central to strategy. High-performing leaders identify key roles, develop future leaders, and foster environments where diverse perspectives drive better decisions. This also means knowing when to step back and empower others. This competency was highlighted by 75% of respondents as increasingly critical.

From  Individual Excellence  to  Organisational Capability

Effective leadership today is increasingly distributed. While CEOs remain the face of strategy and transformation, they rely on a growing ecosystem of C-Suite partners to operationalise change. Two roles stand out: Chief People Officers are orchestrating reskilling agendas, fostering inclusive cultures, and redesigning organisations for agility; Chief Technology Officers are no longer back-office enablers — they are shaping digital strategies, integrating AI, and safeguarding against cyber threats.

Beyond that, the CEO needs to understand the key roles that are responsible for the majority of the organisation’s value creation. Those functions need to be filled with A-players; organisations cannot afford second best.

But leadership goes beyond the C-Suite. High-impact organisations treat leadership as an enterprise capability — not a set of traits owned by a few at the top. This means developing talent at three levels:

•    Individual: Do we have the right leaders? Are they being prepared for future challenges?
•    Team: Do we have clarity on how to build cohesive, high-performing teams?
•    Organisation: Do we have a clear understanding of what competencies will be most critical to execute our vision? Do we have the talent management and culture in place to develop the leaders of the future?

This systems-level view is critical. Without it, even the best leaders struggle to scale their impact.

Conclusion 

The Odgers Berndtson Leadership Effectiveness Study underscores the importance of a holistic approach to leadership in an increasingly complex business landscape. This comprehensive analysis provides valuable insights for leaders looking to prepare for the future. By embracing competencies like adaptability, strategic clarity, and team and people development, Executives can position their organisations to thrive amidst uncertainty and change.

At Odgers Berndtson, we work with companies to address these questions and build the leadership engines they need for the future. Whether through executive search, team effectiveness, leadership development, or talent strategy, we help organisations unlock their full potential.

If this study resonates with your challenges — or sparks new questions — we’d welcome a conversation.