How to Lead Through Complexity
Every year, the world’s preeminent leadership advisory firm, Egon Zehnder, conducts a survey among CEOs to identify issues and challenges they face and how they deal with them. In this podcast, we highlight key findings and discuss the implications for CEOs and Nomination Committees challenged to align on the search criteria for CEOs.
In this podcast, Dr Sabine Dembkowski, Founder and Managing Partner of Better Boards, discusses how to lead through complexity with Dr Nadine Rinck, a partner in Egon Zehnder’s Munich office. She heads Egon Zehnder’s infrastructure sector in EMEA and focuses on board advisory and CEO succession across sectors. As a former lawyer, she has extensive expertise in governance issues, making her a sought-after advisor on the effectiveness of leadership bodies and the structure and governance of organisations.
“95% of the CEOs expect groundbreaking systemic changes in the next decade”
Nadine shares insights from a global study conducted with 500 CEOs across sectors, shedding light on what is dominating their thoughts and strategies. An overwhelming 95% anticipated groundbreaking systemic changes in the next decade, a shared expectation of the unprecedented complexity facing businesses today. This stems from the sheer scale and interconnectedness of simultaneous unprecedented changes creating a challenging environment for leadership.
The top five critical challenges CEOs cited were talent acquisition and development, AI adoption and impact, market disruptions, geopolitical instability and climate change/ecological impact. Nadine highlights that these challenges are not isolated, and their interconnected nature makes them even more difficult to navigate, requiring CEOs to adopt innovative, flexible, and forward-thinking approaches.
“The world is currently moving from complicated to complex”
Nadine explains that the world is shifting from being merely complicated to truly complex, which has profound implications for leadership – and complexity introduces challenges for which no clear solution exists, no matter how much effort or money is invested. This shift brings heightened uncertainty and often fear among teams and stakeholders, and this new reality is reshaping the role of the CEO. In the past, leadership styles focused heavily on CEOs collaborating, influencing, coaching, coordinating and motivating their team. While these traits remain essential, Nadine observes a growing need for leaders who provide more substantial guidance and explicit direction, as today’s CEOs are increasingly expected to act as compasses for their organisations, steering them through uncertainty and helping their teams navigate uncharted territory. This balance between collaboration and decisive leadership is becoming critical as complexity demands both adaptability and a steady hand.
“What can I do to make my CEO become better and support him or her in navigating this complexity?”
Nadine emphasises that navigating complexity does not mean CEOs must solve every problem themselves or adopt a hierarchical approach. Instead, CEOs are turning to specific sources for advice and support when tackling complex challenges. In a recent study, 63% of CEOs reported drawing on their peers and executive leadership teams for input. However, the results revealed a surprising gap in how often CEOs engage independent board members or chairs for guidance. Only 17% consult their independent board members and just 13% turn to their chairs for advice. For Nadine, these figures highlight a significant opportunity for boards to redefine their roles, and she advocates boards stepping into more active advisory positions, serving as sparring partners to their CEOs, shifting from traditional oversight to a more collaborative approach, helping CEOs navigate complexity and improve their leadership. During the COVID-19 pandemic, many boards and executive teams worked more pragmatically and collaboratively, creating stronger advisory relationships, which Nadine sees as a model for the future (with room for improvement). Boards must ask themselves how they can better support their CEOs, fostering an environment where leaders can confidently address the challenges of today’s business landscape.
“Leaders will need to develop adaptive abilities”
Nadine acknowledges that tackling today’s challenges requires a fundamental shift – a complete update of the “operating system” of leadership. For future CEOs, this means transforming their leadership identity and focusing on emotional intelligence and personal growth – difficult but essential for busy CEOs. She outlines three meta-competencies that form the foundation for adaptive leadership.
The first is self-awareness, which requires the ability to self-reflect and be brutally honest with oneself. She notes that this can be particularly challenging for CEOs, who often lack access to honest feedback in their professional lives. Workplace dynamics usually insulate them from such input, making self-awareness a rare but crucial trait and coaches or sparring partners invaluable.
The second meta-competency is relational capability, which includes building trust, forming networks, and genuinely connecting with others. Nadine emphasises that modern leadership increasingly values approachability, authenticity, empathy, active listening, and even showing vulnerability, qualities that humanise leaders and strengthen their influence.
The third meta-competency she describes is adaptability, which requires leaders to let go of outdated beliefs and unlearn no longer beneficial behaviours or strategies. This process can be challenging, as it involves shedding deeply ingrained habits and patterns formed over years of experience, but Nadine emphasises that unlearning is as important as learning. Leaders create space for new ideas, approaches, and perspectives by releasing what is no longer relevant. Adaptability also demands a mindset that actively embraces change, which Nadine feels is the cornerstone of leadership in a world where change is inevitable and relentless.
“Take people out of their comfort zones and see them in different settings and environments”
Nadine emphasises that while a candidate’s CV and experience remain critical, boards (and particularly nomination committees) must go beyond traditional criteria to understand behaviours and personalities for internal talent and CEO succession pipelines, building relationships with potential candidates much earlier in their careers, long before the formal selection process begins. Committees should create regular touchpoints, meet candidates at events, or even organise special gatherings to observe how they operate in different settings. These interactions provide valuable data points, helping boards capture a more comprehensive view of a candidate’s personality and leadership style.
For external candidates, Nadine highlights the importance of probing beyond technical skills and experience with psychometric tests, references, and simulated workshops for insight into how candidates behave under pressure and taking them out of their comfort zones to observe their genuine reactions in unfamiliar scenarios. She believes these methods are vital for understanding not just a candidate’s competencies but also their adaptability, emotional intelligence and ability to build trust, as the search for future leaders is no longer about identifying a specific skill or competency.
Instead, the focus has shifted to uncovering a candidate’s potential and capacity to grow and adapt in the face of future challenges. At Egon Zehnder, this potential is assessed through a framework built on four key dimensions: curiosity, insight, engagement, and determination. Nadine highlights curiosity as the most critical, as it will set the most impactful leaders apart, and by prioritising curiosity alongside the broader dimensions of potential, boards and nomination committees can identify candidates who are capable today but prepared to navigate the complexities of tomorrow.
The three top takeaways for effective boards from our conversation are:
- Self-awareness
- Relational capabilities
- Adaptability
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