Most corporate leaders are failing to cope with the demands of modern, fragmented workplaces, and the consequences for performance, engagement and wellbeing are becoming impossible to ignore.
A major new report from Seattle-based global research firm the Institute for Corporate Productivity (i4cp), based on a global survey of over 800 professionals and more than 200 executive interviews and shared exclusively with HRreview ahead of publication, finds that just 19% of leaders are viewed as “very effective” at managing distributed work.
The rest are either struggling or overwhelmed. Distributed work, as defined in the report, includes remote and hybrid arrangements but also extends to teams spread across time zones, business units, cultures and areas of expertise.
Leadership under strain
Leadership burnout is cited as a growing concern. One study referenced in the report found that 72% of leaders feel “used up” by the end of the day, while only 15% believe they are equipped to prevent burnout on their teams. The study suggests that the fractured nature of work, combined with outdated leadership approaches, is driving a steep decline in effectiveness.
“Too often, these tools reveal the nature of leaders’ problems through the lens of the solutions we have in hand — a new leadership imperative, collaborative technology or a mandate such as return to office,” the report says. “And this inevitably results in actions that solve some problems, make some worse, and leave an array of leaders’ challenges unresolved.”
The report, Leading from Anywhere: Driving Results in the Age of Distributed Work, argues that performance improves dramatically when leaders focus on six core areas: team culture, structure, talent development, wellbeing, stakeholder management and technology use. Organisations that support this kind of targeted, context-specific leadership are six times more likely to rate their leaders as highly effective.
Culture was identified as the single most powerful factor. Leaders who foster dependable, trust-based team norms can lift performance by as much as 34%, the study found. This matters especially where teams are scattered, asynchronous or working across functions.
But just promoting flexibility or adding wellbeing apps isn’t enough. That’s because high-performing leaders, the report notes, use structured one-on-ones, onboard people into key networks and actively shape peer dynamics to strengthen trust and engagement.
Underperformance a fixable problem
Another striking finding is that the fastest route to performance gains is not accelerating top talent but lifting the worst-performing leaders to a basic standard. Improving bottom-quartile leaders can boost productivity by 32% and increase engagement by a third. Yet these individuals are often overlooked in leadership programmes.
Many fall into recognisable patterns. The report identifies four underperforming archetypes: the Chess Master, who micromanages; the Turtle, who avoids conflict; the Firefighter, who focuses only on execution; and the Marshmallow, who lacks direction.
In each case, performance improved not just through behaviour change but by adjusting the leader’s environment, such as setting clearer priorities or sharing stakeholder responsibilities across the team.
Distributed leadership, not just delegated work
The report says that sustainable leadership in distributed environments depends on distributing leadership itself, not just delegating tasks. High-performing teams are those where responsibilities such as engagement, wellbeing and collaboration are shared across team members, reducing bottlenecks and freeing leaders to focus on strategic decisions.
These challenges are about to get more complex. The report highlights the rapid rise of “agentic AI” — autonomous systems that can make decisions and carry out work, often alongside human employees. Most organisations are unprepared. Only 23% of respondents said their leaders were equipped to manage AI agents within teams, despite the technology already being deployed in some workflows.
Salesforce CEO Marc Benioff is quoted in the report as saying at the 2025 World Economic Forum that today’s executives may be “the last who will manage a workforce of only human beings.” Microsoft has predicted that AI agents will soon be viewed as full team members, fundamentally altering leadership roles. “All of us going forward are going to manage humans and agents together,” said Benioff.
Time for HR to intervene
The i4cp report urges HR leaders to act now, with four clear priorities: tailor support to each leader’s needs, balance people and performance metrics, raise the floor for struggling leaders and embed leadership responsibilities across teams. It’s not about doing more with less, it argues, but about leading differently.
Without urgent change, the leadership crisis is likely to deepen, leaving already exhausted leaders further adrift, and organisations falling behind.
