STATE OF THE WORLD 2026: LEADERSHIP WHEN OUTCOMES WIDEN
- Wickett Advisory - Xenia Wickett
- 4 days ago
- 8 min read
STATE OF THE WORLD 2026: LEADERSHIP WHEN OUTCOMES WIDEN
2026 is a hinge year. Not because everything will change at once, but because decisions taken now will lock in trajectories that are difficult to reverse. While the longer-term implications may be profound, this note is focused deliberately on 2026 itself — on how to read, and lead through, it.
The defining feature of the current environment is not uncertainty alone, but the breadth of credible scenarios leaders feel compelled to consider. In my professional memory, the range of conceivable outcomes has never felt wider. This is driven principally by the United States — not only by what its policy choices are, but by how they are implemented — interacting with a world already under strain from war, technological disruption, and institutional weakening.
The leadership challenge that follows is specific and acute. The problem is not a lack of scenarios, but a surplus of them. Wars may expand or stagnate. Institutions may fracture or adapt. Technologies may transform work faster than organisations can absorb — or consolidate more slowly than expected. Actions once considered unthinkable for decades are now at least discussable. Leaders are being asked to hold all of this at once.
At the same time, it is important not to overstate what will actually change on the ground in 2026. For all the noise, many realities will remain stubbornly familiar. Authoritarian systems will persist. Capital will remain cautious. Peace deals may be announced and unravelled without fundamentally altering underlying dynamics. Volatility will be extraordinary — tariffs on and off, rhetoric aggressive, threats credible enough to demand attention — but much of it will be episodic rather than transformative.
This tension creates the central leadership risk of 2026: confusing unpredictability with powerlessness. When everything feels in flux, the temptation is to overreact, hedge everywhere, or defer difficult choices. The task for leaders is not to predict which scenario will prevail. It is to remain disciplined about attention, clear about where agency still exists, and deliberate about the trade-offs they are willing to make. In that context, trust — built through consistency and first-principles decision-making — becomes a durable leadership asset.
What follows is a state-of-the-world assessment intended to help with this.
1. The context: widening scenarios, tightening constraints
The geopolitical context for 2026 is not defined by a single dominant crisis, but by the interaction of several — widening the range of outcomes leaders feel they must hold in mind. The challenge is not necessarily constant disruption, but constant plausibility of disruption.
The United States: volatility as a force multiplier
The United States remains the primary scenario widener in the global system. This is less about ideology than about method: short time horizons, transactional approaches to alliances, and a willingness to test institutional boundaries at home and abroad. Tariffs are imposed and withdrawn. Commitments are questioned, reaffirmed, and questioned again. Rhetoric escalates with enough follow-through to remain credible. It is not the substance of decisions alone, but the speed at which they are made and communicated — days rather than months — that has changed, compressing response time for everyone else.
For leaders elsewhere, the mistake is to treat this as either decisive or irrelevant. US behaviour rarely determines outcomes on its own, but it forces others to plan across a wider range of contingencies. The leadership task is to assume continued volatility without allowing it to dominate attention or distort priorities.
A further implication is indirect but important. When the United States treats long-standing norms and constraints more instrumentally, others are more likely to test where boundaries now lie. This does not make dramatic escalation likely in the near term, but it does widen the range of scenarios leaders can no longer dismiss entirely.
For most actors, however, this volatility is more likely to be absorbed than to prove transformative. The system adapts more often than it breaks. Alliances strain, but rarely disappear. Markets adjust. Institutions weaken formally while coordination re-emerges informally. Trump’s impact this year is therefore best understood less as a system-breaker than as a persistent scenario widener.
Europe and the Russia–Ukraine war: endurance, not resolution
Europe enters 2026 shaped fundamentally by the war in Ukraine. The most likely path remains a grinding conflict: slow Russian pressure, continued Ukrainian resistance, and sustained but politically contested Western support. Escalation risks – including nuclear signalling – remain real.
The key point for leaders is this: the war is unlikely to be decisively resolved in 2026, but it will continue to consume European political bandwidth, defence spending, and strategic focus. This strain is compounded by domestic polarisation, with further gains by right-wing and nationalist parties likely across parts of Europe — narrowing room for manoeuvre on defence, Ukraine, migration, and EU coordination.
At the same time, Europe has adapted more than is often acknowledged. Defence budgets have risen. Coordination has deepened. Coalitions of the willing have compensated where formal mechanisms feel brittle. Even under conditions of continued US uncertainty, the more likely outcome is rebalancing rather than collapse. For European leaders, the challenge is less strategic design than political endurance: sustaining commitment amid domestic polarisation and political fatigue.
China: structural constraint, managed tension
China is still too often analysed in binaries — unstoppable rise or imminent crisis. The reality is more constrained. Structural economic pressures, demographics, and capital controls are real, yet the state retains significant capacity to direct resources, shape technology ecosystems, and influence global supply chains.
For leaders in 2026, China represents a persistent judgement problem rather than a decisive break point. Selective decoupling will continue alongside deep interdependence, particularly in technology, energy, and critical materials. One consequence is the continued diversion of Chinese industrial overcapacity into Europe and parts of Asia rather than the US — already flooding some markets and likely to provoke sharper political and trade pushback this year.
China’s key advantage lies in execution speed and scale — particularly in renewables, EVs, and adjacent supply chains — areas where others remain politically divided and slower to act.
The Middle East: constrained volatility
Gaza will continue to generate acute humanitarian and political pressure in 2026, but it is unlikely to determine the region’s broader trajectory this year. The more consequential dynamic lies in how regional powers balance instability against economic and domestic constraints.
Saudi Arabia is central to this balance. With lower oil prices and tighter fiscal discipline, economic transformation and domestic stability are prioritised over regional escalation, even as frictions with the UAE persist and alignments remain fluid.
Iran remains the principal downside risk. While incentives still favour restraint, leadership uncertainty and proxy dynamics increase the risk of miscalculation, making episodic shocks more likely.
The leadership mistake is to read each spike in tension as evidence of imminent regional rupture. The more likely pattern in 2026 is contained volatility.
Climate, energy, and technology: structural constraint
Climate and energy have moved from moral imperatives to geopolitical mandates. Extreme weather, insurance withdrawal, and infrastructure strain now shape state and corporate behaviour more decisively than aspiration. Investment in renewables continues, but unevenly, as reliability, resilience, and autonomy take precedence.
Technology — particularly AI — sits inside this constraint. A small number of firms and states will continue to attract capital and scale. Many others will fall away as energy demand, infrastructure limits, and capital discipline assert themselves. This is not retreat; it is consolidation.
How to read this context in practice
In 2026, leaders should overweight three dynamics:
• US-driven volatility as a scenario widener rather than a determinant;
• The persistence of the Russia–Ukraine war as a drain on European bandwidth; and
• Energy and infrastructure constraint as the silent limiter on technological and climate ambition.
Other risks — including Middle Eastern escalation and sharper China–US confrontation — merit close monitoring but are more likely to produce episodic shocks than structural change this year.
2. What this context is doing to people and organisations
If the geopolitical environment is characterised by wider imagined outcomes, the human response is a search for agency. A persistent sense of economic, political, and technological insecurity is shaping behaviour at every level.
Time horizons are shortening. Leaders and organisations favour moves that preserve optionality, even when clarity and commitment would be more stabilising. Decisions become provisional. Trade-offs are postponed rather than named — not because options are absent, but because committing under uncertainty feels uncomfortable.
Trust is becoming scarcer — and therefore more valuable. As shared narratives weaken and misinformation rises, people rely more heavily on known relationships and familiar in-groups. Smaller, more reliable circles feel safer than broad alignment, but they also reduce coordination and increase fragmentation. Declining trust in governments and large institutions reinforces this turn towards self-reliance and tribe-based belonging.
As pressure to choose sides intensifies, many actors are deliberately resisting binary alignment. Coalitions of the willing are no longer a workaround; they are becoming the default mode of action — geopolitically, organisationally, and increasingly at the individual level. They work precisely because trust is scarce elsewhere: they substitute reliability for formal alignment. People are assembling purpose-driven networks, choosing collaborators over institutions, and prioritising reliability over scale.
This environment is also producing divergence at the individual level. Rising insecurity leads some to hunker down, while others become more willing to move — changing roles, pursuing short-term opportunities, or stepping outside traditional career paths. Experimentation increases even as loneliness and self-sufficiency rise in parallel.
A note on divergence: These behavioural responses are not evenly distributed. Some leaders and organisations clarify priorities, invest selectively, and act deliberately despite uncertainty; others hedge everywhere, defer decisions, and quietly lose ground. Economists describe this kind of split as a K-curve — and in 2026 it applies as much to organisations and careers as to economies.
None of this is irrational. It is a rational response to a world that feels less predictable and less safe. But it carries costs: fragmentation, under-investment in trust, avoidance of difficult trade-offs, and a tendency to confuse motion with progress. The difference is rarely access to information. It is judgement — about where agency still exists, and the willingness to use it.
3. What this means for leadership in 2026
The central leadership challenge of 2026 is not navigating volatility, but avoiding the confusion of unpredictability with powerlessness. Faced with a widening range of scenarios, many leaders will delay decisions, preserve optionality, and react to noise. That may feel prudent. In practice, it will be costly.
In a noisy environment, leaders will ultimately be judged less on individual decisions than on whether they remained anchored to clear first principles. Small choices compound quickly when outcomes are diverging. Responding to every provocation or soundbite may feel adaptive in the moment, but it erodes trust over time. Consistency, not reactivity, is what creates room to manoeuvre.
Trust will be a differentiator. As coordination shifts away from institutions towards coalitions and in-groups, reliability will matter more than scale. Leaders who are disciplined about attention, explicit about trade-offs, and deliberate about where they still have agency will outperform those who hedge everywhere and commit nowhere.
This is not a year for waiting for clarity. It is a year for orientation: knowing what matters, what does not, and how you will act while multiple futures remain possible.
Xenia
Wickett Advisory
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