This is the first part of two on leading organisations during disruptions
2025 was marked by an external environment shifting in sudden, structural jolts. Issues that were once the long-term domain of policymakers and diplomats became immediate and concrete risks for boards and executive teams. This includes AI, geopolitical tensions, geo-economic and supranational fragmentation, and threats to supply security.
A company’s vision and values should usually remain constant during disruptions. Yet the way these are lived in practice often needs adjustment. Governance, leadership, communication and day-to-day follow-up must become more concrete and forward-leaning. Organisational cohesion is typically strained when external parameters shift materially.
For top leadership, however, disruptions also represents a unique opportunity for development; personally, professionally and as leaders. Preparation significantly increases the likelihood of success.
The Risk of Major Disruptions is Elevated
Many of the external conditions shaping business are today undergoing fundamental changes:
- Geopolitical tensions are rising precisely as supranational institutions (e.g., the UN and WTO) face the risk of fragmentation – with consequences for competition, and for geo-economic distribution and redistribution.
- Supply chains, core business models and competitive dynamics are being reshaped by climate change and AI.
- There is a heightened risk of increased borrowing costs and tighter credit conditions. After 45 years of falling interest rates, there is now a material prospect of moderately higher long-term rates of +3–4%.
- This will depress asset valuations and, in turn, collateral strength.
- It increases the likelihood of systemic domino effects among customers, suppliers and competitors, especially financially fragile firms and zero-profit “zombies”.
- It introduces both risks and opportunities for consolidation, whether by the company itself or its competitors. The value of free cash flow rises, often dampening investment appetite.
Most companies have been spared such conditions for 17 years, and …
Since the financial crisis, excluding the unique turbulence of Covid, many corporate and financial systems have not undergone genuine stress tests.
This increases the risk of a loss of managerial “real capital”. A long period of “peace time” means many current executive teams have limited practical experience with deep crisis or transformation leadership. They risk repeating the expensive mistakes of their predecessors.
Over the past months, I have been asked by shareholders and holding structures to assist a rising number of European groups. Many owners are concerned about the risks emerging from today’s shifting environment. Preparation and prevention are safer and more effective than crisis management and turnarounds. Above all, the executive mindset must be ready for discontinuity.
… leadership preparedness may therefore be weakened
It can be useful to view a company as the interplay of three components: the organisation itself, its IP (process knowledge and experience), and its systems and structures (IT, buildings, machinery). The organisation is the fulcrum. It can continue to function, at least for a period, even when the other components do not. This is the essence of crisis leadership: as long as organisational cohesion remains intact, the enterprise remains resilient.
Resilience is built before disruptions occurs. Two elements are decisive:
- Prevention is awareness, scenarios, fallback options and organisational readiness. Many companies today seek awareness through ERM mapping and scenario work. These often reveal gaps in preparedness for risks dismissed as irrelevant for 40 years: e.g., rising rates, de-globalisation and self-sufficiency pressures (supply chain risks).
- Execution is the ability of the executive team to adapt rapidly, not “merely” to decide. Strategies set direction and boundaries, but success is determined in day-to-day execution. Without execution, strategy loses its value.
Disruptions often expose unconscious psychological layers ...
In “peace time”, organisations can function despite latent trust gaps, between leadership and the organisation, or among employees. Over time, these become normalised, masked by reactive behaviour. This subtly, and slowly, erodes corporate dynamism.
During disruptions, the desire to stay in the organisation can quickly erode. Those with options often leave; those without become more reactive. This complicates the operational turnaround to follow. Dynamism cannot be instantly recreated, even after a successful crisis phase with restructuring and cost adjustments.
Trust must thus be assessed and strengthened before disruptions hit
Organisational performance depends primarily on trust: trust in oneself, in colleagues, and in leadership. When the external environment evolves faster than institutional memory, trust must be (re)built through involvement, clarity and decisiveness.
Change management is often described by advisers rather than practitioners. This tends to lead to oversimplified problem descriptions rather than clarified insight. They tend to underestimate the depth and variation of organisational dynamics and instead point to correlations to externalities as reasons for failure or success.
To be continued in the next blog post