If 2025 was the year of AI experimentation and board level caution amid economic shocks and uncertainty, 2026 will be the year for value creation and accountability.
As organisations enter 2026, business leaders are making decisions against a backdrop of persistent volatility and structural change rather than short-term disruption. Traditional planning horizons are shortening, competitive advantages are eroding faster, and the margin for strategic missteps is narrowing. Executives have moved from responding to change to anticipating it and positioning their organisations to adapt faster than competitors.
Meanwhile, we are only just beginning to understand the capabilities of large-scale global AI adoption and the foundational work required from organisational leadership. Adoption has been uneven and returns inconsistent. Despite deep expertise and a strong innovation heritage, official data showed only around 23% of UK businesses using AI by late 2025, with uptake heavily skewed toward larger firms.
In this environment, strategic leadership in 2026 is defined less by having all the answers and more by setting clear direction, making disciplined choices and enabling organisations to learn and adapt at pace.
Here, we examine five executive leadership priorities we are working on with many of our clients as they build resilient and responsible organisations capable of competitive and sustainable growth in 2026 and beyond.
The transition from 2025 to 2026 marks a decisive shift from experimentation to execution. While 2025 saw organisations race to adopt AI as a competitive imperative, much activity remained trapped in pilots, with leaders struggling to quantify meaningful returns. Research found that 71% of global CEOs and 78% of senior executives believe AI will enhance their value as leaders over the next three years, yet almost 90% report they are not delivering clear customer value from AI today.
UK businesses spent an average of almost £16 million on AI last year, with spending projected to rise by 40% over the next two years. The average UK business currently realises returns of 17% from AI investments, forecast to rise to 32% by 2027. However, investment levels remain well behind China and the US, reinforcing the importance of disciplined prioritisation and architectural redesign rather than indiscriminate adoption into incompatible legacy systems.
The leadership challenge now is intelligent execution. Integrating generative and agentic AI into products, operations and decision-making requires redesigning workflows, strengthening governance and aligning investment to measurable outcomes such as revenue growth, customer experience and operational resilience. Mobilising technology as a strategic asset demands more than purchasing platforms. It requires rethinking how work gets done, tracking model decisions and risk outcomes and tying AI investment to business performance.
Enterprises are moving beyond isolated automation tools toward AI-native processes designed to deliver real-time decision support, autonomous workflows and embedded intelligence across functions. This marks a shift from AI as assistant to AI as operator of core workflows.
Technology alone, however, is not a differentiator. Organisations that fail to align digital investment with governance, culture and leadership capability risk amplifying complexity rather than unlocking value.
The UK also faces a persistent AI skills gap that constrains productivity and slows the scaling of successful pilots into enterprise-wide deployments. Many organisations continue to look externally for scarce talent while underinvesting in internal reskilling, even as roles are displaced by automation. This approach increases cost and disruption while limiting long-term returns.
The risk environment confronting leaders in 2026 is broader, faster-moving and more interconnected than ever. Financial risk is inseparable from cultural, operational, technological and reputational exposure. AI opportunities come with profound challenges. Without robust governance, security and human oversight, autonomous systems expose organisations to significant risk, particularly in customer-facing and high-stakes domains.
By the end of 2026, predictions suggest more than 2,000 legal claims linked to AI-driven failures caused by opaque systems and insufficient guardrails. These warnings underline the urgency for boards, technology providers and governments to take shared responsibility for how AI is deployed.
Geopolitical fragmentation is reshaping cloud strategies, supply chains and data sovereignty decisions. By 2030, more than 75% of European and Middle Eastern enterprises are expected to relocate workloads from global public clouds into local or regional solutions to reduce geopolitical risk, up from less than 5% in 2025.
Human factors compound these risks. Research shows that when AI presents confident recommendations, people tend to defer to them, even when flawed. As AI makes poor information look credible, distinguishing expertise from illusion becomes harder. Shadow AI presents an immediate governance challenge. Sixty-eight percent of UK organisations report employees using unapproved AI tools, with many already experiencing data exposure or security vulnerabilities.
Cyber risk remains a board-level concern. Three quarters of boards have discussed the financial implications of a major cyber incident, yet organisational preparedness often lags. High-profile breaches in the UK during 2025 exposed gaps in awareness, investment and specialist capability, particularly as security leaders are expected to operate as strategic executives rather than technical specialists.
By 2027, fragmented AI regulation is expected to cover half the world’s economies, driving billions in compliance costs. Governance will increasingly act as a competitive differentiator as customers, regulators and partners demand proof of responsible use.
Resilient leadership in 2026 is defined by the ability to anticipate disruption rather than simply respond to incidents, embedding governance and scenario planning into strategic decision-making.
Cultural readiness has become a decisive factor in whether organisations succeed or stall. Rapid automation and AI-driven change are reshaping roles and career pathways, generating anxiety, cynicism and change fatigue across workforces already stretched by successive transformations. Without a strong cultural foundation, technology deployment and risk management initiatives are likely to fail.
By October 2025, job cuts in the US were up 175% year over year, reaching their highest single-month totals since 2008, even as financial markets surged. Three quarters of CEOs expect further workforce reductions in 2026, with AI adoption cited more often than revenue growth or talent attraction. Short-term cost savings from headcount reduction risk being outweighed by longer-term damage to resilience, reputation and organisational capability.
Leaders must intentionally foster psychological safety so teams feel able to experiment, challenge assumptions and raise problems early. Recognition, belonging and trust are essential to retention and performance in an environment of sustained uncertainty. Anxiety is not limited to those most at risk of displacement. Recent research shows 71% of leaders report increased stress, with many reconsidering their careers.
Organisations face a difficult tension: maintaining workforce commitment while implementing technologies that will eliminate roles. Executives across functions will need to work more closely with HR and IT to redesign workforce models, embed continuous learning and use analytics and AI tools to monitor quality, sentiment and capability development aligned with current and future organisational priorities and goals.
Leadership itself must be protected from change fatigue and burnout as organisations manage overlapping pressures from AI adoption, geopolitical uncertainty and supply chain resilience.
Remote and hybrid working models further complicate cultural cohesion. Leaders must translate values into everyday behaviours and redefine performance around outcomes rather than presence. As technology adoption accelerates, closer collaboration between technology, people and risk leaders becomes essential so that cultural and human considerations are embedded into change rather than addressed retrospectively.
The leadership capability required for sustained success in 2026 differs fundamentally from previous cycles. Digital and AI fluency are now core executive skills, essential for allocating capital, assessing risk and making informed decisions. Technical understanding alone is insufficient. Leaders must combine judgement, emotional intelligence and strategic vision as intelligent systems increasingly execute operational and customer-facing work.
By 2027, an estimated 75% of hiring processes will require evidence of AI literacy. Yet AI leadership demand is growing faster than supply. Fewer than a third of companies have trained even a quarter of their workforce to use AI. While most leaders use generative AI regularly, adoption among frontline employees has plateaued.
Only about a quarter of frontline employees report strong leadership support for AI adoption, highlighting a gap between executive intent and lived experience. Where leaders actively support AI use, employee sentiment improves sharply.
Building resilient leadership pipelines requires a shift from episodic training to deliberate, longitudinal development. The strongest organisations expose future leaders early to AI-enabled initiatives with commercial accountability, rotate talent across functions to build understanding of governance and human impact, and expect senior executives to sponsor capability building directly.
Effective pipelines combine experiential learning, cross-functional mobility and visible executive sponsorship. Organisations that embed digital and AI capability into leadership development consistently outperform peers, yet fewer than 30% integrate AI exposure into succession planning.
External partnerships with universities, industry bodies and consultancies can accelerate progress, but ownership of leadership readiness must remain with the executive team. Sustainable pipelines are built by treating learning and exposure as strategic assets rather than HR programmes.
As leaders look beyond 2026, sustainable value creation has moved from compliance obligation to strategic imperative. Sustainability has evolved into a source of differentiation. The EU’s Carbon Border Adjustment Mechanism, taking effect from 2026, is already reshaping supply chains and investment decisions.
Investors and stakeholders increasingly expect environmental, social and governance considerations to be embedded into business models. Organisations that treat sustainability as a reporting exercise will struggle to compete for talent, customers and capital as ESG performance becomes integrated into regulation, financing, customer expectations and operational efficiency.
Climate disclosure requirements, resource scarcity and energy costs are already influencing competitiveness. Leaders must embed sustainability directly into growth strategies rather than responding defensively to external pressure.
Those that succeed will be better positioned to deliver resilient growth, maintain trust and compete in an increasingly constrained and scrutinised environment.
The year ahead represents a convergence of technology maturity and organisational capability. Organisations that deploy AI to work alongside people rather than simply replace them will be better positioned to build hybrid teams capable of sustained innovation and resilience. Those that pursue short-term efficiency by stripping out human judgement may gain immediate advantage but risk fragility as technologies, regulation and societal expectations evolve.
Achieving the right balance between speed and sustainability requires deliberate choices: reimagining workflows, strengthening governance, investing in future-ready leadership and embedding resilience and sustainability into operating models. These are interconnected responsibilities that will define competitiveness through 2026 and beyond.
For executives, 2026 offers both profound risk and extraordinary opportunity. Decisions taken now about where to invest, how to manage risk, how to lead people and how to create value responsibly will shape organisational performance and reputation for years to come.
Rialto works with senior leaders to navigate this complexity, helping organisations unlock growth while building resilient leadership teams. Through targeted coaching and development, we create the space for leaders to think clearly, act decisively and lead effectively in 2026 and beyond.
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