Executive Outlook for Q2 2026: UK and EU

UK and Europe Executive Market Trends Amid Economic Uncertainty

As Q2 2026 opens, Rialto analysts examine the UK and European executive landscape against a backdrop that has shifted materially since the start of the year. What had appeared to be a gradual stabilisation with modest growth, easing inflation and a credible path to rate cuts after years of shocks and uncertainty has been disrupted by the outbreak of conflict in the Middle East. The implications for business confidence, hiring sentiment and executive value are already being felt and, whenever it may end, it will undoubtedly have long term implications on the global outlook.

This insight examines the current economic data, the state of the executive market and the capabilities that will determine who stays relevant in what is becoming an increasingly selective environment. It finds that AI competence and success is now the single greatest differentiator for performance and value.

UK Economic Outlook 2026: A Recalculated Picture

The UK economy grew 1.4% in real terms across 2025, its strongest performance since the pandemic but below the OBR’s forecast of 1.5% GDP grew 0.2% in the three months to January 2026, with services up 0.2%, production up 1.3% and construction falling 2.0%. Monthly GDP was flat in January, and the Bank of England estimated underlying quarterly growth for Q1 at around 0.1%.

Conflict in the Middle East and Iran’s effective blockage of the Strait of Hormuz has since triggered a significant spike in global energy and commodity prices that could endure well beyond any ceasefire. Fertiliser prices are potentially doubling, the Food and Drink Federation is projecting 9% food inflation by year-end and central banks will be forced to hold rates higher for longer precisely when economies were counting on cuts. None of these pressures reverse the moment a ceasefire is announced.

The OECD revised its UK inflation forecast for 2026 to 4%, up 1.5%, and cut its growth projection from 1.2% to 0.7%, the steepest downward revision of any major economy in its March interim outlook. GDP growth forecasts have been cut to between 0.4% and 0.7%, below the OBR’s pre-conflict forecast of 1.1%. The EY ITEM Club now expects business investment to contract by 0.2% this year.

Rialto director Richard Chiumento said: “The structural reset we have been tracking for the past twelve months has been overtaken by an acute shock on top of a chronic one. Organisations that were managing cautiously through a tight fiscal environment now face renewed inflation, constrained monetary policy and a further compression of confidence. That combination does not create space for hesitation. Leaders need to move faster, not slower.”

The Executive Market: Cooling Becomes More Acute

The UK unemployment rate stood at 5.2% in November 2025 to January 2026, its highest since 2021, with 1.87 million people out of work, up 323,000 over the year. Total vacancies fell 9.5% compared with a year earlier, declining in 15 of 18 industry sectors, with 2.6 unemployed people per vacancy, up from 1.9 a year ago. Regular pay growth fell to 3.8%, its lowest in over five years. The BDO employment index dropped to 93.30 in February, its weakest reading in nearly 15 years. Recruitment firm Robert Walters’ chief executive Toby Fowlston described the current environment as the longest hiring downturn the industry has ever experienced, worse than both the 2008 financial crisis and the pandemic.

The energy price shock now threatens to intensify these pressures. Higher costs will squeeze margins, reduce hiring budgets and accelerate the turn towards automation and offshore resourcing already trending before the conflict. The April 2026 minimum wage rise to £12.71 per hour, and employer National Insurance increases already in effect, add further to the cost of employment at a moment when businesses are least able to absorb it.

AI Hiring Is Bucking the Trend

Overall UK job postings sit 27% below their pre-pandemic baseline, but postings mentioning AI have climbed to 127% above it. Around 7.5% of UK job postings contained AI mentions in mid-Q1. In several fields with striking declines in overall postings, including marketing, HR and accounting, posts mentioning AI have more than doubled. The category with the highest share of AI-related postings is data and analytics at 47%, followed by software development at 41%.

Employers are increasingly expecting workers across a broad range of roles to engage with AI as a routine part of the job. For executives, this is now the baseline of assessment. Boards asking about AI governance, algorithmic accountability and value realisation are looking to leadership, not technology, for answers.

Sectors and Skills in Demand

Engineering was the only sector in the KPMG/REC survey to report stronger demand for permanent staff in February 2026, driven by defence spending, infrastructure investment and the energy transition. The conflict that has complicated the macroeconomic outlook has also reinforced the urgency of energy security investment and the demand for leaders who can deliver complex programmes across contested political and regulatory terrain.

Executives skilled in risk, regulatory change and cost transformation remain in demand in financial services. Cybersecurity and digital infrastructure are still attracting investment regardless of broader hiring freezes. Private equity has sharpened its lens: operating partners and interim executives with restructuring and rapid performance improvement experience are valued.

European Executive Job Market Trends 2026: From Fragmentation to Shared Shock

In our Q1 2026 insight, we noted a Eurozone broadly improving but unevenly, with Germany wrestling with industrial contraction, Spain and Italy seeing executive vacancies well above pre-pandemic levels, and the EU’s regulatory complexity rewarding executives with cross-border fluency. That picture has now been overtaken by a shared external shock.

The OECD cut the Eurozone growth forecast by 0.4% to 0.8%. The ECB projects 0.9% growth, with Q2 activity expected to fall close to zero. Interest rates were held in March, abandoning the cuts markets had anticipated, while the Eurozone inflation forecast was raised by 0.7% to 2.6%.

Germany’s energy-intensive industrial base makes it especially susceptible. The defence spending narrative offers longer-term relief but will not offset the near-term squeeze on chemicals, automotive and manufacturing. Chemical and steel manufacturers across the EU have already imposed surcharges of up to 30% to offset surging costs, with economists warning of the risk of permanent deindustrialisation in some sectors.

Spain and Italy retain structural momentum, but the shared energy shock has compressed the gap between strong and weak performers. Cross-border regulatory fluency, AI governance capability and the judgement to advise boards on which investment programmes to protect and which to defer are all commanding a higher premium than three months ago.

Governance, compliance and sustainability roles are also in demand as the EU Corporate Sustainability Reporting Directive enters full enforcement, affecting approximately 50,000 companies according to the European Parliament.

Compensation: Sophistication Over Scale

The Indeed Wage Tracker recorded 4% year-on-year posted wage growth in February 2026, the lowest level in four years. With inflation expected to exceed 3% through mid-year, real-term gains are likely to remain limited, reinforcing a shift in how organisations structure senior remuneration in a constrained environment.

Rather than increasing base salary, employers are turning to more targeted, performance-linked reward. Signing bonuses, equity participation and long-term incentives are becoming more common, particularly where critical leadership capability must be secured without adding fixed cost.

For executives, this is a more exacting and evidence-based market. Compensation is increasingly tied to demonstrable outcomes relating to value creation, cost optimisation, revenue growth and transformation delivery, making the ability to evidence impact as important as experience.

Career Strategy for Executives in for Q2 2026: How to Stay Competitive

The Middle East conflict has added genuine unpredictability to a market already structurally recalibrating. Where some organisations were tending towards paralysis, they now risk making hasty pressure driven decisions that hollow out long-term capability in pursuit of short-term cost reduction. Executives who can help boards hold the line and make the case for investing in the right capabilities while others retrench will be well positioned when conditions stabilise.

They must also demonstrate credible authority over how AI should be deployed, governed and measured to remain relevant. Executives who cannot show this are already at a structural disadvantage in assessment processes, regardless of sector. (For a deeper examination of what this requires in practice, see our previous insights including What it actually takes to make AI work and AI is changing everything: how to stay ahead.)

The executives who will make ground are those who treat the current environment as a structural context within which to operate, not a minefield to survive.

Four actions define that approach.

Translate volatility into decisions. It is not enough to read the environment accurately. Executives who stand out convert external uncertainty into immediate, organisation-specific choices on capital allocation, workforce shape and operational focus, with the clarity and speed that boards currently lack and urgently need.

Prioritise with precision and reallocate at pace. In a constrained market, breadth is a liability. High-performing executives identify the small number of initiatives that will drive disproportionate value and actively move capital and resource towards them rather than preserving legacy activity out of inertia.

Impose discipline on technology and AI investment. Differentiation comes from linking technology investment to measurable outcomes, challenging weak use cases and ensuring that deployment translates into productivity, cost and/or revenue impact, not just adoption metrics.

Evidence impact in quantified terms. As the market becomes more selective, broad experience carries less weight than demonstrable results. Executives must show consistent, quantified impact, particularly in constrained or volatile conditions.

To read about the US, MENA and Asia regions, all of which are navigating different paths through the challenging economic landscape, click here.

How Executives Can Stay Relevant in a Changing Job Market

As the pace of change accelerates, every executive must think seriously about how to stay relevant, maintain credibility, and secure a strong executive trajectory in today’s market. This requires mastering the fundamentals of leadership while committing to continuous AI learning and digital fluency.

If you are considering how best to position yourself for the next stage of your career or an upcoming executive transition, Rialto can support your journey. You are also invited to join the Rialto AI Business Leaders Circle – a forum enabling members to gain access to the conversations shaping the future of AI, including private briefings in the House of Lords, strategic insights from global AI experts and the chance to influence national policy through the All-Party Parliamentary Group on AI.

To find out more, book an appointment to speak to one of our team today.

“Harnessing machine learning can be transformational, but for it to be successful, enterprises need leadership from the top. This means understanding that when AI changes one part of the business, other parts must also change.” Erik Brynjolfsson, Stanford Institute for Human-Centered AI

Brynjolfsson is one of the world’s most cited economists on technology and productivity, a Stanford professor who has spent three decades studying what separates the few organisations that extract real value from transformative technology – which we will call the 6% club – from those that do not. He finds it an organisational issue: failure to consider the structural, governance and cultural changes needed to lead through AI transformation inevitably leads to under-achievement and disillusion.

Eighty-eight per cent of organisations globally now use AI in at least one business function, yet only around 6% qualify as genuine AI high performers – businesses attributing more than 5% of EBIT directly to AI and reporting significant value across the enterprise. The remaining 94% are somewhere between enthusiastic experimenter and quietly disillusioned pilot operator. Most have the tools. Very few have the results.

What the 6% are actually doing

These high performers do not have access to better technology. What distinguishes them is organisational. McKinsey found that high performers are 3.6 times more likely to be pursuing transformational, enterprise-level change through AI and nearly three times more likely to have fundamentally redesigned their workflows in the process. Bolting AI onto existing processes is a false economy that leads to wasted resources, lost opportunities and competitive drag. The 6% rebuild those processes around what AI can actually do.

They are also three times more likely to have senior leaders who actively own and champion AI, genuinely modelling its use and driving its integration into strategic decision-making. This is the strongest single predictor of enterprise-level AI impact in the data. When senior leadership treats AI as a technology upgrade, the organisation stalls. When they treat it as a strategic shift that requires them personally to change how they work, the organisation moves.

The high performers apply the same capital discipline to AI investment as they would to a major acquisition: clear strategy aligned with organisational objectives, defined milestones and criteria for adjusting or closing underperforming initiatives. They manage AI investment across three horizons: foundational infrastructure (two to four year payback), near-term productivity (six to twelve months) and longer-term transformation (ongoing). They do not allow short-term return pressure to collapse everything into the second horizon at the expense of the first and third.

The Kyndryl Readiness Report, drawing on 3,700 senior leaders, found that 61% of CEOs now face intensified pressure to demonstrate AI returns compared with the prior year, while 53% of investors expect positive returns within six months or less. Responding to that pressure by sacrificing infrastructure and transformation investment to feed short-term results is one of the primary reasons organisations get trapped in pilot purgatory. Honest, clear communication from the outset – managing expectations, helping stakeholders understand realistic timescales and reimagining how success is measured – is itself a leadership responsibility. Equally, so is recognising when to kill a pilot that is not working, and to explain why.

The governance gap

Two-thirds of organisations remain in experimentation or piloting phase, lacking the operating model maturity to convert deployment into value. The most common single failure is the absence of clearly named executive ownership for AI outcomes across product, legal, risk and compliance. When nobody is explicitly accountable for what AI is doing across the organisation – which McKinsey found to be the norm – innovation slows, risk accumulates and resources are wasted.

Most organisations view governance as a constraint. The 6% experience it as a competitive advantage: the mechanism that builds stakeholder trust, enables faster decision-making within defined boundaries and provides the audit trail that allows boards to demonstrate responsible operation to regulators, investors and customers.

Regional AI regulatory frameworks add further complexity. The EU AI Act is now in phased application, with penalties reaching 7% of global annual turnover for high-risk non-compliance. The UK places the burden of interpretation directly on boards, making personal executive accountability the operative principle. In the US, enforcement is arriving through litigation rather than legislation, making documentation, testing and explainability the primary risk mitigation tools. Working across different regions demands flexible compliance models, but across all three regimes AI governance is a board-level responsibility and the expectation that it can be delegated to IT or legal functions is no longer sustainable.

What boards and leadership teams must actually do

Moving from the 94% to the 6% requires coordinated evolution across five interconnected dimensions. Here are five questions your board should be able to answer:

Who in your organisation is accountable if your AI produces a wrong outcome? In most organisations, nobody can answer that. Executive accountability means designating named individuals responsible for AI outcomes across every relevant function – product, legal, risk, compliance and people – with those owners demonstrating AI literacy in capital allocation decisions.

Are you asking how AI could transform how this work is done, or just how to make existing processes faster? Workflow redesign is the single most powerful lever in the McKinsey data. High performers decompose roles into task sets, identify which activities are best automated, which augmented and which require human judgement, and rebuild performance metrics around value delivered rather than activity completed. (See our previous insight, Redefining Work in an Human/Machine Era.)

Is your AI training a one-off event or embedded into how people work every day? McKinsey’s data shows that high performers embed at least 81 hours of annual AI training per employee into operations. Sixty-three per cent of employers globally identify capability gaps as their primary barrier to AI scaling, yet most continue to look externally for capabilities that reskilling could develop internally at lower cost and with less disruption.

Have you defined what failure looks like before you start? Capital discipline with kill-switch criteria means defining in advance, at the point of approving any AI initiative, when a pilot gets shut down rather than scaled. The organisations accumulating the most expensive AI failures are those that never established what insufficient progress looked like.

Can you explain to every stakeholder – employees, customers, regulators, investors – exactly how AI is influencing decisions that affect them? Stakeholder trust architecture is an operational requirement, not a PR exercise. In an environment where 51% of organisations report AI-related incidents, eroded trust is difficult to rebuild. High performers are more than twice as likely to have defined human-in-the-loop validation processes – 65% versus 23%.

Measuring returns beyond the financial

McKinsey found that function-level returns in software engineering, manufacturing and IT regularly reach 10-20% cost reductions, with marketing and product development seeing revenue uplift above 10% in leading deployments. But the ROI conversation in most boardrooms is still too narrow. Organisations measuring only financial return are missing both the value and the risk.

Two thirds of organisations in McKinsey’s survey report AI-driven improvements in innovation capacity, while 45% report improved customer satisfaction and 36% see strengthened competitive differentiation. These are leading indicators of future financial performance. Organisations tracking only EBIT impact miss the earlier signals that tell them whether their AI investment is building the capabilities that will compound into revenue.

Stakeholder trust is measurable and its erosion is one of the most expensive and least discussed AI risks. Customer trust in AI-mediated decisions, employee confidence in the organisation’s approach to workforce impact and investor trust in governance quality all affect the cost of capital, talent retention and customer lifetime value in ways that do not appear in short-term financial metrics. Regulatory standing carries an implicit financial value that almost no organisation currently quantifies, and boards that require AI investment proposals to include a regulatory exposure assessment alongside the financial case are making a sound capital allocation decision, not an over-cautious one.

Leadership seeking to help their organisations break into the top 6% can learn much from the earlier pioneers — both what to do, and what not to do.

JPMorgan Chase: lessons learned in an $18 billion experiment

JPMorgan Chase is the most thoroughly documented example of an organisation in the 6%. Its AI programme has more than 450 live use cases delivering between $1.5 billion and $2 billion in annual value. More than 200,000 employees use its proprietary LLM Suite platform daily and AI-attributed benefits have grown 30-40% year-on-year. AI coding assistants have lifted developer productivity by 10-20% across a technology workforce of 63,000, its Coach AI advisory tool contributed to a 20% increase in gross sales in asset and wealth management between 2023 and 2024, while fraud prevention and operational efficiencies saved a further $1.5 billion.

What explains it? Not the technology. JPMorgan uses many of the same foundation models available to every competitor. What distinguishes the bank is its governance architecture: a firmwide Chief Data Officer mandate aligning data platforms with model risk management, legal and security functions across every business line; rigorous ROI measurement at the individual initiative level; and a board-level treatment of AI as a core operating function. As JPMorgan’s own Chief Analytics Officer put it: “There is a value gap between what the technology is capable of and the ability to fully capture that in an enterprise.” Their answer to that gap has been structural and the returns reflect it.

The bank also acknowledges the risks candidly: recouping the $18 billion investment will take time, and the technology comes at human cost, with a projected 10% reduction in operations headcount. Organisations carry an ethical and societal responsibility to mitigate those potentially significant losses.

MD Anderson Cancer Center: a $62 million structural failure

In 2012, MD Anderson partnered with IBM to build an AI clinical decision support tool for oncologists. The goal was to democratise world-class cancer care, giving any oncologist anywhere access to the diagnostic intelligence of one of the world’s leading cancer institutions. Five years and $62 million later, the contract expired before the system had been used on a single real patient. Inquests found the failure organisational rather than technological: the system was incompatible with existing platforms, scope had ballooned, the original six-month delivery timeline had been extended twelve times and no one with clear authority had been accountable for keeping the project within workable boundaries. It failed where JPMorgan succeeded – in governance, data foundation, accountability and the integration of human and technical design.

The window is narrowing

The gap between the 6% and the 94% continues to widen because AI advantage compounds. The organisations that have redesigned their workflows, built their people’s capabilities and embedded governance into their operating models are iterating faster and learning more with every cycle. Their data gets richer, their models improve and the distance between them and the organisations still running disconnected pilots increases.

The structural work needed – governance architecture, operating model redesign, talent investment, cross-functional accountability – is neither glamorous nor fast. The 6% understood this earlier than most. They made different choices, at the leadership level, about what kind of organisation they were building. That, ultimately, is the only gap that matters.

This insight is edited from a section of the first Rialto AI Business Leaders Circle Strategic Briefing of 2026, a biannual benefit of membership, which also includes the opportunity to help shape the future of AI in UK business with a seat at the table of the All-Party Parliamentary Group for AI (APPG AI) alongside MPs and other leading figures across government, academia and investment.

You can find out more about joining here

Navigating the Structural Reset

As we enter 2026, Rialto analysts examine the evolving executive landscape across UK and European markets. The data confirms we are not experiencing a cyclical downturn but a fundamental recalibration of executive value. Traditional management hierarchies are being compressed, generalist roles are disappearing and leaders are expected to demonstrate immediate impact in constrained environments.

This quarter’s insight examines UK and EU broader economic forecasts to support organisational planning and decisions, executive market dynamics and the capabilities driving demand in an increasingly selective hiring landscape.

It finds some resilience, pockets of dynamic growth and room for cautious optimism amid continuing uncertainty, the near-constant flow of global shocks and GenAI-driven disruption.

UK Economic Outlook: Modest Growth, Fiscal Constraint

The UK economy grew 0.3% in November 2025, marginally higher than economist predications and rebounding from a 0.1% contraction in October. For the three months to November, GDP increased just 0.1%, with services up 0.2%, construction down 1.1%, and production declining 0.1%. The Office for Budget Responsibility forecasts GDP growth of 1.4% for 2026, down from 1.9% projected in March, reflecting weaker productivity expectations. KPMG’s outlook is more cautious, projecting 1.0% growth, while the Treasury’s survey of independent forecasters averages 1.1% for 2026.

Inflation is easing toward the Bank of England’s 2% target. The Consumer Price Index rose by 3.2% in the year to November 2025. KPMG expects inflation to return to target by April 2026, supported by measures announced in the Autumn Budget, including energy bill reforms projected to save households £150. The base rate currently sits at 3.75%, with market pricing indicating further cuts to 3.25% by year-end, though the pace of reduction is slowing as the Bank approaches neutral policy settings.

Fiscal space remains severely constrained. Debt servicing now consumes approximately 10% of government spending, the highest proportion since the 1980s. Public sector hiring contracted 3.2% year-on-year, and procurement budgets for external consultancy and interim leadership have been reduced across Whitehall. The OBR’s November forecast confirmed the government faces limited room for stimulus, with the tax-to-GDP ratio projected to reach 37.7% by 2027-28, a post-war high.

Sectoral Performance: Retail Under Pressure, Manufacturing Stabilises

Retail: The retail sector enters 2026 facing acute margin pressure. Retail sales volumes rose 0.6% in the three months to November 2025, with clothing stores and computer retailers performing strongly, but the sector confronts mounting costs. The British Retail Consortium estimates that increases to National Insurance contributions (from 13.8% to 15.0%) and the National Living Wage will cost the sector £5 billion annually. PwC’s Retail Outlook notes that 81% of retailers plan to increase prices to offset these challenges, squeezing consumer demand. Executive hiring in retail has softened accordingly, with demand concentrated in transformation roles focused on cost optimisation and omnichannel integration. Executives in consumer-facing sectors must demonstrate cost discipline or face obsolescence.

Manufacturing: UK manufacturing showed tentative recovery in December 2025. The S&P Global UK Manufacturing PMI rose to 50.6, the highest reading in 15 months. However, the expansion was driven primarily by inventory building and backlog clearance rather than sustained demand growth. Manufacturing employment declined for the 14th consecutive month. Export orders contracted for the 47th consecutive month in December, reflecting weak global demand and continued impact from US tariffs.

The sector’s recovery remains fragile, dependent on domestic demand and vulnerable to external shocks. Executive demand in manufacturing is concentrated in operational turnaround roles, supply chain resilience and automation deployment.

Construction: Construction output fell 1.1% September to November, the largest quarterly decline since March 2023. However, infrastructure remains resilient, with output reaching £9.93 billion in Q3 2025, up 4.2% from Q2. Roads and electricity infrastructure drove growth, up 30.2% and 28.2% respectively, supported by government commitments to energy transition and public infrastructure. Executive demand in infrastructure and renewable energy projects command premiums for project delivery leaders, while residential and commercial segments face headwinds.

Financial Services

Financial services enters 2026 in strategic recalibration. Higher-for-longer interest rates support net interest margins, but credit conditions tighten and loan growth slows. Capital markets activity remains selective, with restructuring and private credit robust while IPOs. Regulatory pressure on capital adequacy, consumer duty and operational resilience increases costs sector-wide.

Executive demand softens in growth roles but remains resilient for risk, regulatory change, cost transformation and balance sheet optimisation. Credibility with regulators and execution discipline now outweigh expansion narratives.

Technology

Technology shows renewed revenue momentum but persistent hiring caution. Enterprise spending on AI, cloud optimisation and cybersecurity remains strong, while discretionary transformation budgets tighten. Investment shifts from broad growth to targeted productivity improvements.

Executive demand concentrates in roles bridging technology and commercial outcomes: AI governance, platform rationalisation, data architecture and value realisation. Boards increasingly prioritise executives who can industrialise AI over pure innovation leadership.

Healthcare and Life Sciences

Healthcare faces sustained structural pressure. Public systems struggle with workforce shortages, aging populations and constrained funding. Private healthcare and life sciences navigate higher financing costs and elongated investment cycles. Pharmaceutical pipelines remain active.

Executive hiring targets leaders in workforce transformation, operational performance and regulatory navigation. Digital health attracts interest but adoption varies. Executives translating innovation into scalable, compliant, cost-effective models command premiums.

Energy and Utilities

Energy shows strong investment momentum but rising execution risk. Grid infrastructure, renewables and energy security attract capital, but project delivery constraints – planning delays, skills shortages, supply chain bottlenecks – are constraining the sector.

Leaders with proven large-scale programme delivery, stakeholder management and regulatory navigation are in highest demand. Boards prioritise managing political, community and commercial complexity while maintaining delivery discipline above technical expertise.

Private Equity

Private equity operates in a disciplined, execution-led cycle phase. Deal volumes remain below peak, constrained by valuation gaps and financing costs, but activity recovers in sectors with clear cash flow visibility. Value creation shifts decisively from financial engineering to operational improvement.

Executive demand within portfolio companies remains strong but selective. Operating partners, interim CEOs and functional leaders with restructuring, integration or rapid performance improvement are valued while executives can expect to be placed under unprecedented levels of scrutiny.

The Executive Market: Capability Currency Replaces Headcount

The UK unemployment rate reached 5.1% in the three months to October 2025, the highest since March 2021. Total unemployment rose by 158,000 from the previous quarter to 1.83 million. Employment fell by 16,000 to 34.23 million, marking the second consecutive quarterly decline. The employment rate dropped 0.3 percentage points to 74.9%.

Vacancies fell to 717,000 in September to November 2025, down 9.6% annually and now below pre-pandemic levels. The ratio of unemployed people per vacancy rose to 2.5. The steepest drops in executive hiring occurred in generalist COO and commercial director positions.

Yet this tells only half the story. While overall volumes contract, the nature of available roles has shifted. Three trends dominate:

A Surge in Interim Executive Placements: Companies increasingly seek rapid restructuring capability over institutional knowledge, turning to interim executives who can quickly evaluate financial controls and implement transformation initiatives.

AI-Driven Organisational Flattening: According to Gartner’s 2025 workforce predictions, 20% of organisations will use AI to flatten their structures, eliminating more than half of current middle management positions by 2026. This represents elimination of coordinative roles which are being displaced by autonomous agents and workflow systems.

Adaptability as the Critical Hiring Filter: The most significant shift in executive assessment is the prioritisation of learning agility and technology fluency over traditional credentials. Research from executive search firms indicates that emotional intelligence and adaptability now rank as top predictors of leadership success, particularly during periods of change. This technological transformation demands executives who can rapidly absorb, deploy and govern emerging technologies. Multiple 2025 recruitment reports confirm that boards increasingly favour candidates demonstrating AI fluency, change management abilities and cross-disciplinary thinking over those with purely sector-specific experience.

This represents a fundamental revaluation of executive currency. Tenure and domain expertise, once premium assets, are now basic requirements at best and liabilities at worst if they signal rigidity.

Bright Spots: Where Demand Persists

Despite broader contraction, specific niches show robust executive demand:

Energy Transition and Infrastructure: The UK’s commitment to 50GW of offshore wind capacity by 2030 continues to drive hiring in engineering and project leadership.

Governance, Compliance, and Sustainability: The EU’s Corporate Sustainability Reporting Directive entered full enforcement in January 2026, affecting approximately 50,000 companies. Demand for Chief Sustainability Officers and compliance-focused finance executives has surged accordingly, as reported by PwC’s CSRD Readiness Survey.

Digital Infrastructure and Cybersecurity: The UK’s National Cyber Strategy and increased investment in sovereign cloud infrastructure have created sustained demand for CISOs and technology risk executives.

Compensation:

Executive pay growth is cooling but becoming more sophisticated. Annual growth of regular pay excluding bonuses was 4.6% in the three months to September 2025, the lowest since April 2022. KPMG’s Report on Jobs for January 2026 reported that recruitment activity weakened in December as permanent placements fell at the sharpest rate since August, while candidate availability surged amid redundancies. However, starting salary inflation reached a seven-month high as employers competed for specialised talent.

Nominal salary increases for C-suite roles averaged 3.1% in 2025, barely outpacing inflation, but total compensation packages are evolving rapidly. Signing bonuses have increased in frequency, offsetting compressed base salaries.

Flexibility remains a negotiation point, with many FTSE 350 firms requiring executives on-site three or more days per week.

European Context:

The Eurozone is projected to expand by approximately 1.2% in 2026, with significant regional variation. Germany’s manufacturing output declined 2.1% year-on-year in Q4 2025, with automotive and chemicals sectors shedding senior roles. However, Germany’s €10 billion “Sovereign AI” initiative is creating concentrated demand in biotech, quantum computing and autonomous systems. Spain’s unemployment rate has fallen to 11.2%, its lowest in 15 years. According to Indeed’s European Job Postings Tracker, executive vacancies in Spain and Italy remain 53% and 46% above pre-pandemic levels, respectively, concentrated in professional services and construction tied to EU recovery funds. The EU’s data localisation regulations and proliferation of national AI governance frameworks are creating compliance complexity that favours executives with cross-border expertise.

What Executives Should Watch and Do

Articulate Value Creation, Not Activity: In a low-growth environment, boards scrutinise return on investment with forensic intensity. Executives must demonstrate measurable impact: revenue defended, costs extracted, processes redesigned. The ability to tell a compelling value story, quantified and evidence-based, separates those who secure roles from those who circulate CVs indefinitely.

Develop AI Governance Fluency: By 2026, AI literacy is no longer a technology function competency but a baseline executive requirement. Leaders must be conversant in ethical deployment, bias mitigation and regulatory frameworks. The EU AI Act, now in force, imposes obligations on executive leadership for high-risk AI systems. Boards are asking pointed questions about algorithmic accountability and executives without credible answers may find themselves passed over.

Navigate Trade and Regulatory Complexity: With UK trade disrupted by US tariffs and EU regulatory fragmentation intensifying, executives who can demonstrate facility with cross-border operations, supply chain reconfiguration and tariff mitigation strategies are commanding premiums. This competency extends beyond traditional international roles to any leader managing supplier relationships or market access.

Cultivate Continuous Development: The most successful executives treat their own capabilities as a continuous project. Whether through structured coaching, peer advisory networks or targeted upskilling in emerging domains, the goal is sustained relevance. Organisations now expect executives to demonstrate recent learning, not simply cite past achievements.

The outlook for Q1 2026 is one of selective opportunity within structural constraint. While macroeconomic growth remains modest, the market for top-tier leadership is exceptionally dynamic. Generalist executives face headwinds; specialists with demonstrable impact in constrained environments are in short supply.

This is not a market to wait out. The executives who will thrive are those who recognise that 2026 represents a structural reset, not a cyclical pause, and who take decisive action to align their capabilities, narratives, and networks with the new reality of value-led growth.

For Q1, 2026, insights on the US, Asia and Middle Eastern markets click here

A Seasonal Leadership Reflection for 2026

Hands up who’s exhausted and ready for a pause. For many leaders, this year has demanded sustained resilience. The supercharged evolution of AI has been enough to test even the most technologically confident among us, while regulatory pressure and a persistently slow hiring market have made this something of an annus difficilis for those carrying organisational responsibility, to misquote our late Queen.

As we look ahead to 2026, leadership is increasingly defined not just by decision-making, but by how leaders hold uncertainty, distribute accountability and sustain performance through ongoing disruption.

With that in mind, we invite you to ease into the festive wind-down with our Christmas-themed leadership quiz. It is intentionally light-hearted!

Answer instinctively and tally which letter you choose most often. You may gain a useful insight into how you lead, only with less trauma than the spectral visitations and personal upheaval that accompanied Scrooge’s famous leadership transformation.

Take the Christmas Leadership Quiz

1. Which Christmas film best reflects how you lead?
   A) It’s a Wonderful Life – (focused on purpose, values, legacy)
   B) Home Alone – (like its lead character, quick-witted, decisive, self-reliant)
   C) The Holiday – (It’s all about managing other people’s needs and expectations)
   D) Die Hard – (Dealing with multiple threats and taking charge to avoid disaster)
2. You’re hosting Christmas dinner. What’s your style?
   A) Planned, tested, calm
   B) You take charge and improvise
   C) Everyone brings something
   D) Big vision, lots happening
3. Which Christmas retailer do you most admire?
   A) John Lewis – trust and emotional connection
   B) Amazon – speed and execution
   C) M&S – consistency, quality and care
   D) A small independent – creativity and agility
4. A key decision you made this year didn’t land. You:
   A) Reflected openly and adjusted course
   B) Fixed it quietly and move on
   C) Talked it through with the team
   D) Reframed it as “part of the plan”
5. Your reaction to Last Christmas on the radio:
   A) Traditions matter
   B) Enough already
   C) It connects people
   D) Incredible durability but could do with remastering for the current age
6. It’s 20 December and a problem appears. You:
   A) Check it aligns with core principles
   B) Solve it yourself
   C) Pull the right people together
   D) Absorb it along with everything else
7. Your team’s energy in mid-December is best described as:
   A) Tired but committed
   B) Running on adrenaline
   C) Supporting one another
   D) Stretched thin
8. Someone offers to help with a complex task. You:
   A) Welcome the support
   B) Decline – it’s quicker if you do it
   C) Accept and share ownership
   D) Thank them, but keep control
9. Which festive phrase sounds most like you?
   A) “Let’s do this properly”
   B) “I’ll just sort it”
   C) “Let’s work it out together”
   D) “We’ll make it work somehow”
10. If your leadership were a Christmas item, it would be:
    A) A star – guiding and consistent
    B) A lone reindeer – strong but overworked
    C) A bustling table groaning with food collaboratively prepared
    D) Fairy lights – bright, but easily tangled

Your Leadership Style Explained

Mostly As – The Purpose-Led Anchor

You provide stability, direction and a clear sense of what matters. In uncertain conditions, people look to you for reassurance and moral clarity. The risk is that consistency hardens into rigidity. As 2026 brings further volatility, regulation and AI-driven change, your opportunity is to hold purpose steady while allowing strategy, structure and ways of working to evolve around it.

Mostly Bs – The Lone Solver

You are decisive, capable and reliable under pressure. When things are urgent or ambiguous, you step in and get things moving. The risk is isolation. Struggling to ask for help or admit when something hasn’t worked quietly limits learning, increases personal strain and teaches teams to defer rather than contribute. In 2026, your leadership impact will grow fastest if you practise sharing uncertainty earlier and modelling that asking for help is a strength, not a failure.

Mostly Cs – The People-First Leader

You lead through trust, collaboration and shared ownership. Teams feel safe, engaged and supported, which builds resilience over time. The risk is drift. In fast-moving environments, a strong desire for inclusion can slow decisions or blur accountability. As the pace of change accelerates in 2026, your challenge will be to pair empathy with clarity, making timely calls while keeping people with you.

Mostly Ds – The Complexity Carrier

You are comfortable holding ambiguity, competing priorities and constant change. You keep things moving when others feel overwhelmed. The risk is overload. Absorbing too much can normalise pressure, mask structural problems and quietly erode performance. In 2026, the step-change will come from simplifying boldly, naming trade-offs clearly and designing systems that reduce dependence on your personal capacity.

Leading Forward: Reflection, Renewal and Readiness for 2026

Christmas has a habit of revealing truths. The leaders who will progress fastest into the New Year will be those who notice their patterns and habits, take time to reflect honestly and consider what might need to change, whether within themselves or the organisational culture and systems they lead.

This moment of pause matters. Rest and reflect are not indulgences; they are strategic enablers.  Also, eat drink and be merry. Fun, connection and recovery act as biological and psychological reset mechanisms for the bran and body, restoring the capacity for focus, learning and resilience.  Warmth and belonging provide emotional renewal, something no strategy deck can replace.

Or, as Dr Seuss phrased it so beautifully in How the Grinch Stole Christmas:

“Maybe Christmas”, he thought, “doesn’t come from a store”.

“Maybe Christmas… perhaps… means a little bit more.”

With very best wishes for the season from all at Rialto.

The wind down to Christmas offers an enriching opportunity to reflect on the year just past. Most executives would agree 2025 was characterised by intensifying change: economic, technological and geopolitical pressures transformed markets, while talent and technology reimagined how organisations assess risks, opportunities and expectations. At Rialto, we recognised early the systemic impact of AI, emphasising that its implications reach far beyond IT. We are proud to have supported thousands of leaders in preparing early for this shift.

This year, the world at large finally started to catch up. Many more organisations moved beyond experimenting with ChatGPT toward broader adoption of GenAI, Agentic systems and early Artificial General Intelligence pathways, while looking ahead to possibilities in Physical/Spatial Intelligence and even Self-Aware AI, developments we will no doubt be exploring in more depth in 2026.

AI was only one factor amid a constellation of forces reshaping the business landscape.  The UK economy continued to be buffeted by the headwinds of Brexit and the pandemic; the costs of both are becoming clearer with supply chain, import-export and hiring issues persisting.  Added to this were renewed geopolitical tensions, the Trump tariff fallout, elevated energy and inflation costs, stubborn interest rates and increased tax burdens on employers. Collectively, these forces produced a complex environment that suppressed growth and demanded heightened vigilance from boards navigating an increasingly volatile operating landscape.

For executives in transition, whether through redundancy or seeking a voluntary change, the result was a flat, cautious hiring market with greater competition for fewer roles, compounded by the march of automation and AI displacing humans at an unprecedented rate. While we expect these technologies to generate new forms of economic value and employment in time, we remain in a period of adjustment characterised by global uncertainty, contraction and spending restraint.

Still, as Albert Einstein said: “In the middle of every difficulty lies opportunity.” So here, we look at six key themes and lessons we learned in 2025 and we explore what senior leaders should carry forward as they prepare for 2026.

1: Geopolitics

Jamie Dimon, JPMorgan: “Our greatest risk is geopolitical risk”

Why geopolitics mattered in 2025: The year reinforced the notion that politics and geopolitics aren’t background events you can ignore. From renewed supply-chain shocks caused by export controls and export bans to the continuing war in Ukraine and frictions around China, governments and firms found shocks could arrive with little notice and enormous downstream cost.

The EU’s drive in December to secure raw materials and reduce dependence on China and repeated warnings from financial leaders that geopolitical risk is the dominant macro factor made clear that strategy today must be political as well as commercial.

The UK’s realisation that it must diversify its markets and not rely too heavily on the US for exports has driven a similar policy change here, with trade envoys seeking closer ties on the continent, in India, Australia and the Middle East.

What it means for 2026: Expect more deliberate “geo-stress testing” in boardrooms, with scenario planning that treats sovereign policy, trade controls and regional conflict as strategic variables rather than tail risks. Senior teams will need people who can read world politics, not just markets, to anticipate and prepare for global risks.
Action: Add a quarterly geopolitical heat-map to your strategy review; stress test the top three suppliers and the top two export markets under at least three political scenarios.

Read: Rialto’s Q4 executive outlooks for the US, Asia and the Middle East and for the UK and Europe.

2: Purpose

Tim Cook, CEO of Apple: “I believe that business, at its best, serves the public good.”

Why purpose mattered in 2025: Stakeholders (employees, customers, investors) continue to emphasise that purpose matters. They can see through virtue signalling, it must be authentic. Guided by purpose, strategic decisions become crystal clear.

In a year defined, as stated above, by geopolitical tension, regulatory shifts, supply-chain fragility, AI disruption and shifting workforce expectations all accelerating at once, purpose emerged as one of the few reliable stabilisers in an otherwise volatile environment.

Organisations without a clear “why” are finding themselves pulled in multiple, conflicting directions. Purpose acts as a filter: it sharpens prioritisation, reduces noise, guides ethical decisions and helps leaders stay consistent when uncertainty is high.

Look at Microsoft’s renewed purpose-led strategy under CEO Satya Nadella, particularly relevant in 2025 as AI becomes embedded in every business model. Microsoft’s mission, “to empower every person and every organisation on the planet to achieve more,” isn’t simply a tagline, it has shaped the company’s entire approach to responsible AI, partnerships with governments and major investments in skills development.

As AI governance, trust and adoption became critical issues in 2024–2025, Microsoft’s purpose provided a north star that helped the company balance innovation with safety, growth with responsibility, and market leadership with societal expectations.

Similarly, Apple reinforces consumer confidence by anchoring its products and operations in verified principles such as privacy protection, accessibility and responsible sourcing, which has been a critical factor in its sustained customer loyalty, premium market positioning and long-term commercial performance.

What it means for 2026: Purpose will be a pragmatic operating lens and a decision filter. Ethical boards will demand metrics that tie social and environmental outcomes to commercial results. The companies that win are the ones that make trade-offs through that lens, consistently.
Action: Before any major initiative in 2026, ask: How does this align to our stated purpose? And What is the one measurable commercial outcome that validates it?

Read: Why Ethics Matter More Than Ever in the Boardroom

3: Innovation and experimentation

Julie Sweet, CEO of Accenture: “Every leader needs to think of themselves as a reinventor.” 

Why innovation mattered in 2025: Uncertainty was the backdrop for breakthroughs: organisations that tested, learned and iterated moved faster. Whether it was new product routes, alternative sourcing or changed operating models, winners were those whose leaders explicitly created space to try, fail cheaply and scale what worked.

The Bank of America has introduced a “Speak Up!” tool, encouraging employees at every level to submit ideas, rewarding and celebrating those whose ideas are implemented.

Great Place To Work research found that this culture of psychological safety to experiment is the biggest driver of agility, making employees 253% more likely to approach change without fear.

Under Sweet’s leadership in 2025, Accenture consolidated its consulting, strategy, technology and operations functions into a unified “Reinvention Services” business unit, signalling a fundamental shift in how the firm delivers transformation for its clients.

Sweet told Fortune in November 2025: “We have a culture of progress over perfection. When you have that culture, you provide the safety to move quickly, to be able to make mistakes, and that is a deep part of our DNA.”  She argued that leaders must go beyond simply adopting new tools or technologies and rethink how they operate, how they grow talent, and how they lead, effectively committing to continuous reinvention

What it means for 2026: Expect more formal “fast experiment” systems with short cycles, measurable learnings and explicit guardrails for what counts as an acceptable failure: curiosity and rapid learning beat cautious stagnation.
Action: Create a three-month “safe experiment” fund with simple KPIs and a pre-agreed exit rule; celebrate the learning publicly, not just the wins.

Read: The interview with Sweet.

4:  Resilience

Kristalina Georgieva, Managing Director of IMF: “We live in a world of sudden and sweeping shifts… this is a call to respond wisely.” (In her April 2025 speech, Toward a Better Balanced and More Resilient World Economy.)

Why resilience mattered in 2025: Georgieva was addressing governments but the lessons apply equally to organisations and their leaders.

Business conditions shifted fast and constantly this year with regulatory moves, tariff threats and market re-ratings forcing mid-course corrections alongside the steep learning curve of AI integration. BCG, OECD and other analysts argued the balance had moved from pure cost optimisation to the “cost of resilience” mindset: companies that invested for optionality could pivot without collapsing margins. That difference between economic agility and brittle inflexibility showed up in supply chains, hiring and capital allocation.

Traditional planning cycles are now too slow. Leaders have to absorb disruption while still maintaining momentum. Resilience was not just about endurance in 2025, it was about adaptability under pressure. Organisations that built resilient cultures, where teams could recover quickly, learn fast and reorient without losing cohesion, were better equipped to manage supply-chain disruption, shifting customer behaviour and heightened scrutiny from regulators and investors.

For leaders, resilience also became a reputational marker. Stakeholders watched closely to see who could stay calm, communicate clearly and make principled decisions during uncertainty. The companies that did so strengthened trust, protected talent and preserved optionality in turbulent markets.
What it means for 2026:  Leaders should reframe planning cycles: fewer immovable five-year plans, more rolling 12-month roadmaps with pre-agreed pivot points. Governance must allow quick reallocation of resources when the data says “now.” Expect new roles (resilience officers or heads of organisational readiness) and more capital allocated to “insurance by design”, including flexible contracts, dual suppliers, and talent pools.
Action: Instead of responding in an emergency, plan an annual resilience-building rehearsal that tests people, systems and suppliers, and budget and prepare for the changes revealed.

Read: Leading Through Transformation Without Burning Out Your Teams

5:  Prioritise people

Gabe Newell, President of Valve Corporation: “The focus should always be on your customers, on your partners, and on your employees – then everything else will fall into place over time.”

Why putting people first mattered in 2025: In a year of restructuring, layoffs in most sectors and tight skills markets in others, organisations that invested in people with coaching cultures, continuous learning and psychological safety held onto performance.

High-profile leaders emphasised empathy and social intelligence as leadership differentiators critical to business capabilities, enabling a pivot from purely finance or efficiency-driven leadership towards people-centred strategies that stress trust, long-term capability and human capital.

People-first is foundational for resilience, adaptability and sustainable business performance, stabilising workforces facing seismic disruption and uncertainty, attracting and retaining talent and ensuring the human qualities missing from AI run through the DNA of companies to secure relationships and trust with staff, stakeholders and customers or clients.

Trust drives productivity, innovation, loyalty and growth. People-first demands personalising responses to individual need, showing empathy and compassion and reinforcing EDI and mental health commitments, to optimise workforce skills and fully engage your workforce.

Klarna replaced around 700 staff, many in customer-support roles, with AI-driven systems, hoping to streamline operations and reduce costs. This led to growing customer frustration, rising complaints and a noticeable drop in service quality. The automated systems struggled to handle nuanced or emotionally charged issues.

In 2025, the company publicly admitted it “went too far” and started rehiring or redeploying staff back into customer support to restore human interaction and service quality.

What it means for 2026: Expect investment in real development infrastructure: role-based learning pathways, coaching for leaders and clearer internal mobility plus increased staff surveys.
Action: Build a 3-month programme for leaders alongside HR, including shadowing, coaching and a psychological-safety checklist for their teams, to ensure the people-first culture drips down from the top.

Read: AI-Powered Workforces – Adding Value Through Strategic Upskilling and Leadership in transition – from Boomers to Gen Z

6 Reinforcing accountability

Culture Partners CEO Roger Connors: “When properly approached, accountability can really be the low-hanging fruit for optimising organisational performance and accelerating organisational change efforts.”

Why accountability mattered in 2025: With so many moving parts – regulatory change, budget pressures, shifting suppliers, fast-emerging technologies, strategic and ethical considerations around AI adoption – organisational friction rises and mistakes are made and repeated where ownership is unclear. The Bank of England’s 2025 stress tests and corporate governance debates underlined that institutions and companies that had clear lines of accountability were quicker to act and better at protecting stakeholders.

Ensuring clear and transparent responsibilities and parameters for each senior role avoids duplication and unproductive rivalry while empowering leaders to drive progress and manage risk more scrupulously. Encouraging leaders to visibly take responsibility – and share learning from any mistakes – fosters trust and creates a culture of psychological safety with clear structures to identify and assess any issues before they become systemic or blow up.

However, a major 2025 workplace study by Culture Partners, covering 40,000 respondents from across industries, found that many organisations remain unclear about who owns what, leading to a “crisis of accountability.”

What it means for 2026: Teams will be held to clearer end-to-end outcomes, not just activity metrics. Boards and leaders will increasingly insist on named owners for resilience plans, with escalation paths and transparent reporting.
Action: Replace ambiguous KPIs with clear outcome metrics and accountable owners; publish progress fortnightly to the senior team.

Read: This Forbes article on why employees are holding leadership to higher standards of accountability in 2025.

2025 reinforced that effective leadership is no longer defined by title or hierarchy. It is measured by clarity of purpose, adaptability, accountability and the ability to foster resilient, learning-focused cultures. Leaders who succeed in multi-layered environment prioritise people, embrace innovation with curiosity and rigour and make principled decisions even under pressures around uncertainty.

At Rialto, we help executives translate these insights into action. Through our executive coaching, outplacement and transition support, strategic advisory and leadership development programmes, we equip leaders to navigate career transitions, step confidently into new roles and strengthen their influence within organisations. Our approach ensures leaders can respond decisively to change, whether driven by AI, market volatility or geopolitical shocks, while maintaining focus on people, purpose, and sustainable outcomes.

Those who internalise these six leadership lessons of 2025 position themselves to lead with impact in 2026 and beyond. Rialto partners with leaders to turn insight into action, ensuring they are prepared to respond ethically, strategically and effectively in an unpredictable environment.

Transformation is now the default condition for growth-focused organisations. Whether driven by rapid digital innovation, continuous AI integration and recalibration, competitive disruption, regulatory shifts or strategic reinvention, modern businesses operate in a near-permanent state of change. For executives, the challenge is maintaining momentum while protecting the wellbeing and capability of their teams. Mastering this balance has become a defining leadership competency.

According to McKinsey, 70% of large-scale transformation programmes fail to deliver their intended value, with behavioural barriers, including resistance, weak sponsorship and inadequate change infrastructure, accounting for much of the shortfall. Bain & Company reports an even more sobering picture: only one in eight transformations meet their original ambition, while most experience some level of value dilution – figures unchanged for two decades.

The human cost is equally stark. In a global survey by Emergn, half of employees reported “transformation fatigue”, and 45% said the associated stress had led to burnout. Crucially, half of those experiencing fatigue had considered leaving their organisation. Failure therefore carries consequences far beyond the project itself—it diminishes trust in leadership and weakens organisational cohesion..

When people are overwhelmed, engagement falls, performance drops and trust erodes. More than half of employees feel that too much change is happening simultaneously, and 71% say they are overwhelmed by the volume of change in their roles. Even those not yet at burnout often show signs of chronic stress, including reduced satisfaction, impaired judgement and lower productivity.

To counter this, organisations must find equilibrium: preventing overwhelm while sustaining progress. When transformation is thoughtfully designed, with realistic targets, clear communication, visible milestones and strategic resource allocation, teams feel supported and energised rather than depleted. Groups that experience collaborative, well-paced cycles of change with intentional peaks and periods of recovery are better able to sustain the relentless rhythm of modern organisational life.

What to Expect in 2026

Looking ahead to 2026, several transformation trends are likely to intensify, and with them, the risks of burnout.

1. Generative AI and Automated Decision Workflows

Organisations will increasingly use generative AI to underpin decision-making, customer experience and operational processes. While the potential for efficiency is considerable, these shifts require new behaviours, redesigned roles and significant capability uplift. Without strong change leadership, AI initiatives may create confusion, destabilise teams and deepen fatigue. Over half of the employees surveyed in the Emergn research said AI-driven initiatives were increasing transformation fatigue, a sign of companies putting digital transformation in before properly preparing workforces. See our previous insights on AI-powered workforces and Leading in an Era of Agentic Intelligence.

2. ESG and Sustainability Imperatives

Environmental, social, and governance (ESG) imperatives will continue to reshape strategy, requiring greener supply chains, more transparent operations and more rigorous reporting. These changes demand both operational discipline and meaningful cultural evolution, not merely compliance.

3. Recalibration of Hybrid-Remote Operating Models

Hybrid work has moved from experimentation to optimisation. Organisations will further refine operating models, role expectations, productivity metrics and team structures.  Many are encouraging increased in-office presence to reduce silos, strengthen collaboration and intergenerational learning and mentoring. This will create ongoing organisational adjustment, particularly across globally distributed teams.

4. Ecosystem Partnerships and Platform Models

More organisations will build strategic ecosystems or platform businesses, partnering with technology firms, start-ups and new entrants. These transformations demand new governance new capabilities and new trust mechanisms, adding further layers of complexity.

Collectively, these forces mean 2026 is not simply another year of “large scale project’ transformation, it is likely to be defined by continuous, multi-dimensional transformation.

The Human Toll: Why People Burn Out

At the heart of transformation fatigue, executives must consider this psychological truth: humans have a strong preference for stability. Change disrupts mental models, routines and meaning. Sustained disruption accumulates into cognitive overload, diminishing engagement and increasing resistance

Middle managers can be particularly vulnerable. They translate strategic ambition into operational reality without always having the authority, time or clarity to shape the journey. When they become overstretched, entire transformation programmes stall.

Poor sequencing further compounds the strain. Anthosa Research shows that when organisations run more than seven major initiatives concurrently, failure rates climb to 83%. Prosci’s research highlights that frontline functions, Operations, Customer service, Sales, HR, experience the greatest change saturation.

Another common error is overburdening the same high-performers. “Star Players” are too often asked to carry disproportionate weight, leading to burnout and capability loss, while other talent remains underutilised. When organisations fail to manage human resources and capabilities deliberately and strategically, transformation efforts can stall. When too many initiatives run in parallel without deliberate resource management, engagement collapses and leadership sponsorship weakens.

Leading With Resilience: Key Principles for Executives

Senior leaders can protect teams, and themselves, from burnout by grounding transformation in a set of disciplined, evidence-based practices.

1. Diagnose deeply before acting

Begin with a rigorous diagnostic to understand organisational readiness, historical change load and pressure points before moving on to a bold vision.  Leading companies (Ford, Adobe, T-Mobile, Virgin Australia) explicitly manage organisational energy from the outset, recognising that it is often the true governor of transformation pace.

2. Pace change intelligently

Accelerating too fast is a common mistake. McKinsey finds that organisations adopting structured, sequenced transformation actions can more than double their success rates. Build in hybrid phases where old and new systems run in parallel, giving people space to adapt.

3. Communicate relentlessly and with purpose

Ambiguity is the enemy of transformation.  Teams need repeated clarity on the rationale, process, expectations and available support. Recent research shows that only 53% of managers and 40% of employees understood the transformation underway—despite 68% of leaders believing they had communicated clearly.

Employees expect senior leaders to articulate the vision, but rely on line managers to translate it into personal relevance. Both layers must be aligned.

4. Empower people and build ownership

One of the most effective ways to reduce burnout is to involve people meaningfully. When people have a voice and help shape change, they’re more invested and better able to absorb the disruption. Create structured forums where concerns can be voiced without fear. High-trust environments result in employees being 2.6 times more capable of absorbing change.

5. Manage capacity

As a leader, you must be ruthless about prioritisation. Transformation pressure naturally invites competing demands. Decide what must pause while new ways of working emerge. It is essential to be able to deprioritise “business as usual” when transformation peaks and communicate these choices clearly.

6. Celebrate early wins.

Small victories help sustain energy and provide tangible proof of progress. Recognising teams publicly for achieving milestones fuels morale and provides a narrative of collective achievement. Research by Bain shows that companies using aspirations rather than benchmarks to set goals (and celebrating progress toward those aspirations) maintained organisational energy more effectively.

7. Lead without neglecting yourself

You set the tone, so you must also guard your own resilience. That means setting boundaries, protecting time for rest, and crucially, building a network of support. As pressures mount, consider executive coaching or peer-group reflection to maintain perspective and prevent burnout.

The Role of Coaching and Reflection

Transformation leadership is highly demanding. Executives who engage in structured reflection whether through executive coaching, peer groups or mentorship, tend to lead with greater clarity and endurance.

One of the biggest mistakes executives can make in times of intense pressure is to cut out any activities they see as luxury and invest all their energy and time into the project as deadlines loom and inevitable complications arise.

The most confident, assured and effective leaders recognise the value of stepping back to allow both downtime – during which creativity can thrive, ideas can percolate and problem-solving can be more effective – and time for honest appraisal with a trusted and knowledgeable sounding board/mirror.

The latter will provide confidential space to test tricky decisions, process doubts and sustain strategic discipline. A coach helps you recognise when you’re pushing too hard or losing balance, and supports building a leadership practice that is resilient over a career, not just a single project or even position.

Research with successful transformation leaders (including CTOs at Dell Technologies, Desjardins, International Paper and global insurers) consistently finds that external perspective helps leaders maintain the energy required for multi-year change journeys. These leaders emphasise that energy needs to be cultivated and managed deliberately. Coaching provides structure for that discipline.

Practical Habits to Build Resilience

A few regular practices can materially improve transformation endurance:

Weekly priority reset: At the start of each week, pick three transformation-critical outcomes. Everything else is secondary. Successful transformations build change into the company’s operating rhythm rather than treating it as separate from normal business.

Frequent feedback loops: Hold fortnightly check-ins with key stakeholders and use them to engage with teams; gauge morale, anxieties, confidence and buy-in. This helps leaders spot the early signs of change fatigue: shorter tempers, physical exhaustion, increasing absence, falling energy and enthusiasm, rising anxiety and resistance, both active and passive. Praise individuals and teams when it is due but avoid singling them out for blame. Where things have gone wrong, explore what can be learned and invite feedback on how they can be improved.

Share progress through visual symbols: Use dashboards, graphs and other visual artefacts to mark smaller wins and track progress. Seeing movement and momentum builds hope and endurance. This is particularly important at the transformation midpoint, when energy is most likely to dip.

Built-in recovery: After major phases, intentionally pause for consolidation, learning and a reset. Encourage teams to reflect on what went well and how challenges were met. Companies achieving successful transformations treat change as continuous but rhythmic, with periods of intensity followed by consolidation.

Leading for the Long Game

Transformation is no longer episodic.  It is a permanent feature of corporate life that is not delivered by intensity but by endurance. Leaders who guide their organisations through meaningful change without burning out their teams understand that pace, rhythm, and energy are strategic assets. They resist the lure of heroics, building ways of working that enable people to contribute at a high level without running on empty.

Leading for the long game means treating change as an ongoing capability, something that must be fuelled, protected, and renewed over time. This requires strategic clarity, psychological insight, disciplined prioritisation and the humility to recognise human limits. It calls for an operating rhythm that creates space for focus rather than overload, setting goals that stretch without overwhelming, and the deliberate management of organisational energy with the same seriousness applied to budgets and timelines.

The long-term value of getting this balance right is immense: resilient teams, meaningful capability uplift and the organisational stamina to transform again when the environment shifts.

If you are leading transformation now or planning one for 2026, this is the moment to invest in thoughtful design, purposeful communication, coaching and reflection. These are not ancillary, they are foundational to sustainable, repeatable success.

The Executive hiring landscape has become increasingly rigorous and formalised. While senior appointments have always involved multiple stakeholders and careful vetting, today’s process has evolved into an even more highly structured, extended assessment that typically lasts three to eight months from initial contact to offer. Today’s executive searches routinely include four to eight formal interview sessions, psychometric testing, scenario simulations and board presentations, with each stage designed to assess specific leadership competencies and cultural fit, reducing the risk of costly mis-hires.

The most senior positions are rarely advertised publicly. Instead, Executive job opportunities typically emerge through several distinct channels. Executive search firms conduct strict confidential targeted searches on behalf of Boards, approaching candidates who may not be actively seeking new roles.  According to industry data from 2024, 70% of executive hires in the UK now result from personal referrals and networking, whether through board connections, industry relationships or introductions from trusted advisors. A smaller proportion then result from internal succession planning or direct approaches by CEOs and board members to known candidates.

This dynamic, which is also referred to as the ‘hidden job market’, leaves thousands of qualified executives seeking opportunities in the open market, while roles circulate quietly within closed networks.  For executives outside these circles, accessing such opportunities therefore demands deliberate relationship-building, consistent visibility within their sector and active engagement with both executive search professionals and peer networks.

Boards are also increasingly hiring externally, particularly for transformation mandates. This preference for outside leadership during major change initiatives means panels now probe change management capability and crisis readiness with far greater intensity than in previous decades. Short CEO tenures and succession planning failures have made boards acutely sensitive to early missteps.

Mastering executive interviews requires a structured approach to storytelling that reveals strategic thinking, not merely a list of accomplishments. The Rialto CAREER Framework is one of the interview frameworks adopted by Executives when working with Rialto to achieve executive transition success.

What Panels Are Evaluating at Executive Interviews

Modern C-suite and senior leadership interviews assess six core dimensions:

Diagnostic Thinking: Panels want to observe how candidates structure complex problems when faced with incomplete or conflicting information. The question “What would you change about our business today?” tests your ability to assimilate research quickly, identify key leverage points and propose sequenced interventions. Panels will be evaluating analytical thinking more intently than specific recommendations. Solid preparation into the company’s pain points, market position, competitors and potential opportunities will form an essential foundation to a credible and relevant response.

Transformation Execution Track Record:  Questions such as “Why are you the best person to lead change here?” and “Tell us about a transformation you led end-to-end” require tangible evidence of sustained organisational change with measurable outcomes. Panels distinguish between executives who merely participated in transformations and those who led them. They listen for ownership language, clear resource decisions, stakeholder management sophistication and the ability to sustain momentum through resistance.

Board Partnership and Stakeholder Fluency: Questions like “How would you work with this Board and its key stakeholders?” or “What will you need from us?” evaluate your understanding of governance dynamics. Weaker candidates focus on what they will provide to the board. Strong candidates explain what they need from the board, demonstrating understanding that executive success requires board support, clarity on authority boundaries and aligned expectations. This reveals an understanding that executive roles involve genuine partnership rather than hierarchical reporting.

Digital and AI Literacy: Questions along the lines of “How have you used data and AI to improve outcomes while managing risks?” have become standard across executive interviews. Panels evaluate three layers: practical fluency with AI applications, governance mindset regarding risk and ethics and ability to lead teams through technological adoption. A strong response demonstrates hands-on experience, quantified business outcomes and awareness of implementation challenges including employee resistance, data quality issues, model limitations, managing disruption and ethical and security imperatives.

Learning Mindset and Adaptive Capacity: When asked, “Tell us about a major failure…what did you learn and how did you change?”, panels are seeking to determine learning mindset, courage in admitting to failures and capacity to analyse and recalibrate for success.  Strong candidates take ownership of mistakes, show evidence of behavioural change and display courage in acknowledging limitations.  The US variant, “What is the last thing you unlearned as a leader?” probes similar territory, evaluating agility to adapt and adjust and abandon outmoded approaches and evolve with shifting organisational needs.

Financial and Commercial Judgment: Questions about resource allocation, margins and ROI test whether a candidate can connect strategic initiatives to financial outcomes.  In many contexts, there is often a sharper emphasis on revenue growth, profitability and measurable value creation. Strategic narratives should be firmly anchored in sound financial logic demonstrating fiscal discipline and business acumen.

The CAREER Framework for Executive Interviews

The Rialto CAREER Framework provides Executives with a structured approach to articulating complex experiences and demonstrating strategic leadership capability under interview pressure. It ensures that your responses reveal not only what you have done, but how you think, make decisions and evolve as a leader.

CAREER stands for Context, Accountability, Roadmap, Evidence, Evolution and Relevance, and each component aligns directly with what executive panels seek to evaluate.

Context enables you to establish the analytical foundation of your story, demonstrating diagnostic thinking, commercial awareness and understanding of the wider business environment.

Accountability clarifies your ownership and leadership scope, separating those who truly led change from those who simply contributed.

Roadmap reveals your strategic sophistication, the decision-making logic, prioritisation and sequencing that underpin transformation success.

Evidence anchors your narrative in tangible, measurable business outcomes, confirming your ability to connect strategy to commercial impact.

Evolution exposes your learning mindset and self-awareness, showing that you grow through experience and can adapt to future challenges.

Relevance ensures your story resonates with the interviewers’ own organisational context, demonstrating that you’ve done the work to understand their challenges and culture.

Executives consistently find the CAREER Framework powerful because it evidences leadership maturity in real time. It allows interviewers to distinguish between executives who merely participated in organisational success and those who genuinely drove it. When applied effectively, it demonstrates analytical clarity, ownership mentality, commercial judgment and the agility to lead through complexity and change.

For further information on the framework, click here.

Preparing for Executive Interview

Applying the CAREER Framework begins well before the interview. Preparation involves researching the organisation in depth, understanding its market position, governance structure, current strategic priorities and performance challenges. From this insight, it is useful to identify three or four signature leadership stories that collectively illustrate different aspects of your capability: transformation delivery, people leadership, crisis management and/or financial turnaround. Then, structure each story using the CAREER elements as a mental map.

During the interview, draw on this structure naturally rather than reciting a script. The goal is to sound conversational and responsive, not rehearsed. Use CAREER as a flexible architecture to organise your thinking, allowing you to adjust emphasis depending on the interviewer’s focus. Listen actively, expand on areas of interest and maintain relevance by continually linking your experience back to their business context.

A practical way to internalise this approach is to choose one significant leadership experience and practise framing it using CAREER. Describe the Context – the strategic challenge, market dynamic or governance constraint. Define your Accountability – what you were specifically responsible for delivering. Outline your Roadmap – the key decisions, interventions and rationale behind them. Present Evidence – quantifiable results, metrics or stakeholder outcomes that demonstrate success. Reflect on your Evolution – what you learned and how your leadership evolved. Finally, articulate Relevance – how this experience directly connects to the organisation or role you are targeting. Rehearse it as a natural conversation lasting three to four minutes, ready to expand or shorten depending on interviewer cues.

By mastering this structure, executives move beyond listing achievements to showcasing how they think, lead, and grow which is precisely what executive Interviewers are looking for in today’s complex leadership landscape.

The CAREER Interview Advantage

Executive interviews are won through revealing authentic strategic capability, NOT rehearsed perfection. Panels want to see candidates think on their feet, apply their knowledge and ask the right questions to gain contextual understanding. The CAREER framework provides the architecture for demonstrating depth while maintaining conversational flow.

Candidates who master this framework stand out because they reveal how they think, how they lead through complexity and how they learn from experience, precisely what organisations need as they navigate sustained uncertainty and transformation.

Remember, panels are not buying your past, they are buying your future capability. CAREER helps to translate experience into evidence of that capability.

Preparing for executive interview is just one part of any executive career and of the work Rialto do with our global C-suite and senior leadership clients.

Rialto has 85 consultants specialising in different aspect of executive transition, executive outplacement, leadership development, business transformation and AI readiness and adoption, supporting leaders globally to achieve meaningful career outcomes.

In the first two parts of our AI skills special, we explored why and how executives should build continuous AI learning into leadership development programmes.

This third and final part turns to an equally – if not more – critical issue that will define which organisations truly thrive in this fast-moving era: preparing the workforce through upskilling, rather than simply seeking to reduce headcount.

When used responsibly, under secure and ethical supervision, and embedded across all levels of the organisation, AI capability and confidence can combine to act as rocket fuel for performance and innovation.

AI has the potential to serve as a highly responsive, interconnected nervous system that touches every part of the business. It can bring data-driven insight to the very core of strategy – from how the company goes to market, to how it manages talent and responds to competitive pressures.

While it’s essential that implementation is led by an AI-literate CEO and CFO, supported by functional leaders, any blockages caused by ineffective or unsafe use across the wider organisation will limit progress, ROI, and stakeholder confidence.

According to McKinsey, C-suite leaders are 2.4 times more likely to cite employee readiness as a greater barrier to AI adoption than their own skills. Yet employees are already using GenAI tools three times more than their leaders realise.

For executives and HR leaders facing this disconnect, and the broader disruption required to realise AI’s full potential, the first step is to address a structural challenge: most employees lack the cognitive tools to thrive in transformed workflows, while those leading workforce strategy often lack the diagnostic tools to measure capability gaps accurately.

Research from McKinsey and the World Economic Forum continues to highlight skills shortages as the single biggest obstacle to organisational transformation. Sixty-three percent of employers see capability gaps as a major barrier through to 2030. Despite this, many still look externally for talent that could be developed internally, often at lower cost and with less disruption, while laying off staff displaced by automation.

This pattern reflects an absence of understanding and systematic workforce assessment that risks destabilising businesses, society, and even the wider economy.

A more constructive approach is to audit workforce skills against current and future objectives – uncovering untapped potential, latent strengths, and opportunities to enhance capabilities from within.

Establishing a credible baseline: The audit framework

Assessing workforce readiness for technological change requires moving beyond traditional talent assessment methods. Standard competency frameworks, based on current job roles, simply don’t provide the data organisations need in a constantly evolving technological environment.

Instead, a multidimensional evaluation is needed, one that captures three critical dimensions: technical proficiency in emerging tools, cognitive flexibility across domains, and the ability to adapt behaviour under uncertainty (in other words, resilience, agility, and adaptability).

An effective audit should map current capability against anticipated requirements around 18 months ahead, not just today’s job descriptions. This requires cross-functional collaboration and open data sharing.

Organisations should conduct this assessment through structured interviews with functional leaders rather than relying exclusively on self-reported surveys These discussions reveal not only competence but also psychological readiness and appetite for change. The distinction matters: a moderately skilled employee with high motivation can outperforms technically proficient colleagues resistant to new ways of working.

The audit should also reflect the organisation’s unique context. For instance, manufacturers may need capability in computer vision or predictive maintenance; customer service teams in natural language processing and data-driven platforms; finance teams in modelling and causal inference; and content creators in understanding the limits and verification needs of generative models. This level of specificity helps avoid the all-too-common pitfall of theoretical training disconnected from practical reality.

Distinguishing trainable from structural capability gaps

Not every capability gap can be bridged through training alone. Some deficits stem from deeper factors, such as cognitive orientation or the nature of experience built up over years of professional practice.

For example, sometimes individuals who have constructed careers through hierarchical advancement within narrowly defined specialisations can find it difficult to sustain the continuous reorientation that technological change demands. Addressing these cases requires sensitivity and support, not blame. Senior executives may benefit from targeted leadership development and coaching to strengthen the soft skills that underpin digital and AI-driven transformation.

Recognising the difference between trainable and structural capability gaps allows for more informed decisions about retention, redeployment, and recruitment. The World Economic Forum highlights analytical thinking, resilience, and cognitive flexibility as the most in-demand competencies for 2025, qualities that require cultural reinforcement across the organisation, not just classroom instruction therefore a task which can be more complex and challenging than hard skills training.

Organisations that take this nuanced view can avoid costly mistakes such as unnecessary restructuring or over-automation, which can lead to anxiety and disengagement.

Audits should therefore include behavioural indicators of adaptability beyond anything that standard competency assessment can provide such as how individuals have handled previous operational change, their curiosity about unfamiliar domains, and their willingness to self-learn. These behavioural markers often predict success in technological transitions better than traditional performance measures.

Identifying roles requiring structural transition

Up to 40% of current roles could be displaced by AI, meaning some restructuring will be unavoidable. Certain jobs face genuine obsolescence, not just transformation requiring skillset adjustments. Research from Adzuna demonstrates that graduate positions, apprenticeships, internships and junior roles without degree requirements have fallen by approximately 32% since November 2022, now comprising 25% of all UK job listings down from 28%. These shifts call for honest reflection rather than optimistic retraining narratives.

The strategic question organisations must confront is whether investing resources in retaining individuals in functionally declining positions serves institutional or individual interests. Often neither party benefits from extended employment in roles that gradually diminish in scope and compensation. Acknowledgment of this reality, coupled with genuine transition support including financial security, career coaching and skills assessment for alternative employment, can serve departing employees better than struggling on in positions of diminishing significance.

Roles requiring such structural transition should be identified through financial modelling rather than hope. Evaluate which functions will consolidate through automation or shift to fundamentally different competencies within two years. The results will support workforce transition planning with greater honesty than aspirational but unevidenced upskilling narratives.

Building continuous learning architecture aligned with strategic objectives

Organisations that navigate technological change successfully tend to share one structural feature: learning is embedded into day-to-day operations, not treated as a separate HR function.  This approach transforms learning into a process of structured problem-solving within real work contexts, supported by data and feedback loops.  Agentic AI platforms can support and augment this process.

This requires establishing a dynamic skills architecture that maps current organisational competencies against anticipated future requirements at the level of specific work functions rather than abstract capabilities. This might involve identifying precisely which analytical techniques the finance team will require, which communication protocols the sales force needs, which quality assessment procedures the manufacturing operation demands. This specificity transforms learning from generic skill acquisition into targeted capability development demonstrably connected to organisational performance.

Implementation involves designating accountability for this architecture at the executive level, not within training departments. The Chief Financial Officer bears responsibility for ensuring the analytical and technological capabilities necessary for projected operational models. The Chief Operating Officer owns capability alignment in production operations. This assignment of accountability could prove more important than the quality of any particular course offering.

Organisations should expect that roughly 70% of capability development will occur through structured problem-solving within actual work contexts rather than formal instruction. The remaining 30% can benefit from targeted coursework, typically micro-credentialed programs of four to eight weeks rather than extended academic sequences. Timing matters. For example, technical instruction proves most effective when delivered immediately before operational application rather than months in advance. Lessons that can be applied quickly and practically help contextualise and reinforce learning.

Sustaining Organisational Adaptability Beyond Current Change Cycles

The capability requirements focused upon in 2025 may be less relevant by 2027 while specific technical competencies in demand will shift and soft skills that differentiate performance will evolve. Organisations that construct learning systems flexible enough to accommodate successive technological transitions outperform those that optimise for current requirements.

This flexibility requires close collaboration between HR leadership and executive coaching. Coaching relationships with senior leaders catalyse the self-awareness and cognitive flexibility that enable them to lead organisational evolution, minimising any resistance grounded in lack of confidence or fear of displacement.

Individuals who engage authentically with executive coaching demonstrate markedly greater capacity navigating structural change, maintaining team engagement during transition and modelling the adaptability organisations require of their broader workforces.

The investment in executive coaching during periods of material technological change generates returns that extend well beyond individual leader development. It establishes organisational culture where development is seen as built in rather than remedial intervention, where explicit acknowledgment of capability gaps reflects analytical maturity rather than professional vulnerability and where learning partnerships with external experts enhance rather than threaten internal capability building.

Organisations that embed executive coaching alongside workforce auditing and continuous learning architecture can significantly outpace competitors approaching these elements separately. The senior leader who has examined their own constraints and potential through coaching partnership will appear more credible when advocating difficult organisational transitions. A leadership team aligned through shared development experience makes more coherent strategic decisions regarding workforce capability realignment. Organisational cultures that show senior leadership engaging continuously in external refection and development normalise the adaptability the organisation requires throughout its workforce.

Measuring what matters: linking development to performance

One of the most common pitfalls in workforce development is failing to connect learning initiatives to measurable business outcomes. Upskilling only delivers real value when employees can apply new capabilities directly to their roles and when the impact is visible to leadership, stakeholders, and the board.

Measurement systems should therefore track how specific skill investments translate into performance. For example, if customer service functions deploy natural language processing tools, measurement systems should track what different interactions and tools are designed for  and what quality improvements were achieved. If finance teams develop advanced modelling capabilities, systems should quantify how these capabilities improved forecast accuracy or decision quality.

This level of specificity requires that HR leaders and finance leaders collaborate to build measurement frameworks rather than each maintaining separate administrative systems. The collaboration may reveal misalignments between capability investments and actual strategic priorities and enable careful and ongoing recalibration.

Ultimately, auditing workforce readiness for AI isn’t just about tracking current skills against job descriptions. It’s about honest evaluation, identifying which roles can evolve, which require transition, and how learning can be embedded into operations and linked directly to performance outcomes.

Organisations that approach this challenge with rigour, empathy, and transparency will build the resilience and agility needed to thrive through successive waves of technological change.

If you would like to discuss strategic planning of upskilling and reskilling needs for individuals or teams, Rialto has 85 consultants specialising in every aspect of organisational transformation and executive leadership development. Please do get in touch to arrange an initial consultation.

In this second part of our three-part series on upskilling for the AI era, we explore the distinct AI skills needed by today’s executives and how they fit into any ongoing programme of professional development.

Whether making a personal executive transition, receiving executive outplacement or driving organisational transformation, AI literacy is now an essential skill that should be considered as part of any development or change initiative. Executives who integrate AI mastery into a continuous learning agenda, spanning both personal and organisational transformation, will remain competitive and relevant in a rapidly evolving landscape.

As highlighted in our previous insight on how executives can stay ahead of the AI curve, of the $30 billion spent on AI globally, only 5% is seeing a return on investment. T his may be partly due to metrics and measurements not catching up with what success looks like, but progress is too often also impeded by executives’ glacial response as the technology accelerates exponentially in real time.

As former Cisco CEO John Chambers observed, half of executives “won’t have the skills to adjust to this new innovation economy driven by AI because they were trained to move at the speed of a five-year cycle as opposed to a 12-month cycle.”

Senior leaders therefore need to continuously reinvent themselves to stay aligned with the pace of technological evolution.

Building the right AI competencies

Below, we look at specific AI skills sets for executives who face distinct requirements when building AI competency. This guide provides an overview of core AI skills executives should consider acquiring and examines how training can be incorporated into broader leadership development strategies.

Skill 1: AI Strategy, Appraisal and Value Framing

Why it matters: Executives must identify where AI creates measurable return, build business cases and sequence pilots into scaled capability, recalibrating and updating according to technological advances which may otherwise outrun specific projects and lead to shareholder value erosion through misaligned investments or missed opportunities. Leaders who map use cases to financial outcomes gain competitive advantage.
Related competencies: Strategic foresight, scenario planning, critical and creative thinking.

Skill 2: AI Governance, Risk and Compliance

Why it matters: Boards and C-suites are prioritising governance, auditability and regulatory readiness amid a fragmented regulatory landscape, where inadequate oversight can expose organisations to severe fines or reputational damage from incidents such as bias scandals. Governance is a rising board agenda item, helping attract top talent through ethical practices and building resilience by managing the inherent complexities of scaling AI, while fostering ESG alignment and stakeholder trust.
Related competencies: Stakeholder collaboration, ethical decision-making, resilience.

Skill 3: Data Literacy and Decision Science

Why it matters: Executives who interpret model outputs, ask the right questions of data teams and set measurable KPIs are more effective sponsors of AI projects. This skill facilitates literacy in relation to decision frameworks, enabling navigation of volatile markets and bridging analytical gaps for informed sponsorship, particularly when aligning with UK initiatives around data protection and digital information that demand robust, privacy-conscious handling.
Related competencies: Data governance, analytical and critical thinking, cultural sensitivity.

Skill 4: Generative AI Literacy and Prompt Design

Why it matters: Executives need practical fluency with generative tools so they can assess vendor claims, pilot real workflows and set safe guardrails, unlocking productivity gains while mitigating risks such as hallucinations leading to flawed decisions or unintended outputs. Amid the rise of multimodal trends, this becomes essential for integrating tools like enterprise Copilots and scaling pilots without misuse, in line with UK recommendations for safe adoption that emphasise responsible experimentation and organisational safeguards.
Related competencies: Strategic foresight, ethical decision-making, change management.

Skill 5: People Leadership for Augmented Work

(Part three of this series will examine workforce upskilling.)
Why it matters: Adoption failures arise when leaders treat AI as a technology or tooling problem rather than one of people and process change, overlooking the human elements of redeployment and upskilling that can enhance team creativity and improve retention in blended workforces. This fosters resilience in hybrid AI-human environments, addressing the transformative shifts in job roles and skills needs, and ties into broader workforce strategies. Leadership skills supporting redeployment and upskilling are flagged in employer surveys as essential.
Related competencies: Strategic workforce foresight, stakeholder collaboration and influence.

Skill 6: Responsible AI and Ethics

Why it matters: Bias mitigation, explainability and responsible deployment are areas where executives must make trade-offs between speed and trust. Courses increasingly include practical governance frameworks to support these decisions.
Related competencies: Ethical judgement and integrity, strategic foresight and systems thinking.

From learning to leadership practice

Developing the above competencies requires structured and intentional learning. The next step is therefore understanding how executives can build and apply them effectively. While AI learning opportunities are widely available, their effectiveness depends on context and application. As with learning a new language, the greatest value comes not from theory alone but from practical use and cultural understanding.

A range of flexible programmes now support executives in building these capabilities. Some offer on-demand, video-based content with downloadable certification (e.g. LinkedIn Learning, Microsoft, DeepLearning.AI). Others blend live instruction with self-guided modules or in-person engagement.

However, without strategic framing, such courses may lack the nuance required to translate learning into leadership impact. Incorporating executive coaching or providing structured professional development can help align AI learning with transition goals, business transformation objectives, and broader leadership capabilities such as ethics and human-first implementation.

Learning formats: matching goals and learning style

A wide spectrum of AI learning options is available to meet different executive needs, schedules, and learning preferences. To optimise the benefits of AI education, Rialto consultants recommend beginning with compact, high-quality micro-courses for immediate familiarity, followed by targeted intensive programmes aligned to sector or functional priorities. Ongoing micro-learning and peer discussion groups can then sustain progress.

Bite-size and micro-learning courses provide rapid, low-cost access to foundational AI literacy, typically requiring a commitment of four to twenty hours. They are particularly effective for boards and senior teams seeking immediate fluency, offering practical exposure to areas such as prompt engineering and vendor assessment. These short, modular courses, available from providers such as DeepLearning.AI and LinkedIn Learning, make learning highly accessible and inclusive. However, they generally offer limited depth in areas like governance, data architecture, and strategic trade-offs, and they tend to provide fewer networking opportunities or weaker credentials. As a result, they are best suited for establishing baseline literacy, developing tool-specific competence, or supplementing more intensive development initiatives.

For leaders seeking deeper engagement, intensive executive AI programmes offer a more comprehensive approach, often spanning three to eight weeks. These programmes address advanced themes such as AI governance, data architecture, vendor strategy, and organisational change management, while also enabling participants to build peer networks with other senior leaders. Providers such as MIT Sloan, Harvard Business School, Oxford, and Wharton offer faculty-led experiences with access to implementation playbooks and sector-specific case studies. Although these programmes require a higher time and financial investment, they provide the strategic depth and board-level perspective essential for developing AI maturity across organisations and for positioning executives for future leadership transitions.

Sustaining relevance through responsible AI Leadership

As AI continues to redefine the leadership landscape, executives who commit to continuous, structured learning will be best placed to lead responsibly, transform their organisations, and remain relevant through disruption. AI fluency is not an isolated technical skill; it is now a cornerstone of strategic foresight, ethical leadership, and cultural adaptability. Embedding AI capability within broader professional and organisational development enables leaders to make informed, values-driven decisions that build resilience and trust in a rapidly evolving economy.

Rialto supports this journey through its programme of complimentary invitation-only events  exploring AI and leadership topics. With 85 consultants operating globally, Rialto helps executives strengthen leadership capability, navigate transition, and align AI learning with strategic transformation goals.

Executives can also contact our research department for examples of leading AI learning programmes and providers—including Harvard Business School, LinkedIn, Deloitte, and others—that Rialto clients have successfully undertaken. To learn more, email research@rialtoconsultancy.com.

As we enter the final stretch of the business year, leaders across industries and geographies are navigating a critical transition, from Q3’s build-up to Q4’s culmination. While the calendar may differ across global regions, this period consistently represents a strategic inflection point: a chance to harness momentum, sharpen focus and lead with renewed intent.

For those in the UK and Europe, the past weeks may have included time for reflection, whether through a formal break, a shift in pace, or simply the mental space to zoom out. For others, it may have been business as usual, with teams accelerating key initiatives to set up a strong Q4. Regardless of how the quarter unfolded, what matters now is how leaders use this moment to elevate impact and finish the year not just delivering results, but growing as leaders.  How leaders show up now will determine how they finish the year – and how they’re positioned to lead into what’s next.

Navigating Q4: Leading Through Complexity and Change

As organisations contend with fast-changing market dynamics, shifting stakeholder expectations and increased operational pressure, Q4 places leaders squarely at the intersection of delivery and disruption. Strategic plans made earlier in the year may now need recalibrating. Budget scrutiny tightens. Execution timelines compress. And yet, the need for clear, forward-facing leadership has never been more urgent.

Those at the top are expected not just to hit targets, but to inspire confidence, create clarity in uncertainty and drive initiatives forward amid competing demands. From economic headwinds to internal transformation efforts, the pressure is multi-dimensional. But high-performing leaders use this pressure to sharpen focus, align teams around what matters most and lay groundwork for sustainable growth.

Leading through complexity demands operational control which means maintaining perspective, identifying areas where adjustments are needed and redirecting resources if necessary, and ensuring decisions reflect both short-term imperatives and long-term strategic intent.

For some sectors, such as retail and sales, Q4 can represent a seasonal push to meet rising pre-Christmas demand while companies operating within or trading with regions approaching the end of their fiscal year may be under pressure to finalise deals and increase enterprise transactions as deadlines approach for budgets to be spent or allocated. Leadership may need to channel resources and focus into B2B or B2C sales.

For other regions, where fiscal year ends in April, sustaining energy and engagement levels and a focus on continuing growth towards the Q4 year-end can be a priority.

Q4 as a Career Catalyst: Elevating Personal Leadership Impact

This final stretch of the year is also a critical moment to reflect on personal positioning and career trajectory. In times of heightened visibility, how a leader engages, where they focus their time and how they influence outcomes all contribute to their broader leadership brand.

Q4 should be viewed not only as a time to deliver on organisational performance goals, but to elevate personal leadership impact. Every business-critical initiative, board interaction, or cross-functional collaboration becomes a platform for growth, influence and development. Effective leaders take ownership of their narrative, using this period to demonstrate agility, decisiveness and the ability to lead through pressure

Training and development initiatives can easily fall by the wayside at this point of the year as energy levels are drained, and pressure builds into and through Q4 to ensure KPIs and revenue targets are hit. Forward-thinking leaders, however, will have a plan for year-round development, and will be thinking about how they can build time into their busy schedules to focus on their own performance and growth even through this critical period.

Self-awareness is key. Step back regularly to consider where you are investing energy, how your leadership is being perceived and what capabilities you need to build to remain effective. The leaders who thrive long-term are those who take stock, invite collaboration and constructive feedback and listen. Only then can they continue to challenge themselves to constantly improve their own performance and productivity and to be better leaders.

Staying Relevant: Preparing for the Leadership Demands of Tomorrow

Q4 requires both tactical delivery and strategic foresight. With the business landscape constantly evolving, future relevance can’t be left to chance. Leaders must now assess whether their current capabilities, mindset and networks are fit for the future.

Remaining relevant means actively developing the skills, insight and influence required to lead in a world where agility, innovation and cross-functional leadership are increasingly non-negotiable. This is the time to act on that feedback, build strategic relationships and stretch your personal contribution into new areas. It’s about identifying where you are adding value now, but also where your impact can grow next and planning actionable steps to ensure continuous personal and professional development and expansion of your influence and expertise.

Leaders who embrace Q4 as an opportunity to evolve, not just perform, are the ones who set themselves apart. They move from delivering results to shaping what’s possible.

How Rialto Supports Leaders to Deliver and Evolve

At Rialto, we work with senior leaders navigating exactly these moments, where delivery and transformation go hand in hand. Whether you’re refining your Q4 strategy, seeking to amplify your leadership impact or planning for the next chapter in your career, we help turn intention into implementation.

Our work is focused on aligning individual leadership ambition with business strategy, providing the tools, insights and frameworks to stay relevant, impactful and future-fit.

As you lead through Q4 and into a new business cycle, it is critical to plan strategically how to close the year for your organisation optimally, but high-performance leaders will also be consciously and constructively setting the stage for their own self-improvement and career development.