But amid this disruptive landscape lie opportunities. Opportunities investors can capture by managing short-term volatility and investing in quality.

For Willem Sels, Global Chief Investment Officer at HSBC Global Private Banking and Wealth, a progressive leader is one key characteristic of a quality company. It will also have a strong market position to protect profit margins and handle inflation, and a solid balance sheet so it can borrow to invest or acquire. 

“We need management that is imaginative enough to think about solutions,” Sels says, “and which will look forward to understand the changes that are happening in the world and foresee how they need to adapt.”

Why we need ‘visionaries’

Aside from digital transformation and the sustainability revolution, there are other big changes and disruptive trends happening that leaders need to factor into their long-term plans. CEOs will be asking themselves questions like: 

• Will the tightness in the labour force last? 
• How can I build up my company’s reputation to attract the best talent as competition increases?
• Should we build a new factory closer to home?

“All of these things require years of effort, so you need to anticipate those changes or react very quickly and then stick to that and invest to gain and maintain a competitive edge,” says Sels.

For instance, post-pandemic, geopolitical conflicts are disrupting supply chains, and the rising cost of fuel and transportation are filtering down to the cost of goods. How are companies adapting to that? One way is nearshoring, that is, bringing manufacturing “back home or next door”. 

“You can’t build a factory in six months, so as a CEO you have to think about those longer-term challenges, and supply chain reorientation and sustainability are certainly part of those,” says Sels.

Fiona McKay, founder and managing director of Lightbulb Leadership Solutions, agrees that the best CEOs will be “visionaries, who can see and anticipate and back themselves to shape organisations that meet the needs of a changing world.” They will also need to engage all their stakeholders in their plans if they are to achieve their goals, which means getting investors, customers, employees and the wider community on board.  

“We need CEOs to be pioneers – really brave visionaries of the future who are prepared to take us into new territories,” she says. “The only way we can back those innovative leaders is if their vision is compelling enough to make it that everybody is an equal shareholder on that journey. And you can be a great innovator as a CEO, but if you haven't got that piece of the puzzle, you will fail.”

A people-first approach

An organisation’s human capital is crucial too: research shows that a diverse labour force will have diversity of thought, making them more adaptable and less prone to mistakes. McKinsey found that companies in the top quartile for gender diversity on executive teams, for example, were 25 per cent more likely to achieve above-average profitability than companies in the fourth quartile².

Leaders should also be prepared to upskill their employees to meet the challenges of a fast-changing world.

“A people-first approach to leadership is obviously the right thing to do, but it’s also good business, because we are in an environment where unemployment is very low and therefore the balance of power is shifting somewhat towards the workforce,” notes Sels.