In energy, this is already visible: infrastructure limits, volatile policy signals, capital discipline, and rising demand from electrification and AI are narrowing the range of viable choices. These constraints are shaping geopolitics, technology, and corporate strategy simultaneously.

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Against this backdrop, the defining leadership challenge of 2026 is not uncertainty alone, but the widening range of plausible outcomes leaders feel compelled to plan for – and the temptation to mistake unpredictability for a loss of agency.

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This is being driven above all by US behaviour, interacting with a world already under strain from war, technological disruption, and institutional weakening.

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The leadership challenge that follows is specific and acute. The problem is not a lack of scenarios, but a surplus of them. Wars may expand or stagnate. Institutions may fracture or adapt. Technologies may transform work faster than organisations can absorb – or consolidate more slowly than expected. Actions once considered unthinkable for decades are now at least discussable. Leaders are being asked to hold all of this at once.

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At the same time, it is important not to overstate what will actually change on the ground in 2026. For all the noise, many realities will remain stubbornly familiar. Authoritarian systems will persist. Capital will remain cautious. Peace deals may be announced and unravelled without fundamentally altering underlying dynamics. Volatility will be extraordinary – tariffs on and off, rhetoric aggressive, threats credible enough to demand attention – but much of it will be episodic rather than transformative.

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This tension creates the central leadership risk of 2026: confusing unpredictability with powerlessness. When everything feels in flux, the temptation is to overreact, hedge everywhere, or defer difficult choices. The task for leaders is not to predict which scenario will prevail. It is to remain disciplined about attention, clear about where agency still exists, and deliberate about the trade-offs they are willing to make. In that context, trust – built through consistency and first-principles decision-making – becomes a durable leadership asset.

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What follows is a state-of-the-world assessment intended to help with this.

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Widening scenarios, tightening constraints

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The global context entering 2026 is not dominated by a single crisis, but by the interaction of several – widening the range of outcomes leaders must consider, even if many will not materialise.‍

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Energy, climate, and technology: the silent constraint‍

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Energy and climate have moved from aspiration to constraint. Grid capacity, permitting timelines, supply-chain concentration, and insurance withdrawal are shaping state and corporate behaviour more decisively than moral imperatives or rhetoric.

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Energy addition rather than substitution defines 2026. Investment in renewables will continue, but unevenly and more selectively. Reliability, resilience, and autonomy are increasingly prioritised over speed. The transition is not stalling – it is being sequenced.

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Technology, particularly AI, sits squarely inside this constraint. The rapid expansion of compute is pulling forward energy demand and exposing infrastructure bottlenecks that policy has been slow to acknowledge. For many firms and states, the binding constraint is no longer innovation, but power, grids, and build-out capacity.

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A small number of firms and states will continue to attract capital and scale. Many others will fall away – not through failure, but through delay, deferral or quiet cancellation. This is not retreat; it is consolidation.

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The United States: volatility as a force multiplier

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The United States remains the primary scenario widener in the global system. This is less about ideology than about method: short time horizons, transactional approaches to alliances, and a willingness to test institutional boundaries. Tariffs are imposed and withdrawn. Commitments are questioned, reaffirmed, and questioned again. Decisions are made and communicated at speed, compressing response times for everyone else.

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For leaders elsewhere, the mistake is to treat US behaviour as either decisive or irrelevant. It rarely determines outcomes on its own, but it forces others to plan across a wider range of contingencies. The system adapts more often than it breaks – but attention is constantly demanded. Trump’s impact this year is therefore best understood less as a system-breaker than as a persistent scenario widener.

A further implication is indirect but important. When the United States treats long-standing norms and constraints more instrumentally, others are more likely to test where boundaries now lie. This does not make dramatic escalation likely in the near term, but it does widen the range of scenarios leaders can no longer dismiss entirely.

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Europe and Ukraine: endurance, not resolution‍

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Europe enters 2026 still shaped by the war in Ukraine. The most likely path remains a grinding conflict rather than decisive resolution. The war will continue to absorb European political bandwidth, defence spending, and strategic focus. At the same time, further gains in Europe by right-wing and nationalist parties, alongside deepening domestic polarisation, will narrow room for manoeuvre.

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At the same time, Europe has adapted more than is often acknowledged. Defence budgets have risen. Coordination has deepened, often informally with coalitions of the willing. The greater challenge now is political endurance rather than strategic design: sustaining commitment amid fatigue and fragmentation.

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China: constraint, not collapse

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China is neither in unstoppable ascent nor imminent crisis. Structural economic pressures are real, but the state retains significant capacity to direct resources and shape global supply chains. For leaders in 2026, China represents a persistent judgement problem rather than a decisive break point.

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Selective decoupling continues alongside deep interdependence, particularly in energy, technology, and critical materials. One consequence is the diversion of industrial overcapacity into Europe and parts of Asia – already reshaping markets and politics.

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China’s key advantage lies in execution speed and scale – particularly in renewables, EVs, and adjacent supply chains – areas where others remain politically divided and slower to act.

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The Middle East: contained volatility

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The Middle East will remain volatile, but widespread regional rupture is unlikely in 2026. Economic constraints, domestic priorities, and cautious recalibration dominate decision-making. Saudi Arabia’s focus on economic transformation and fiscal discipline limits appetite for escalation, even as tensions persist.

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Gaza will continue to generate acute humanitarian and political pressure in 2026, but it is unlikely to determine the region’s broader trajectory this year. Iran remains the principal downside risk, with miscalculation making episodic shocks more likely.

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The leadership error is to read every spike in tension as a strategic turning point. Most will be absorbed.

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What this context is doing to organisations and people

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If the geopolitical environment is characterised by wider imagined outcomes, the human response is a search for agency. A persistent sense of economic, political, and technological insecurity is shaping behaviour at every level.

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Time horizons are shortening. Leaders preserve optionality, delay commitments, and defer difficult trade-offs. Trust is becoming scarcer – and therefore more valuable.

As shared narratives weaken and misinformation rises, people rely more heavily on known relationships and familiar in-groups. Smaller, more reliable circles feel safer than broad alignment, but they also reduce coordination and increase fragmentation and thus friction. Declining trust in governments and large institutions reinforces this turn towards self-reliance and tribe-based belonging; towards smaller, purpose-driven coalitions.

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None of this is irrational. But it carries costs: fragmentation, under-investment in trust, and a tendency to confuse motion with progress.

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Leadership when outcomes widen

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For energy leaders, 2026 will not reward maximal ambition or constant hedging. It will reward judgement.

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The challenge is not to predict which geopolitical or technological scenario will dominate, but to remain disciplined about where capital is deployed, which partnerships are durable, and which trade-offs are consciously accepted. In a system defined by constraint – energy, infrastructure, and trust – optionality is not free.

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Leaders will ultimately be judged less on individual decisions than on whether they remained anchored to clear first principles. In a noisy environment, consistency matters more than speed. Trust will be a differentiator. This is what creates room to manoeuvre.

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Leadership this year is about orientation rather than prediction: clarity on first principles, consistency under pressure, and the willingness to act deliberately while multiple futures remain in play. Those who manage that discipline will not eliminate volatility – but they will avoid surrendering judgement to it.

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Xenia Wickett, Director of Wickett Advisory.
www.wickettadvisory.com

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