A pivot point: Reinventing transformation in volatile times
HLB Survey of Business Leaders 2026
Living with volatility
Disruption has become the routine of the 2020s. The decade opened with extraordinary advances in digital adoption, buoyed by new technologies and faster innovation cycles. Yet a global pandemic quickly counterbalanced these gains, supply chain reshuffling, and a surge in inflation that strained operations worldwide.
Two years after the pandemic, the pattern repeated itself. Breakthroughs in generative AI have coincided with renewed trade tensions and armed conflicts. Following the biggest global election year and the return of President Trump for the second term, new international alliances and fractures have emerged.
Leaders now operate on a near-constant seesaw, moving between periods of momentum and pressure within a few quarters, if not months. In 2026, leaders feel the most preoccupied by disruptions across three axes: technological, economic and political.
Rapid news cycles often intensify perceptions of change. Michael Ballé, a lean executive coach, consultant, and published author, feels that the information age has caused major damage to the planning function. “The businesses’ motto has been: ‘fail fast, break things’. But now, it’s mostly just break things,” he observes, as some businesses face tougher stakeholder expectations. Companies are no longer evaluated purely on EBITDA and other financial metrics, but mostly on the storytelling around them, according to Ballé. Naturally, this adds further to the volatility as some companies see inflated valuations, while others remain underappreciated.
Still, leaders remain optimistic. The majority treat the constant pressures as forces to be managed and, at times, leveraged. Evidence of this response is the increasing proportion of leaders who are very confident in revenue gains, rising from 35% to 42% year on year. That’s not just wishful thinking.
Profit margins are also strengthening. Compared to last year, more companies report a 5% or greater profit margin increase, and just 8% report a sharp margin squeeze. Last year’s figure was almost twice as high, at 14%.
Overall confidence is edging up, too. The share of leaders anticipating an increase in global growth in 2026 has climbed seven points, pushing optimism to 53%. There are some regional variants in sentiment. Leaders in newly industrialised markets are even more assertive.
Effectively, we’re seeing more companies thriving through volatility thanks to targeted improvements in three areas: faster planning cycles, technology-enabled agility, and customer-led growth.
Planning ahead under pressure
The current pace of change in market conditions calls for continuous adaptation. Consumer sentiments shift almost in a blip. Supply chain disruption is more frequent, and political changes add fuel to the fire.
To navigate uncertainty, leaders have channelled more efforts into creating leaner business models. In a 2022 survey edition, 62% told us they’re now capable of innovating at greater speeds than in the past. The shift to faster operations has continued and is now paired with shorter and, oftentimes, dynamic planning cycles that companies in all regions have adopted. 42% of leaders rely on short planning cycles between 6 and 24 months, while 12% operate with a continuous, rolling strategy. Only 13% of respondents have cycles extending beyond five years.
“Management was like bowling, one ball after another, every three years you did your strategy. says Nils Müller, CEO and Founder of TrendONE. Now it’s like juggling with seven balls. Once in a while, someone passes by with a new golden ball and says hey, catch this one. So there are always new opportunities and new threats - and also threats create new opportunities.”
Technology sector
of leaders use either continuous or sub-12 month planning cycles
The technology sector operates with the shortest horizons: 28% respondents use either continuous or sub-12-month planning cycles.
Case: Global data analytics firm Teradata recently replaced its traditional three-to-five year roadmap with a rolling 12–18-month cycle, recognising that long-range IT strategies no longer withstand the speed of digital change. The company now focuses on near-term outcomes supported by agile portfolio reviews, quarterly resets, and OKR frameworks that keep priorities adaptable.
Michael Ballé agrees that a lot of business planning is now driven by volatility. “Many leaders can't look at the horizon because there's no horizon anymore”, he says. “I see businesses making super-fast decisions. But I don't always see a need for that." Ballé cautions leaders against showing a knee-jerk reaction. “When the moves you make go faster than the company's ability to take them, that's when nothing ever gets done.” According to Ballé, sometimes it pays to go intentionally slower and resist the temptation to act on every hyped opportunity without properly validating the possible returns first.
How leaders approach strategic planning
Two distinctive schools of thought are emerging in how leaders plan for the future. An almost equal share — 46% and 42%— rely on adaptive planning or comprehensive long-term planning, suggesting that organisations are split between those favouring flexibility and those seeking stability through extended horizons.
This divide reflects the balancing act leaders face. As Müller notes, most are pursuing both quick wins and big bets. Short-term gains help maintain momentum, while investments in areas such as AI or next-generation battery technologies require planning five to ten years ahead. To reconcile these demands, more companies are adopting a multi-optionality approach, cycling continuously through orientation, strategy, and transformation.
The result is a form of ‘dual-speed’ operations. Organisations maintain the ability to pivot quickly when disruptions or opportunities arise, supported by adaptive planning and stronger executive decision-making, while still keeping sight of longer-term strategic ambitions.
To support this level of agility, over a third of respondents also use other techniques for strategic planning and decision-making, including options analysis, seeking diverse views to inform decisions (35%), and scenario planning (31%). For instance, Mercedes-Benz uses game theory to optimise its strategic sourcing. By modelling how suppliers behave in competitive negotiations, the procurement team can define binding rules for all participants and identify the partners most likely to deliver both value and reliability.
This methodology helps the company optimise supplier selection and ensure fair competition. It also allows teams to anticipate market dynamics, reducing exposure to risks such as material shortages or cost volatility that could disrupt production.
Michael Ballé believes there are three important methods for planning in today’s environment: “Firm deadlines, stress-testing strategies, and decision matrices. You have to understand your framework first. Then, you stress test your strategies. And you have a deadline on implementation”.
Apart from better methodologies, leaders are also looking to emerging technologies. About a fifth already use AI to support forecasting and strategic planning, rising to just over a quarter for top profitability performers. But many seek to enhance these capabilities further.
Automated and AI-powered decision-making (62%) and business intelligence and data visualisation tools (59%) are among the top five areas tagged for increased investment through 2026. Real-time data and predictive analytics, market and competitive intelligence are also areas where half of business leaders are increasing investment.
By combining these three capabilities — data-driven decision-making, shorter operational planning cycles, and learner implementation capabilities — leaders can move into new verticals faster and command greater market share without diluting their profit margins as much.
Responding with agility
When it comes to execution, companies are increasingly focusing on ‘getting their house in order’. The top priority for 58% of leaders is improving operational efficiency in the next twelve months. A focus on efficiency and process excellence has provided businesses with a firm foundation for confidence and expansion. This footing is essential to respond more quickly and with more agility to volatile and aggressive operating conditions.
Almost half also aim to reduce costs. Although this action has dropped down the list of immediate concerns, as businesses start to reap the benefits of AI automation. "With operational efficiency, you can make your processes and systems work better, and you can reduce the cost of delivering services. And that reduction of service cost is related, significantly, to reducing headcount," says Michael Hinshaw. New technology adoption remains a key activation priority for 55% in 2026, as over a third of leaders continue to recognise gaps in their digital and AI capabilities.
Leaders realise that emerging technologies are the crux of achieving faster business growth. “Business now happens at a non-linear dynamics,” adds Nils Müller. “Companies come into existence with a billion-dollar valuation within months, oftentimes thanks to intangible knowledge like patents, data, and algorithms.” Since the start of the decade, we’ve seen faster, tech-led companies disrupting industries like finance, insurance, and entertainment, among others. Müller expects that in the future, more and more banks will become mostly “algorithms and AI capabilities, like hyperscalers,” and heritage institutions may struggle to stay as competitive unless they transform, too.
Asset-heavy industries, as well, have gained greater speed and agility thanks to emerging technologies. Xiaomi’s entry into the electric vehicle market illustrates how rapid strategic cycles and extreme automation can accelerate diversification at remarkable speed. In 2021, the consumer electronics company created a dedicated EV subsidiary and, by December 2023, released its first EV model, the SU7. The demand surged immediately.
Xiaomi has raised its 2024 delivery target three times, from 76,000 units to 130,000 by mid-November, and now expects to reach 400,000 in 2025. Automation is central to this performance. Xiaomi reports that 100% of key body-shop processes are fully automated and that the overall automation rate is 91%, supported by 39 robots across the assembly line. It is one of only two systems in China capable of fully automated assembly of four doors, two hoods, and the fenders, achieving tolerances of ±0.5mm and exceptionally narrow body gaps. Robots also handle painting and finishing. Crucially, Xiaomi can reprogramme the system within 40 minutes via a quick colour-change protocol, enabling the SU7 range to be offered in nine colours — far above the industry average of six.
Examples like Xiaomi illustrate what many leaders now recognise — that digital technologies, lean processes, and faster execution cycles are crucial for gaining market momentum. And this momentum creates extra cash reserves to fuel subsequent growth. The most profitable cohort in our survey plays ‘offence’ this year. They’re 1.5X more likely to invest in new markets or segments and 1.4X more likely to bring new products or services to the market this year. Their ability to quickly enter new segments appears to be linked to more strategic usage of AI.
AI adoption levels have grown sharply. Only 9% of leaders say they are not using AI, vs above 20% in 2025 and in 2024. Many companies have progressed beyond more entry-point use cases — content generation, sales support, and data mining — towards more complex usage scenarios. Document processing and process automation, focused on building a robust operational framework, are growing steadily and now command 33% adoption rates. In addition, more leaders are using AI for R&D and quality control.
The most profitable companies demonstrate even a more advanced AI capability set. 38% use AI for research and development, 36% for quality control, and 33% for customer service and customer analytics.
Pfizer illustrates how AI adoption is moving into more sophisticated territory. The company now applies machine learning to the vast datasets generated during drug discovery, where each stage can produce terabytes or even petabytes of information. These models can surface patterns and biological signals that traditional research methods struggle to detect, allowing scientists to identify promising drug candidates far earlier in the process. Pfizer has already used AI to advance next-generation small-molecule treatments for autoimmune diseases, demonstrating how data-driven discovery can shorten development cycles and expand the pipeline of viable therapies.
Indeed, AI can bring greater operating efficiencies and speeds to existing processes. Yet, as Michel Hinshaw cautions, "if AI is used to automate bad processes, they remain bad processes. When you apply AI, it's critical to reassess the process that you're trying to automate." A good approach is to map an existing process end-to-end to identify bottlenecks, redundant steps, and handoff delays. Then look into each stage and evaluate whether adding an AI layer on top adds value for the business and customer.
Digital-led agility requires a better security posture
Rising technology adoption is sharpening the focus on security. Cyber risk preoccupies three-quarters of leaders, having risen from a middling concern to a top two risk over five years.
Last year alone was rife with cybercrime. British retailer Marks & Spencer faced a significant ransomware attack in April 2025. Popular CRM Salesforce suffered a data loss, affecting over a billion customer records. Among respondents, cybersecurity is the second most concerning weakness that they need to focus on in the next twelve months.
Investment priorities
of leaders are increasing investment in enhancing cyber and data security
Cyber and data security is one of the top investment priorities for leaders in 2026. Other key business areas in which leaders are increasing investment include digital transformation & emerging technology adoption (65%), automated and AI-powered decision making (62%), and customer experience enhancement initiatives (59%).
Apart from being frequent, cyber threats have also become more elaborate. In 2025, 79% of attacks were malware-free, meaning hackers didn’t rely on malicious code. Instead, many now prioritise social engineering techniques (phishing), which have become easier to execute at scale, thanks to generative AI.
In the case of the Salesforce data breach, attackers used AI to impersonate IT support staff and tricked employees into installing a malicious app, which granted them access to company data.
Likewise, the attack surface has increased. New digital systems — large IoT networks, connected devices, AI models — pose novel risks. Third-party AI apps may lack proper security architectures and/or contain overlooked vulnerabilities, exposing users to counterparty risks. Custom-built, proprietary models may only pull data from certain systems, creating biased outputs. “One problem businesses have and never solved is data integrity,” points out Michael Ballé. “And now, with the addition of AI we've just made the problem massively worse”.
To benefit the most from emerging technologies, digital footprint expansion and cybersecurity should be treated as two sides of the same coin. This year, almost as many leaders will increase cybersecurity spending as will expand their digital and emerging technology budgets.
Security strengthens operations and builds customer trust at the same time. Firms that invest in robust cybersecurity can offer more seamless and personalised experiences without compromising privacy, reinforcing confidence at a time when concerns about data misuse remain high. In this sense, better security becomes a foundation for better customer experience, enabling innovation while safeguarding the relationships on which growth depends.
Driving customer-led growth
Across industries, operational and strategic change is being driven by the same imperative: meeting customer needs more effectively. This year, 49% of leaders see focusing on customers as critical to their short-term growth ambitions
We asked leaders what they recently learned about their customers. “Expectations of service are higher than ever,” shared a leader in the financial services sector. “We need to earn our customers' trust before they will do business with us,” added a leader from the energy sector. “But they remain loyal to us so long as we deliver value.”
Strong customer experience has become a decisive source of competitive advantage, shaping loyalty, influencing switching behaviour, and increasingly determining where growth comes from. “If you understand your customers better than any competitor, if you deliver products and services and experiences to your customers that leverage your knowledge about your customers better than your competitors, you will create relationships with them your competitors cannot break," says Michael Hinshaw.
To cultivate stronger relationships, leaders are listening more carefully to what their customers are saying. The majority are prioritising customer data analytics, segmentation, and personalisation, and aim for customer-driven innovation. Over half plan to improve their customer feedback program.
Digital tools are sharpening customer understanding and personalisation. This year, we saw more active AI deployment to support a renewed focus on customers. Sales and marketing, customer analytics, and customer service are all in the top 6 use cases for AI.
For instance, an Australian telecom, Telstra, recently expanded two in-house generative AI tools — One Sentence Summary and Ask Telstra — to support contact-centre and retail staff. The pilots showed that 90% of employees saved time and worked more effectively, contributing to a 20% reduction in follow-up customer contacts. More than 80% of frontline staff reported that the tools improved the quality of their interactions, enabling faster, more personalised service.
Starbucks, in turn, has been experimenting with AI-driven personalisation using its Deep Brew platform. AI-driven recommendations in the mobile app and rewards programme have lifted customer engagement by around 15% and improved marketing ROI by roughly 30%, compared with non-AI campaigns. The company has also expanded Deep Brew to support store teams, using computer vision and spatial intelligence to automate inventory counts that are now performed eight times more frequently and with real-time accuracy. As of late 2025, this automated system was installed in most company-operated stores in North America.
Customer focus
of leaders plan to invest more in culture and training for employees
There are a number of actions which leaders are taking to improve their focus on customers in 2026, among them culture & training for employees.
Other priorities include customer data analytics, segmentations and personalisation (the strongest response with 70% of leaders making this a priority), customer feedback programme (54%), and organisational redesign around stages in the customer journey (46%).
AI and other digital tech can provide deeper customer knowledge and more granular insights. But we still need human judgment and ingenuity to translate these to more delightful experiences, resonating messages, and ethical advertising.
“As a customer experience leader, the two things that we focus on are customers and employees, because the link between those two groups is exceedingly tight," strengthens Michael Hinshaw.
To match the customer expectations, 66% of leaders are also switching to a customer-driven innovation approach. For instance, Straumann Group, the Swiss medtech company, worked closely with dental clinicians and laboratories to co-design its iEXCEL implant system. The system consolidates four implant designs into a single platform that cuts procedure time and reduces inventory complexity. Straumann also invests heavily in clinician education, delivering 12,000 training activities in 2024, with 40% targeted at lower-income markets. The results are evident: 13.7% organic revenue growth, CHF 2.5 billion in annual revenue, and 6.7 million patients treated — performance the company attributes to a relentless focus on customer needs.
Companies that are redesigning products, services, and workflows directly around customer needs see materially stronger performance as a result. "Organisations that invest in customer centricity are usually better at delivering scalable, predictable customer experiences that also drive growth," agrees Michael Hinshaw. Among survey respondents, businesses with accelerating profits as compared to their peers are doing more around customer data analytics, segmentation, and personalisation than their peers.
Yet, their peers aren’t trailing far behind. Most of the respondents plan to substantially increase investment in customer experience enhancement initiatives, business intelligence and data visualisation, customer analytics and personalisation capabilities, securing customer data, real-time data and predictive analytics, and customer service training in the next 12 months.
“Customers want digital personalised service regularly. They want more open and transparent relationships with our organisation,” mentioned a CFO at a technology company. Most businesses sit on a trove of valuable data to make that happen. But far fewer use it to drive measurable improvements.
Investments in better data analytics technologies can help leaders turn fragmented data into precise insights to anticipate needs rather than simply react to them, refine product offerings, and identify friction points that erode loyalty. "AI is driving customer information into essentially account-level playbooks that sales and success reps can leverage to build better customer relationships,” says Hinshaw. By bringing customer data analytics into more workflows and to more people, leaders can move from sporadic personalisation to a more continuous, data-informed customer experience that supports both growth and retention.
Customer transparency as a maturing trend
Since the start of this decade, we’ve seen a rise in ethical consumption. “Customers are no longer just looking for a functional product or service, but rather for complete experiences that convey trust, closeness, and added value,” says a CISO at a LATAM technology company.
More shoppers pay attention to the environmental footprint of consumed products, employee working conditions, and leadership behaviours. “Customers now have higher environmental requirements for the production process,” admitted a leader from the manufacturing sector in APAC. “Their purchasing behaviour has evolved: They compare more, read reviews, and favour brands with a social conscience,” said a leader from the entertainment industry. “They value transparency: They want to understand how products are made, where the raw materials come from, and how their data is used”.
Emerging technologies like AI can help leaders achieve these goals when deployed responsibly. VF Corporation, the parent company of several sustainable brands including Timberland and The North Face, has used advanced analytics to trace 61% of its key materials volume across five tiers of the supply chain to better understand sourcing risks and opportunities. Over the last year, they have sourced over 5,000 MT of wool, cotton, natural rubber, and leather grown using regenerative practices, earning praise from consumers and stakeholders.
Greater transparency is the key element of brand trust — a powerful metric for driving continuous growth. Customers who believe the company is transparent are twice as likely to buy additional products/services. Moreover, they’re almost 4X more likely to forgive company mistakes. Thanks to AI and analytics companies can turn existing data into impactful branding materials and, overall, do more in the ESG area with fewer resources.
That said, some emerging tech experiments can backfire, too. In a recent campaign, Levi Strauss & Co. used AI-generated models from diverse backgrounds to supplement human models. However, the plan backfired as consumers saw this as an unethical shortcut to replacing human models with AI.
Advanced analytics and AI can reveal patterns in behaviour, streamline service, and support more sustainable choices. But models cannot replicate the trust, nuance, and authenticity humans bring to customer relationships. “In the age of AI, it’s important to be more human: Empathy, intuition, relationships. Core human skills will matter.” says Nils Müller.
The most successful businesses are using new technologies to enhance, not substitute, human insight, translating data into experiences that feel personal, responsible, and genuinely aligned with customer values.
Conclusion: Leading through volatility starts from within
This year’s findings point to the most intense risk environment since our research began. Volatility is no longer episodic; it is structural. In such conditions, leaders face a familiar temptation: to react faster, shorten planning cycles, and chase new technologies aiming to stay ahead. Yet our research suggests that resilience and growth do not come from speed alone.
The most effective leaders are taking a more disciplined, inward look at how their organisations truly operate. They are asking where acceleration creates real value, and where a steadier, more deliberate approach protects it. Technology, data and AI remain powerful enablers of efficiency and insight, but only when investments are grounded in clear operational outcomes rather than momentum or fear of missing out.
Volatility also demands a dual mindset. Businesses must be capable of managing short-term pressures while continuing to make longer-term bets that sustain competitiveness. This requires better scenario planning, stronger decision discipline, and operating models that allow different parts of the organisation to move at different speeds without fragmenting strategy or culture.
Above all, an inward focus brings leaders back to the most reliable anchor in uncertain times: the customer. Organisations that deeply understand what customers value beyond its products and services, but in trust, security and societal impact too, are better equipped to navigate disruption. When customer insight shapes strategy, technology investment and operating design, agility becomes purposeful rather than reactive.
As volatility persists, the challenge for business leaders is not simply to respond faster, but to respond wiser: aligning risk management, decision-making, technology and customer focus into a coherent, resilient whole.
Ten questions every business leader should be asking:
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Are we focusing on the right risks or just the most visible ones?
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Where does speed genuinely create value in our business, and where does it destroy it?
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Do our technology and AI investments clearly improve performance, or are they driven by trend pressure?
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Can our planning approach balance short-term resilience with long-term strategic bets?
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Do we have the data, insight and governance needed to support better decisions in real time?
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Is our operating model designed to allow different teams to move at different speeds without losing alignment?
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Have recent updates to our technology or processes exposed new weaknesses in our cyber security, data protection or risk controls?
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Are we embedding agility through capability and preparedness, or relying on constant reaction?
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How well do we truly understand what our customers value today and how that is changing?
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Are we using technology to enhance the human experience for our customers, not replace it?
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