What will leadership look like in 2025?

What does leadership look like in 2025? From being nimble, collaborative, agile, strategic and building trust, follow these tips from our experts.

2025: A time for rapid course-correction

Linda Yueh, Adjunct Professor of Economics

Leaders are of their times. Trump 2.0 and the rapid adoption of Generative AI both increase the likelihood that 2025 will be a time of disruption and not business as usual. So, the coming year could prove to be a time when nimbleness, along with horizon scanning and course correction, are skills that are more important than normal.

With the return of Donald Trump to the White House, global markets are braced for a period of uncertainty and volatility, as was seen during the first Trump administration. Policies, such as new tariffs and investment restrictions, can be announced via social media and implemented at a much faster speed than the usual policymaking process that gives businesses more advance notice. These frictions can increase not only the costs of business, but also disrupt the functioning of global value chains, which are a lynchpin of international trade.

For instance, President Trump has targeted countries that run bilateral trade surpluses in goods with the US, which includes ‘connector countries’ such as Mexico and Vietnam that have become integral parts of global value chains. Vietnam, for example, has become more important in recent years as US-China trade tensions have led multinational companies to implement ‘China+1’ strategies that reduced their reliance on China by diversifying their supply chains to take more production out of China and into connector countries.

Trump has said he doesn’t want to see Chinese cars coming from Mexico, which has a free trade agreement with the US, so this could challenge the supply chain configurations currently invested in by global companies.

Therefore, horizon scanning and nimbleness to adjust supply chains and redirect to less disrupted markets will likely be a more important focus for leaders in 2025.

Nimbleness is also required, since 2025 is likely to see continued disruption from technologies such as Generative AI. When a new technology emerges, there is always a scramble to work out the best business use case. But the speed of adoption of ChatGPT is several magnitudes faster than it was for the internet or PCs, which means there is greater potential to get the use case wrong. The technology is also changing rapidly as tech companies roll out different forms. For leaders, the risk is that there could be adoption of the wrong tech stack or software and hardware, which tends to happen with a fast-changing technology.

Thus, being able to course correct by closely monitoring use cases and adopting the effective ones is key. Also, leaders will need to ensure that their businesses do not go all-in on one bet. It may be better to be a ‘fast follower’ than a front-runner in this arena.

In a year of disruption, leaders must be nimble and forward-looking and must not hesitate to course correct. They will need do so quickly, given the pace of change, and learn from their inevitable failures to navigate a disruptive 2025.

Trust to the fore

Randall S. Peterson, Professor of Organisational Behaviour; Academic Director, Leadership Institute

When I teach I always ask my audience: “What do we want from our leaders in times like these?” Typical answers include empathy, good relationships, agility and resilience. Good relationships and empathy have always been part of the equation in truly motivating others, but they are becoming ever more important as we increasingly supervise from a distance or online.

We used to be able to see if someone was struggling or having a bad day, but now we often have to rely on what people choose to show us; oftentimes over a screen – which is why qualities such as relationships and empathy are there.

I have been doing work in this area and find cognitive empathy (rationally understanding other people’s emotions) is helpful, but affective empathy (feeling what they feel) is not helpful. So, the future of leadership is in being better at motivating and engaging people in the ways they want to be engaged, which is about having a better understanding of how to read others.

The other reason I think this has emerged is the chaotic, unpredictable nature of the world out there. People need to follow when you signal a change in direction. That takes trust in leaders.

Former US Secretary of State Colin Powell illustrated perfectly why trust matters when venturing into the unknown when he was asked to define the key characteristic of effective leadership. He said: “Trust. The longer I have been in public service, and the more people have asked me about leadership over the years, leadership ultimately comes down to creating conditions of trust within an organization. Good leaders are people who are trusted by followers. Leaders take organizations past the level that the science of management says is possible.”

Quoting a sergeant from his time in infantry school, General Powell added, “You’ll know you’re a good leader when people follow you – if only out of curiosity! So, the essence of leadership is about doing all that the science of management says you can with resources, but then taking it that extra step and giving it that spark. And that spark comes from getting people to trust you.”

In 2025, with organisations increasingly exposed to threats from cyberattacks, phishing attempts and deep fakes, trust will be the most important quality in leadership, and I think we will see businesses committing to embedding it not only in senior management teams, but throughout the organisation.

Leadership in the new normal of continuous disruption

Costa Markides, Robert P Bauman Chair in Strategic Leadership; Professor of Strategy and Entrepreneurship

We live in a world characterised by continuous and overlapping disruptions. Before we have a chance to respond to one disruption, another one hits us, such is the speed of change. In such a context, we have to face a number of new strategic and leadership challenges. They are new in the sense that leaders of a generation ago did not have to face these challenges.

Continuous disruption requires continuous readiness and continuous change inside the organisation. At a strategic level this may be fine, but people get tired fighting battle after battle. How, then, can you energise your people so that they are alert and ready for battle all the time? How do you create a constant and positive sense of urgency and an organisation-wide feeling of unease with the status quo, so that people are always ready to join the fight, whatever disruption hits you?

In today’s world, agility is key. Of course, it was always important, but given the pace of change that we now see, it is much more important than before. How can we institutionalise into the DNA of the organisation the day-to-day behaviours that will allow us to identify and respond to change early –and how can we achieve this in a decentralised way, where every team leader plays a role?

Continuous disruption requires continuous innovation. Competitive advantage is short-lived in an environment of continuous disruption, so companies need to search continuously for new ways to differentiate themselves. This is where innovation comes into play. But how can we encourage the pursuit of continuous innovation in the whole organisation? How can we get innovation out of everyone?

Continuous disruption creates ambiguity. How, then, can you develop strategy in such a context? By the time you decide what to do – based on the environment you faced when deciding what to do – the environment may have changed! How do you stay focused on your destination while adapting to the changes around you?

How do you give autonomy to people to respond to change without losing control? How do your people know what they can decide on their own and what they cannot decide on their own?

How do you increase the speed of your decision-making? This is a requirement not only at the individual level but also at the organisational level. But how do you make the whole organisation faster at making decisions (and make sure that speed does not come at the expense of quality)?

Continuous change makes existing assumptions and beliefs irrelevant. You must therefore be ready to change beliefs and ways of operating that have served you well over the years. But how do you know which of the many beliefs you hold are the ‘wrong’ ones to change? And how do you change entrenched habits and beliefs? These are the conundrums that leaders will increasingly face in 2025.

Being strategic about the future of work

John Dore, Programme Director, Executive Education

Each year, leadership trends and themes come and go – authenticity, growth mindset, curiosity, empathy, emotional intelligence and radical candour are just a few. New approaches, new research and new thinking are applied to the age-old problems of more effectively leading organisations and people. However, some perennial leadership challenges remain common across the years: the need to improve productivity, deepen engagement, and source, retain and grow talent. But in 2025, those three spiky challenges seem likely to be even more demanding as the mode and pattern of our working lives have shifted from corporate to individualised and from together to apart. If it is not already a top-team concern, forming a coherent strategic response to ‘the future of work’ will be a pivotal leadership issue for CEOs in 2025.

The past three years have seen the early skirmishes of a new front in tiresome ‘culture wars’ as organisations and their leaders have wrestled with the growth in flexible, remote and hybrid working. In the UK, hybrid is widely adopted and wildly popular, with 44% of employees working from home. Some 14% now work wholly remotely. In the US, Elon Musk and Vivek Ramaswamy will head a new department, pithily named ‘DOGE’ (Department of Government Efficiency), aimed at cutting waste in government and improving productivity. An early target will be federal employees’ preference to work from home, with Musk posting that full-time attendance no longer exists, as “less than 1% attend the office… almost no one.”

Some corporates are reversing fast on hybrid work and some are doubling down. Appropriately, given its penchant for experimentation, a massive test will be established for large-scale, return-to-office programmes as Amazon CEO Andy Jassy has enforced a five-day office attendance from 2 January 2025. A recent Gartner report was sceptical of the value of these “return-to-office” mandates as, after four years of being apart, employees have not only lost the appetite to collaborate in person, but many returners also say they actively avoid in-person contact with as many as a third of their colleagues.

Numerous studies have highlighted the employee perspective on remote and hybrid as being hugely positive; supporting work-life balance, personal productivity, wellbeing and more. One notable insight was that being remote removes the necessity to navigate the social relationships of a working environment. Unlike his peer at Amazon, Starbucks CEO Brian Niccol seems to have drunk this Kool-Aid and will lead in 2025 from his California beach office, rather than relocate to the head office in Seattle.

At least Jassy and Niccol have expressed a view on the productivity and employee-engagement issues at stake. By taking a tactical, wait-and-see approach to work patterns, some leaders may do their organisations a disservice by deferring the conundrum for another day. Whatever the chosen pattern for collaboration, it must be communicated with clarity and conviction from the top. CEOs would be neglectful if they did not prioritise finding new ways of creating real cohesion amongst their people. We have known for many years that such cohesion creates an organisational advantage, and that should be a singular aim of CEOs and their top teams, regardless of the year. It will be fascinating to see how the future-of-work debate develops in 2025.

Utilising the intelligence of many

Vyla Rollins, Executive Director, Leadership Institute

Effective leadership in 2025 will not be defined by the effectiveness of executing decisions made by a handful of those in authority roles at the top of an organisation, but by the ability of organisations to cultivate, harvest and collectively act on the intelligence of many. In fact, organisations that cling to 20th-century models of enacting change (such as cascading strategy, large-scale initiatives blessed by those at the top and linear approaches to strategy execution that span years) will rapidly lose their capability to thrive and ultimately survive.

The organisational winners in 2025 will be those that allow those in authority roles to act as enablers, facilitators and orchestrators, as opposed to directors and commanders, and who have the skill to make space for ways of progressing that allow collective change leadership to take hold in their organisational ecosystems.

For example, instead of focusing narrowly on detailed strategy formulation and execution, those at the top will need to build the confidence, capability, skills and discipline to articulate strategic intent and aspiration in simple ways.

This involves cultivating the ability to express what success looks like – whether achieving sustainability goals or harnessing Generative AI – and then helping to create processes where individuals at all levels (and sometimes with those outside the formal organisation structures) can innovate and implement solutions that will achieve those aspirations in effective and ethical ways. More specifically, it will require organisations to proactively and quickly create spaces for real-time experimentation (focusing on addressing live business challenges) and collaborative problem-solving at the point of delivery.

Proven techniques such as action learning will allow teams to accelerate tackling pressing challenges while simultaneously building enabling mindsets, behaviours, competencies and technical skills.

In the year ahead, collaborative work systems design will foster cross-functional cooperation and end-to-end process awareness and linking to accelerate improvement and adaptation.