Why leadership, wisdom, and inner capacity need to shape strategy in the age of AI

The past years have not been demanding because of one disruption, but because of the simultaneity of many forces unfolding at once.

Geopolitical volatility continues to shape trade, investment, and risk. Climate realities have moved from future concern to present condition. Rapid advances in AI are fundamentally changing how decisions are made, how work gets done, and how trust is built. At the same time, the economic landscape has remained uneven, with easing but persistent inflation pressures and cautious capital allocation.

For many leaders, this creates a felt sense of being always on, yet never fully caught up. The familiar strategies of working harder, accelerating execution, or tightening control no longer bring relief. Instead, they often amplify exhaustion and fragmentation.

In this context, it is easy to feel overwhelmed. What becomes clear, however, is that the challenge is not only the external complexity leaders are facing, but the inner capacity of leaders to meet it.

And something interesting is happening.

When even McKinsey talks about meditation

When even McKinsey starts writing openly about the value of meditation and reflective work, you get a sense that the ground is shifting.

In a recent article, a senior McKinsey partner argues that in a world dominated by algorithms, the scarcest leadership resource is no longer information, but wisdom — and that inner practices are not retreats from reality, but ways of meeting it more clearly, calmly, and ethically.

This is a subtle but significant signal.

For decades, leadership discourse has focused on speed, performance, and optimisation. Reflection was often framed as a personal preference, a private practice, or something to be done “after hours.” What we are now seeing is a shift toward recognising inner capacity as a core leadership infrastructure — not separate from strategy, but foundational to it.

What I see in my own work mirrors this clearly. As complexity increases, clarity, discernment, and presence are no longer “nice to have.” They are becoming core leadership capacities.

Strategy is not dead — it never was

For me, this is not new territory.

Almost a decade ago (already then an avid meditator), I wrote an article for INSEAD titled Why strategy is not dead. At the time, there was already a growing narrative that strategy was too slow, too rigid, or too analytical to survive in a fast-changing world.

And yet, my argument then — which still holds — was that strategy endures not despite our humanity, but because of it.

At its best, strategy serves deeply human needs:

• Focus: helping us direct our limited attention toward what truly matters.
• Foresight: supporting our uniquely human capacity to think ahead and take responsibility for shaping the future.
• Learning: creating space for reflection, without which experience does not turn into wisdom.

These are not managerial conveniences. They are fundamental human capacities. And in an increasingly distracted, accelerated, and information-saturated world, they are becoming more — not less — important.

Why strategy itself must evolve

What has changed since then is the context in which strategy is practised.

As articulated already in Your Strategy Needs a Strategy, a volatile, uncertain, complex, and ambiguous world cannot be met with a single, static strategic approach. Different environments require different strategic logics — classical, adaptive, visionary, or shaping.

But over the past decade, something else has become visible.

Strategy is no longer only about positioning and resource allocation. It is increasingly asked to:

• express purpose beyond short-term performance,
• hold longer time horizons in the face of planetary and societal challenges,
• integrate ethical and systemic responsibility alongside economic outcomes,
• and engage people deeply enough that strategy becomes lived.

This changes the nature of strategy work itself.

The process of developing strategy now requires deeper reflection. The strategy itself needs to be purpose-led. It must integrate multiple horizons and stakeholder perspectives. And the implementation of strategy depends far more on leadership maturity, coherence, and relational trust than on plans alone.

This demands not only new tools — but new capacities in those who lead.

The developmental dimension of leadership

This is where insights from adult development and vertical leadership development become particularly relevant.

Research by Harvard professor Robert Kegan, Susanne Cook-Greuter, Bill Torbert, and others shows that leaders differ not only in skills and experience, but in how they make meaning — how they interpret complexity, relate to authority, hold paradox, and take responsibility.

In simpler contexts, more conventional forms of leadership often suffice. But as complexity increases, leaders are increasingly required to:

• hold multiple, competing perspectives without collapsing into certainty,
• navigate ambiguity and paradox without becoming reactive,
• integrate short-term demands with long-term responsibility,
• and remain psychologically grounded while others around them feel destabilised.

These are not technical challenges. They are developmental ones.

This doesn’t mean that leaders haven’t got a million smaller situational challenges too. That’s what everyday leadership is all about. Leadership always needs to be adapted to the context.

From this perspective, reflection is not a soft add-on. It is the primary mechanism through which leaders expand their capacity to meet the world as it is becoming.

Why reflection is not a luxury

This is why leadership is becoming less about doing more — and more about creating the conditions to see clearly before acting.

Reflection allows leaders to surface assumptions, notice habitual reactions, and distinguish signal from noise. It creates the inner space needed to respond rather than react — a distinction that becomes crucial under pressure.

That reflective pause can take many forms:

• A deliberate time-out for strategic review, stepping back from execution to reassess direction in light of a changing context.
• Executive coaching, offering a confidential space to explore assumptions, identity, and developmental edges.
• Facilitated reflection with leadership teams, enabling shared sensemaking, alignment, and collective intelligence to emerge.
• Time in nature — a walk, a run, or simply being outdoors — allowing thinking to slow and perspectives to widen beyond immediate demands.
• Writing or journaling, creating a simple but powerful mirror for thoughts, patterns, and emerging insights.
• Moments of stillness between activities — pausing before a difficult conversation, after a board meeting, or at the end of a long day — to notice what is present before moving on.

What matters is not the format, but the intention.

To slow down internally — so decisions, actions, and strategies can move forward more wisely.

Wisdom as a leadership capacity

In much of the leadership literature, wisdom has long been treated as vague or unmeasurable. Yet research in psychology and leadership increasingly frames wisdom as an integrative capacity — the ability to balance multiple perspectives, regulate emotion, act ethically, and orient toward the common good over time.

Seen this way, wisdom is not opposed to performance. It enables better judgment precisely in contexts where rules, data, and past experience no longer suffice.

This is exactly where many leaders find themselves today. AI can generate options. Data can surface patterns. But judgment — especially moral and systemic judgment — remains irreducibly human. And judgment depends on inner coherence.

A quiet but meaningful shift

Even as many economies are expected to recover, the underlying complexity we are navigating does not recede.

Climate change continues to reshape physical, economic, and social systems; geopolitical tensions and conflicts remain unresolved; and social and institutional trust is being tested in many parts of the world — all unfolding alongside rapid technological change rather than instead of it.

At the same time, AI is accelerating our ability to analyse, predict, and generate options at unprecedented speed. Yet the human capacities required to discern what truly matters — ethically, systemically, and over time — remain finite and, in many cases, underdeveloped. The result is not a lack of information or intelligence, but a growing gap between what we can do and what we are able to hold, integrate, and take responsibility for.

At the same time, strategy is being asked to adapt to realities it was never originally designed to hold, while leaders are still very much human, with all the limits and possibilities that entails.

What this reveals is something quite fundamental.

Leadership, strategy, and human development can no longer be treated as separate domains — particularly in an age where technology can amplify intelligence, but cannot replace judgment, moral responsibility, or wisdom. These dimensions are increasingly intertwined, shaping one another in ways that demand a more integrated understanding of what leadership actually is.

Perhaps this is the deeper invitation of our time: not to abandon strategy or leadership as we know them, but to allow them to evolve — grounded in a deeper awareness of context, guided by a longer time horizon, and informed by an expanded inner capacity to meet complexity without collapsing into simplification.

Not louder. Not faster. But deeper, more truthful, and more whole.

Let me know if you need some help on the way.

Elisabet Lagerstedt

Elisabet Lagerstedt is the founder and director of Future Navigators. As a trusted advisor, consultant, and Executive Coach, she helps business leaders navigate beyond business as usual to build Better Business and co-create a better future - through insight, strategy, innovation, and transformation. Elisabet is also the author of Better Business, Better Future (2022) and Navigera in i Framtiden (2018).