Strategic challenges of leaders - July 2025

Introduction: strategic leadership in times of chaos

In July 2025, business leaders face an unprecedented confluence of challenges: information overload, political unpredictability, escalating geopolitical conflicts and a rising tide of disinformation. Persistent international tensions, trade breakdowns and unclear regulations make the strategic environment resemble a VUCA/BANI landscape at its most complex.

On the one hand, we have vast data resources (big data), tools based on artificial intelligence and increasingly accurate predictive models. On the other hand, however, we face a deluge of inconsistent, manipulated information that disrupts decision-making processes, undermines trust and shatters organizational cohesion.

In such a context, the need for predictability and order is growing: leaders are looking for reliance on facts, data and proven decision-making paths. According to the VUCA idea, one of the key tasks of a leader is to identify what is certain and systematically expand that margin of safety. Building chaos-proof structures, developing a culture of trust and clear communication becomes not only a competitive advantage, but a condition for survival.

In this article, we present nine major strategic challenges, identified from current reports by PwC, the World Bank, OECD, WEF, ILO and the UN, among others. We will successively deepen each of these topics in subsequent analyses and recommendations.

1. Chaos and broken supply chains

Global supply chains have been experiencing major disruptions for several years, but 2025 brings a new level of complexity. According to the World Bank, the Global Supply Chain Stress Index remains at elevated levels due to demand spikes, port congestion, customs barriers and the effects of climate change. Thomson Reuters stresses that organizations should move from single-channel models to distributed, flexible supply networks.

In practice, this means creating hybrid strategies: real-time operational flexibility and long-term systemic resilience building. Tools such as Smartmanager.cloud support leaders in planning, monitoring and responding to disruptions in real time.

2. Transforming key sectors: automotive and semiconductors

The automotive industry is undergoing a profound restructuring: electrification, automation and ESG regulations are redefining production, distribution and supplier collaboration models. PwC warns that 32% of semiconductor supply depends on the availability of copper, which in turn is becoming a strategic raw material vulnerable to climate and political fluctuations.

Disruptions in access to components could paralyze production not only of automobiles, but also of medical equipment, traffic management systems and industry-critical technologies. Leaders should invest in alternative supply paths, developing relationships with local suppliers and using analytical tools to support risk assessment.

3. ESG and its real-world impact on business (e.g., construction)

Legislative changes related to ESG are becoming one of the most important transformational impulses. The EU is implementing CSRD, CSDD and climate packages that will cover thousands of companies across Europe and affect their global partners. In the construction sector, ESG signifies a new operating norm: requiring the use of low-carbon materials, measuring the life cycle of projects, Scope 3 reporting and using digital compliance tools.

The OECD stresses that institutional investors are directing capital toward ESG-rated projects, which means that companies that do not adapt to these requirements will be cut off from financing. ESG implementation must become an integral part of strategy, not just a formal requirement.

4. AI: transformation, disinformation and team management

Generative AI is revolutionizing not only manufacturing processes, but especially support areas: HR, accounting, marketing, analytics. PwC's Pulse Survey (2025) report indicates that 40% of leaders fear that without AI, their business models will become irrelevant. At the same time, the UN and WEF warn of escalating synthetic disinformation that destabilizes economies and degrades the quality of public and private decisions.

For a leader, this is a double challenge: to effectively implement AI in internal processes, but also to protect the organization from the effects of information manipulation. Tools like Smarteedu.cloud make it possible, on the one hand, to organize knowledge and communication, and on the other hand, to develop the digital competence of teams.

5. Geopolitics, protectionism and overhauling trade strategy

New waves of tariffs, "nearshoring" policies, sanctions and currency wars are driving the need to redefine trade strategies. PwC and the World Bank signal that 65% of companies are already changing supply paths and production locations, and nearly half are analyzing tax and legal restructuring scenarios.

Leaders need to develop competencies in political-economic analysis and scenario response. This is the time for strategic HR, change management and managerial education that teaches how to decide under uncertainty.

6. Reputational and information risk

The WEF and OECD classify disinformation as one of the top five risks to economic governance. Reputational incidents at companies (e.g., false communications, manipulated statements by leaders) can cause multi-million dollar market losses.

Companies are investing in systems to detect disinformation, monitor reputation, and develop a communication culture based on transparency, data and credible sources. Leaders must learn to be carriers of the information order, not its victims.

7. Labor revolution: reskilling, hybrid, wellbeing

ILO and OECD indicate that the world of work is undergoing fundamental change. As many as 69% of leaders are not competent enough to effectively manage work in the reality of AI and hybrid. Generational differences, changing employee expectations, emphasis on psychological well-being and meaningful work require a new leadership style.

Strengthening the resilience of teams, developing cognitive and communication skills, and investing in tools that support transparency and autonomy are becoming prerequisites for maintaining engagement and productivity.

8. Mental health crisis for leaders and teams

WHO and ILO are sounding the alarm: mental overload, job burnout and chronic stress are becoming one of the biggest threats to organizational stability. In Europe, it is already the third most common cause of absenteeism and reduced work performance. Leaders are exposed to prolonged pressure, decision-making loneliness and lack of recovery space.

In response, programs that support resilience, stress management and emotional resilience - for both managers and teams - are growing in importance. The MBA Crisis Leadership program and Excellence in Transformation©℠ training are designed precisely for leadership in crisis and the personal recovery of leaders in times of overload.

9. Generation Z's new role models: meaning, influence, autonomy

The OECD and McKinsey point out that Generation Z is already actively shaping work culture. It seeks meaning, quick feedback, real impact and flexibility. It rejects rigid hierarchies and distrusts organizations that are not authentic.

Leaders must learn a new language: transparent, partnership and value-based. This requires a change in leadership style, openness to diversity and the ability to create inclusive teams. It's also a space where leaders should use tools like Smartmanager.cloud to accurately manage expectations, goals and feedback.

Summary: The nine strategic fronts of a leader

1. Managing supply disruptions
2. Technology transformation of key sectors
3. Integration of ESG into business strategy
4. AI adoption and protection against disinformation
5. Geostrategic trade management
6. Reputation protection and information communication
7. The labor revolution: competency, hybrid, well-being
8. Mental health of leaders and teams
9. Changing values and work styles of Generation Z

Heuresis: practical support for leaders

Our program and tool offerings support managers in understanding and responding to today's strategic challenges. MBA programs such as MBA Crisis Leadership, MBA ESG, MBA Strategic HR or MBA EDU & AI provide the most up-to-date and practical knowledge, grounded in the realities of business and transformation.

The courses in the Excellence in... series, on the other hand. provide a concentrated pill of knowledge for immediate implementation. Our IT tools Smartmanager.cloud and Smarteedu.cloud support the ordering of work processes, competencies and communications, helping managers regain control over organizational and information chaos.

Heuresis - we develop those who develop others.