The Real Issues Testing Australian Business Leaders Right Now

Having had deep conversations with 12 highly respected CEOs across broad industry sectors over the past month, my strongest impression is this: confidence has not disappeared, but it has become far more selective.

Australia is not in crisis, but it is certainly not enjoying strong momentum. The latest GDP figures show the economy grew by just 0.3% in the March quarter 2026 and 2.5% over the year to March 2026. That aligns with what I am hearing directly from CEOs: demand is patchy, decisions are slower and leaders are working harder than ever to achieve growth.

Beyond what I am hearing, our consulting work is showing similar patterns. Hiring decisions are stalling, internal promotions are being prioritised, senior roles are being re-scoped into lower-cost general management positions, internal talent teams are under greater pressure and, in some cases, low-cost executive search options are being considered.

“Confidence has not disappeared, but it has become far more selective.”

Locally, Victoria feels particularly exposed. Ai Group has described Victoria as having “some of the weakest economic conditions in the country”, with weaker business sentiment, higher debt concerns and a perception that other states are becoming more attractive places to invest and operate.

What makes this business environment difficult is not simply economic softness. There is an overlay of geopolitical unrest, energy volatility, oil and fertiliser supply pressures, raw material shortages, fragile supply chains and rising operating costs.

Despite this, the market is not uniformly weak. Sectors such as data centres, defence, advanced manufacturing, cybersecurity, agribusiness, critical minerals, AI-enabled technology and renewable energy continue to offer growth opportunities. Others are clearly under strain.

The market is uneven, and that unevenness is shaping how CEOs think about leadership, talent and the future of their organisations. The CEOs I speak with are asking very focussed questions:

• Do we have the leadership capacity to manage through ambiguity?
• Are our people leaders commercially astute enough?
• Is our succession pipeline fit for the next five years?
• Where and how will AI genuinely improve productivity, versus simply adding noise?
• How do we retain critical talent to deliver our strategic objectives?

Another theme emerging from the market is the shortening tenure of CEOs. In many cases, this is not simply about individual performance. It reflects unexpected market shifts, compressed decision-making timelines, changing Board expectations and increased scrutiny from stakeholders. When leaders are unable to pivot quickly, the consequences can flow through people, structures, culture and engagement. Boards are therefore asking a different question. It is no longer simply, “Can this person do the job?” Increasingly it is, “Can this person change tack when the previous strategy or the tried and proven process no longer works?”

“What got us here today will not get us through the next five years.”

One could argue these questions have always been asked. However, the speed of change and changing market demands are accelerating at a pace not experienced before. As Dr John O Burdett, global thought leader and author on leadership and culture, said recently: “Things are faster now than they’ve ever been and slower than they ever will be.”

The role of the CPO is also changing quickly. The best people leaders are helping shape business strategy. Workforce design, leadership capability, culture, productivity and AI adoption are now central business issues.

AI is also becoming a practical operating issue, not just a strategic discussion. Organisations are now budgeting for AI tokens, licences and platforms. These line items are meaningful P&L costs. Others are appointing Chief AI Officers or establishing internal teams to champion implementation and test use cases. Those embracing AI and technology, even if they don’t understand it in totality, know that doing nothing will leave them behind and allow the competition to lead their market.

The best examples of organisations tackling the AI tsunami are those not trying to solve everything at once. They are taking small, structured steps to implement, assess change, improve processes and move forward again. At the same time, trust and data integrity are becoming even more important. In a market increasingly concerned about incorrect, incomplete or fake content and data, leaders need confidence in the quality of the information they are using to make decisions.

My view is that in this market, organisations will be separated by the quality of their leadership. Current conditions call for leaders with judgement, resilience, commercial discipline, customer connectedness and tech savviness, including a practical understanding of where AI can create value.

The encouraging point is that this can be done. I am seeing CEOs and executive teams make thoughtful, disciplined decisions now that will position their organisations strongly for the next cycle. They are not waiting for certainty. They are strengthening leadership capability, sharpening succession plans, rethinking workforce design and ensuring their best people are equipped to lead through ambiguity. Importantly, they are also recognising that transformation cannot rely on one-off initiatives. It requires structured, repeatable change management that builds confidence and momentum over time.

“Boards and CEOs are asking for our judgement, specialist market intelligence and real-world perspective.”

These factors are also changing the nature of the conversations I am having with Boards and CEOs. They are not simply asking for candidates. They are asking for our judgement, specialist market intelligence and real-world perspective on what leadership will be required in the next cycle.

The role of executive search is shifting accordingly. Clients expect efficiency and intelligent AI utilisation. But they still value, and increasingly expect, human judgement, nuanced talent insights and market interpretation, and advice that is not readily available through internal channels or automated tools.

In a market where growth is uneven, confidence is fragile and uncertainty is constant, leadership quality is the main differentiator. The leaders who will set their organisations apart are those who can better read the market, make disciplined decisions without perfect information (and often imperfect teams), continue to develop the teams around them and apply AI practically to improve productivity, decision-making and competitive advantage.

TRANSEARCH works with Boards, CEOs and executive teams to assess leadership, strengthen succession plans and align talent to help organisations make confident decisions in uncertain markets. If your organisation is reviewing its capability or needs leadership advisory support, I would welcome a conversation.