The latest King & Wood Mallesons Directions report for 2025: Stepping Up to the Productivity Challenge, makes one thing clear: 2026 is shaping up to be a year of competing pressures.
Leaders are being asked to adopt AI faster, lift productivity, and hold costs steady – all while leading teams that are already stretched.
It’s a tough combination: higher expectations, tighter constraints, and a workforce with limited bandwidth.
And here’s the quiet truth many leaders admit in coaching sessions but rarely say out loud:
“I’m being asked to deliver more than the current system can sustain.”
But while productivity, AI adoption and cost discipline feel like operational challenges, their success ultimately rests on something far more human:
How leaders choose to lead.
I recently worked with a leadership group who had been asked to lift performance by 15% with zero additional resources. Their instinctive reaction was exactly what most leaders do under pressure: more meetings, more oversight, more urgency.
The result? A team that became even more fatigued and disengaged.
The problem wasn’t the target – it was the leadership pattern.
When we deliberately slowed the pace and shifted to a coaching-style rhythm, everything changed. Leaders moved from telling to asking. The team surfaced bottlenecks no one had noticed. They cut unnecessary steps. They took ownership.
The improvement didn’t come from pushing harder.
It came from thinking clearer and sharing responsibility.
That’s the opportunity for leaders in 2026.
1. Productivity improves when ownership improves
You can tighten controls, mandate more processes, or roll out new tools – but the biggest productivity gains come when people feel genuine ownership of the work.
Leaders create that ownership through questions, not instructions:
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What’s slowing us down?
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What should we stop doing?
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What’s the one improvement that would make the biggest difference this month?
When people think more, they wait less.
When they own more, leaders rescue less.
This is productivity by design, not by pressure.
2. AI adoption succeeds when people feel confident – not overwhelmed
The report highlights AI as a top strategic priority, but introducing new technology doesn’t automatically improve performance. People do.
Leaders accelerate adoption when they help their teams:
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identify friction points,
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explore tools safely,
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experiment without fear,
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integrate AI where it genuinely makes work easier
This isn’t a technical challenge.
It’s a relational one.
Curiosity beats compliance every time.
3. Cost discipline requires better conversations, not tighter control
In cost-constrained environments, leaders often default to tightening reins.
But the smartest leaders create clarity instead of compression.
Better conversations about priorities, performance, expectations, and trade-offs prevent rework, reduce duplication, and speed up delivery.
Culture becomes a cost lever.
2026 will reward deliberate leaders
Leaders who pause long enough to think.
Who ask before they tell.
Who empower their teams to take responsibility rather than wait for direction.
The organisations that win the productivity challenge won’t be those with the newest tools – they’ll be the ones with the leaders who bring out the best in the people using them.
If you’d like to explore how our Leader as Coach program can help you solve a productivity problem, check out our program here.
