As we close out a period of sustained uncertainty, many leaders across pharma, medtech, and diagnostics are asking the same questions: What just happened – and what comes next?
The past 12–18 months have tested organisations in ways we haven’t seen before. Economic pressure, geopolitical instability, and the rapid acceleration of AI have collided at once, creating a level of complexity that feels fundamentally different from previous cycles. This has forced boards and executive teams to make difficult decisions around cost, capability, structure, and strategy – often without the comfort of historical patterns to guide them.
This newsletter reflects on why 2025 was so challenging, what is genuinely different about the environment we are now operating in, and what leaders should be paying attention to as we move into 2026. It is written with one goal in mind: helping decision-makers cut through the noise and focus on what will matter most for sustainable growth.
Why 2025 was challenging and will 2026 be different?
2025 was a year defined by constriction and constraint. There was significant uncertainty about what would happen next – both geopolitically and within domestic political environments. Many compared this period to the Global Financial Crisis, but it was not the same. This cycle was less predictable, less cyclical, and far more complex.
Unlike the GFC, this was not purely an economic event. A major differentiator was the rapid emergence and impact of AI. In many ways, this represents a modern-day Industrial Revolution – a seismic shift occurring in real time. Economic pressure, political instability, and technological disruption all collided at once, creating an environment leaders had not previously navigated.
Looking ahead, 2026 feels materially different. Organisations have spent time responding, stabilising, and taking action during the constriction. There is now a noticeable shift in mindset among boards and executive teams – from caution to readiness. Energy is moving toward pivoting, refocusing on the future, and “getting on with it,” so businesses are positioned to realise growth in 2027.
The AI Reality: Threat, opportunity, or both? – leaders vs employee impact
The reality is clear: AI is the new industrial revolution, and it is already here. Boards and executive teams are focused on identifying and removing waste and leakage, optimising operations, and then driving growth – both through existing customers and diversification into new markets.
AI is critical across each of these stages. It elevates data from being informative to being truly strategic, enabling faster and more confident decision-making. This is where the opportunity lies, and it is genuinely exciting.
At the same time, the threats are real. AI will replace roles where work can be automated. There are also legitimate concerns around data leakage, privacy, and intellectual property. These risks are still being worked through and regulated, but they are well understood. Despite this, the balance is clear: when implemented thoughtfully and responsibly, the opportunities AI presents outweigh the risks.
Navigating business and growth pressures – balancing long-term growth with short-term cost constraints
At the core of every organisation, the reality comes down to revenue and profit. Over the past year, margins, revenue, and profitability have been impacted – there is no question about that. Funding pressures, alongside local and global industry and political complexity, have created a tougher operating environment.
Australia has also been deprioritised in the global market. In many cases, it is no longer seen as strategically important as it once was, and this has had a significant ripple effect. Budgets, launch timelines, resourcing decisions, and targets have all been impacted.
Balancing long-term growth with short-term cost constraints requires difficult decisions. Leaders are reassessing where to invest and where to pull back – particularly in areas such as AI, asset prioritisation, go-to-market strategies, and people. One consistent pattern we are seeing is the “de-ranking” of roles. Positions that were once VP level are being replaced by Executive Director roles, and Senior Directors by Directors or Associate Directors.
While this can create internal mobility opportunities, it does affect overall capability – particularly leadership depth. For many organisations, however, this is viewed as a short-term mechanism to manage costs while navigating uncertainty.
Never ending restructuring of workforce – do more with less
This is the reality organisations are facing. There is a high degree of uncertainty, and for the first time in many years, there is no clear or predictable cycle to follow. Many businesses are waiting for global decisions before committing to further workforce changes.
Will there be more restructures? Most likely, yes. Whether driven by cost reduction, reprioritisation, or digital and AI-enabled role replacement, workforce change remains a constant. While many organisations are moving from pure constriction toward pivoting, restructuring is still part of the landscape – and that is the reality leaders and employees must continue to navigate.
Workplace flexibility – where to next?
The direction is still evolving, but momentum appears to be shifting back toward the office. The expectation is increasingly moving toward four to five days per week on-site.
In the current environment, organisations are in an “all-in” mode – focused on protecting revenue, stabilising margins, and restoring profitability. The pendulum has swung away from flexibility as a primary focus and back toward execution, alignment, and speed. For many leaders, being physically together is seen as critical to driving the pivot and accelerating the path back to growth.
What is clear is that the period of simply waiting has passed. Organisations have absorbed the shock of constriction, and the focus is now shifting from survival to momentum. The question for 2026 is no longer whether change is coming, but how deliberately leaders act on it.
AI, workforce design, cost discipline, and growth strategy are no longer separate conversations. They are deeply interconnected, and the organisations that integrate them effectively will be best positioned to move forward. For pharma, medtech, and diagnostics leaders, this moment presents both risk and opportunity – but above all, it demands clarity of direction.
Those who make thoughtful, future-focused decisions now – while continuing to manage short-term realities – will be best positioned to unlock sustainable growth, capability, and confidence as we move toward 2027 and beyond.
About Hunton Executive
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