Stress intelligence: The new leadership competency

It may be tougher than at any point in recent memory for leaders at the top to navigate technological disruptions, fractured global supply chains, geopolitical unpredictability, and economic shocks to adapt and thrive in competitive markets. These unpredictable and unprecedented global changes are not only rupturing trade and economic growth but also straining leaders as they move from one crisis to the next.
The ability to deal with a crisis was once considered an exceptional demand on leaders, but has now become a baseline condition of their job. Recent studies suggest that stress levels among leaders remain high and, in some cases, exceed those during the Covid-19 pandemic. One plausible reason could be that the enemy was known during the pandemic, but now the world is fragmented, volatile, and uncertain, and the scope, scale, and direction of the crisis are unclear; hence, prioritising decisions is tougher.
Leadership wellbeing is still less discussed than organisational performance, but elevated stress levels can meaningfully affect decision-making, performance, and risk exposure. Most of us are aware that some amount of stress can be beneficial; it can enhance and accelerate cognition. Psychologists call it ‘eustress ’, a positive energising state that enhances rather than undermines capability. However, the fine line between optimal and excessive stress is thinner than most people realise.
When stress becomes chronic, leaders enter a state of overstress, which impacts cognitive and emotional capabilities. Once this threshold is crossed, their perception, attention span, memory, recall, and decision-making are impaired. In the first stage of decision-making, when framing the decision, leaders face restricted communication and gather limited information. In the second stage, the exploring stage, leaders' flexibility and creativity are reduced. They push towards short-term fixes at the expense of long-term consequences. Choosing the appropriate option is the final stage of decision-making, where stress distorts risk assessment.
In high-stress situations, the cumulative effect of the compounding errors can be dangerous. Business and political decisions have shaped the trajectory of trade and economics in addressing risks for decades. The unprecedented, systemic, and turbulent environments are creating a chronic state of stress for which leaders are ill-prepared. Science shows that stress degrades the quality of human judgment. Herein lies the multiplier effect of global risks.
The new skill that is needed to navigate turbulent environments and cognitive load is stress intelligence. This is not a wellness app or conventional breathing exercises. At a conventional level, stress intelligence is more fundamental. It is the capacity to recognise that stress is an integral part of leadership and to maintain decision quality under pressure. Stress intelligence begins with developing individual awareness of one's own patterns, understanding one's decision-making under high stress and in crisis, and building strategies to maintain performance under pressure. Evidence from leadership practice suggests that stress intelligence can be learned, and leaders can build their cognitive resilience. Teams can also have shared practices to ensure the quality of collective decisions.
The world is in a state of heightened uncertainty, and many experts expect this volatility to persist. Stress intelligence is a vital skill for leaders, as the ability to handle high stress levels will determine the quality of decisions. Leaders should accept the hard strategic reality and build stress intelligence to make sustainable decisions that impact multiple stakeholders. Leaders today operate under historically high cognitive load, so stress has become a primary variable shaping decision quality, yet it remains poorly understood as a leadership capability. We want a world in which leaders possess the Stress Intelligence required to make wise decisions that benefit organisations, societies, and future generations.