Strong leaders redesign systems so productivity does not depend on physical presence.
THE war in Iran may be thousands of miles away from most countries but its economic impact is being felt globally.
The situation remains fluid even if President Donald Trump has announced that the war will end in the next few weeks.
From the ordinary taxi drivers in Thailand, who now found petrol stations shutting down, to street food hawkers in India having to close up because there are no gas cylinders available, to world leaders having to grapple with the price of petrol.
The chief executive officers (CEOs) of companies may not be field marshals at the battle front but the war has hit them hard.
As heads of companies, they are required to navigate this dangerous territory of soaring energy costs, supply disruptions, inflationary pressure and renewed remote working.
For directors and senior executives, this is not merely a geopolitical story. It is a balance-sheet event, a workforce event and, ultimately, a leadership test.
They can ask the staff to work from home (WFH) to reduce the use of petrol but workers are asking who is going to pay for the home use of electricity for company work.
In every crisis, weak management reacts. Strong management recalibrates. This is when the leadership of CEOs are tested.
“Oil is not just another commodity; it is the economy’s bloodstream. When it spikes, everything else follows – transport, logistics, food, manufacturing and services.
“Supply fears tied to Middle Eastern instability have already pushed prices sharply higher, particularly because of risks to the Strait of Hormuz, a chokepoint for global oil flows.
“Higher energy costs quickly translate into higher production costs and consumer prices worldwide,’’ as one analyst rightly put it.
It’s very simple and we don’t need economists to tell us – sustained high oil prices will slow growth while pushing inflation up.
For most CEOs, this means margins are squeezed from both ends: costs rise while customers grow more price-sensitive.
Good boards recognise that energy shocks are not temporary inconveniences. They are structural shocks that demand structural responses.
Let’s get back to the issue of WFH. It’s deja vu really as this move is the same one normalised during the pandemic.
The International Energy Agency has explicitly recommended remote work as a demand-reduction measure to ease pressure on fuel consumption during the crisis.
Forward-looking management teams are reframing hybrid work not as an employee perk but as a cost-management strategy.
Reduced commuting lowers wage pressure for transport allowances, trims corporate travel budgets and can even reduce office energy consumption.
But effective remote work requires more than laptops and video calls.
It demands clear performance metrics, strong middle management, cybersecurity investment and a culture of trust.
Research from the Chartered Management Institute (CMI) found that employers that take the time to invest in that culture and lead with trust reap the rewards of retaining the best and brightest staff.
In times of uncertainty such as an energy shock, staff turnover is the last thing you want to add into the mix.
Anyone who has been charged with recruiting new hires knows that it takes both time and money to bring in someone new and train them up.
The smarter leader doesn’t risk losing good people in the first place.
Over a third of managers told CMI that flexible working (including fully WFH and hybrid models) was the top reason they remain at their current organisation.
Three in five managers (60%) believe flexible working that includes WFH is one of the top three most important factors for organisations to offer, followed by positive and inclusive workplace culture (38%) and competitive salaries and benefits (36%).
But I have to confess that I am an old school taskmaster.
I like to see faces and to feel the energy in the office. This is the result of spending over 40 years in the newsroom.
Nevertheless, I have also embraced modern working tools and adopted new ways of working.
WFH without interference from colleagues and unproductive meetings, let’s face it, has enabled me to finish my work faster.
Weak CEOs fear loss of control because of their shortcomings including a lack of confidence.
Strong leaders redesign systems so productivity does not depend on physical presence.
Inflation management is not a finance function alone. It is a whole-company strategy.
Periods of geopolitical stress tend to tighten financial conditions.
Investors turn cautious, borrowing costs rise and capital flows retreat to safer assets.
The hallmarks of prudent management in such times include strengthening cash reserves, securing credit lines before they are needed, stretching payables without damaging supplier relationships, accelerating receivables collection and reviewing dividend policies
The fear of most CEOs is companies may fail not because they are unprofitable, but because they run out of cash.
But leaders need to keep their troops and morale high. Inflation hits employees as hard as companies.
Rising food, fuel and housing costs erode real wages, increasing stress, turnover risk and labour disputes.
Good leaders communicate early and honestly about the firm’s position and constraints, while exploring targeted support such as flexible work, transport subsidies for essential staff or performance-linked bonuses instead of permanent wage hikes.
In turbulent times, competence is not merely desirable. It is the most valuable asset on the balance sheet.
This is the time to reframe challenges, act with speed, ensure visibility to stakeholders, clients and staff.
As the late Colin Powell, an American general and diplomat, said: “Leadership is solving problems. The day soldiers stop bringing you their problems is the day you have stopped leading them.’’
