Published on the 19/02/2026 | Written by Heather Wright

You can’t manage what you can’t see…

AI acceleration, state-linked cyber threats and rapid technology disruption – along with wider geopolitical changes – are reshaping operating conditions for organisations across Australia and New Zealand according to the 2026 CEO Institute Survey. While leaders across both countries are planning for growth and increased digital investment, most have not made structural changes to meet the demands of the changing landscape, with many lacking the visibility required to respond confidently.

“We are witnessing a transitional period where leaders know they need to make changes to meet the demands of the AI era, but are hesitant to back that up with real action,” Richard Wynn, chief executive of The CEO Institute, told iStart. “But it’s not all despair, rather a cautious sense of optimism.”

“The real competitive advantage now comes from trusted data, visibility, and strong governance that enable fast, confident decisions in a world of constant disruption.”

“It’s important to recognise that CEOs are treading carefully in the modern world. With so much economic and geopolitical instability, there’s a lack of significant structural changes being made to organisational operations,” he adds.

The CEO Institute’s Strategy in an Age of Volatility: A CEO Perspective whitepaper, produced with Australian ERP and analytics provider Pronto Software, shows technology disruption, including AI, automation and cyber-risk, ranks as the third-most-cited challenge confronting survey respondents, selected by 16 percent of Australian and 18 percent of Kiwi respondents behind inflationary pressures and consumer-demand slowdown.

As volatility intensifies, many leaders are turning to AI to regain speed, visibility and control, with 22 percent of Australian and 16 percent of Kiwi businesses planning to prioritise digital transformation and innovation this year.

But Chad Gates, Pronto Software managing director, says many organisations still aren’t clear on what meaningful AI adoption looks like.

“Everybody thinks they need AI in their business, but they don’t always know what that really means or how to get the best out of it,” he says. “AI represents endless possibility, endless opportunity and endless fear of missing out.”

He notes that AI value depends on strengthening data foundations first, noting clean, governed data is a prerequisite for effective deployment.

The survey also highlights that technology disruption is compounding geopolitical risk, with 13 percent of respondents identifying cyberattacks linked to state actors or geopolitical tensions as a top threat in 2026. Gates says that number ‘feels lower than it should be’.

“CEOs probably should be more concerned about state-sponsored cyber hacking, particularly around things like denial of service and knocking people off air.”

Leaders also report a broader lift in exposure to trade shocks with almost six in 10 more concerned about geopolitically driven trade disruption than a year earlier. Wynn notes supply chain disruption is no longer a legacy issue of the Covid pandemic and trade-exposed economies like Australia and New Zealand are feeling this most intensely.

The CEO Institute’s February 2026 Pulse Report, on which the whitepaper is based and which surveyed 798 senior decision makers across A/NZ, finds 54 percent of leaders across the two countries expect domestic economic improvement in the next 12 months. The optimism is sharper in New Zealand, where 76 percent see improvement versus just over 50 percent in Australia.

Across internal priorities, growth and expansion leads the agenda (41 percent for Australia; 57 percent in New Zealand), followed by cost management/efficiency and innovation/digital transformation.

The report notes that while technology matters, it’s not the first thing on CEO’s minds, something the report says is ironic because ‘we keep getting “told” how much we should embrace AI “yesterday”’.

“Technology and AI are on the agenda. They are a critical part of the playbook, but they are being framed as enablers of growth and efficiency, rather than as the primary headline issue. That aligns with what the wider ecosystem is telling us.”

Structural change limited

Despite rising concern about external shocks, only around seven percent of organisations report making structural changes, such as supply chain diversification, in the past year, highlighting a lag between risk recognition and organisational redesign. Wynn describes the operating mood as tight optimism: Leaders are pursing growth while managing cost pressure and intensifying competition at home.

With leaders turning to AI to regain speed, visibility and control, the whitepaper links the action gap to limited end-to-end visibility across supply chains, inventory, cash flow and digital dependencies, arguing that data, not algorithms is the real constraint on AI and decision speed.

“Speed comes from visibility. You can’t manage risk you can’t see,” Gates says.

“Technology alone is no longer the differentiator,” Gates told iStart. “The real competitive advantage now comes from trusted data, visibility, and strong governance that enable fast, confident decisions in a world of constant disruption. If leaders cannot see what’s happening across their operations, suppliers and data flows, they simply cannot manage risk or act with confidence.”

Gates says while many organisations recognise this, the first practical step is to strengthen data foundations by improving ownership, quality, integration and security before pursing new tools or AI.

“Without that groundwork, innovation efforts will struggle to deliver real resilience or business value.”

When it comes to AI adoption, Gates says CEOs need to ask four key questions:

• How will any new AI investment directly improve productivity and reduce costs?
• Do we have the right data foundations to support it?
• What workflows can be automated to offset talent shortages?
• How do we adopt AI without increasing cyber risk?

The last one is especially important, Pronto says, since moving quickly without proper safeguards may boost short-term efficiency, but increase exposure to cyber threats, data breaches and operational disruption.

“Every technology investment needs to be looked at through both a productivity lens and a security lens,” Gates says. “Otherwise, throw caution to the wind and security out the door and you might be the most productive business to get hacked.”