McKinsey’s recent research identifying 18 high-growth “arenas of competition” has captured significant attention in the business world. These industries—from AI software and electric vehicles to cybersecurity and space—could generate up to $48 trillion in revenues by 2040. It’s compelling data. But here’s what gets lost when we fixate on the industries themselves: the real competitive advantage won’t come from simply being in the right arena. It will come from having leaders who can navigate the unprecedented complexity these arenas demand.
At Beacon Consult, our work with scaling organisations across multiple sectors has shown us something critical: high-growth environments don’t just require different strategies—they require fundamentally different leadership capabilities. And most organisations aren’t building them fast enough.
Why High-Dynamism Arenas Break Traditional Leadership
McKinsey defines these arenas by two characteristics: exceptional growth and extreme dynamism. That second factor deserves more attention than it typically receives. In these environments, market rankings can flip dramatically within a decade. New entrants can rapidly displace established players. The competitive game resets constantly.
This creates a leadership paradox. Leaders need to drive execution with relentless focus while simultaneously questioning whether their current approach will be obsolete in eighteen months. They must build organisational capability while knowing that capability might need complete reconfiguration. They need teams aligned around strategy while maintaining the cognitive flexibility to pivot when conditions shift.
Traditional leadership development—built for more stable environments—doesn’t equip people for this reality. We’ve seen this firsthand. When we worked with organisations scaling across multiple international markets, the technical strategy was rarely the constraint. The constraint was whether leaders could hold multiple competing truths simultaneously: we need rigorous systems and experimental mindset; we need to protect our core business and cannibalise it; we need confident decision-making and radical intellectual humility.
The Three Leadership Capabilities That Actually Matter
Through our work supporting organisations in high-growth contexts—from supporting Malaysia Airlines through crisis transformation to helping scaling Australian businesses navigate complex change—we’ve identified three leadership capabilities that separate organisations that thrive in dynamic environments from those that fracture:
Adaptive Strategic Thinking
In arena environments, the ability to execute a three-year plan becomes less valuable than the ability to sense when that plan needs fundamental revision. This isn’t about lacking commitment—it’s about distinguishing between productive persistence and expensive stubbornness.
The leaders who succeed develop what we call “strategic optionality.” They make decisions that keep multiple paths forward viable rather than over-optimising for a single predicted future. When we facilitate strategy sessions with leadership teams, this is consistently the hardest shift: moving from “what should we do?” to “what should we do that keeps us able to respond to what we don’t yet know?”
Leading Through Escalatory Competition
McKinsey’s research highlights that these arenas are characterised by “escalatory investments”—companies must continually increase R&D spending and capability development just to maintain position. This creates immense pressure on organisations and their people.
Leaders in these contexts must become exceptionally skilled at managing sustainable intensity. They need to create cultures that can maintain high performance over extended periods without burning people out. They must be honest about resource constraints while inspiring teams to find creative solutions. This requires a level of emotional intelligence and cultural awareness that most leadership development programs barely touch.
In our coaching work with senior executives, we often find that technical competence got them to their current role, but it’s these softer capabilities—managing energy, building psychological safety, having difficult conversations—that determine whether they’ll succeed at the next level.
Building Organisational Learning Velocity
In stable industries, organisations can learn incrementally. In dynamic arenas, the organisation that learns fastest wins. This isn’t about training programs—it’s about building cultures where learning happens at every level, continuously, embedded in how work gets done.
This requires leaders who can facilitate honest reflection without blame, who can extract insights from both successes and failures, who can create space for experimentation while maintaining operational discipline. It requires teams that trust each other enough to surface problems early rather than hiding them until they metastasize.
When we supported the Victorian Bushfire Reconstruction and Recovery Authority, the stakes couldn’t have been higher. What made the difference wasn’t having all the answers upfront—it was building a team that could learn together rapidly enough to respond to constantly evolving needs.
What This Means For Your Organisation
If your organisation is in—or affected by—one of these emerging arenas, the strategic question isn’t just “are we positioned in the right markets?” It’s “are we developing leaders fast enough to navigate the complexity those markets demand?”
The uncomfortable truth is that most leadership development moves too slowly for arena environments. By the time you’ve run people through a nine-month program, the competitive landscape has shifted twice. You need approaches that build capability in real-time, embedded in actual business challenges.
This is why we’ve built Beacon Consult’s approach around high-touch executive coaching and team development that happens in the flow of real work. When we partner with scaling organisations, we’re not just developing generic leadership competencies—we’re building the specific capabilities that their particular challenges demand, at the pace those challenges require.
The next big arenas of competition won’t be won by whoever makes the smartest technology bets alone. They’ll be won by organisations that develop leaders capable of operating in unprecedented complexity. That’s where the real work begins.
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