Soft Power: Weak or Strategic Weapon?

How are leaders turning reputation into deal flow, resilience, and leverage?

Feb 13, 2026

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The 2026 paradox: more force, less progress

Looking around the world, raw power is back: wars, sanctions, aggressive industrial policies, and tight controls on critical minerals and technology. Yet, despite these hard moves, progress on our most important shared goals is stalling or reversing. Climate risks are compounding, and many SDG targets are slipping away. This shows a power paradox: more force on its own cannot solve shared problems.

And yet, soft power is still widely perceived as weak. The question for 2026 is whether you leave it as background noise - or use it to move beyond the status quo, open doors, align coalitions, and unlock outsized outcomes on shared problems.

One way to assess your own position is to run a quick experiment:
If you had to move a complex, multi‑stakeholder initiative in the next 12 months - in climate, health, education, supply‑chain resilience, or digital access - would partners actively seek you out as a convener, or treat you as just another stakeholder to be managed around rather than a partner to build with?
If the answer is the latter, your soft power is closer to a weak background signal than a strategic weapon. You are a variable to be handled rather than a partner to be aligned with. If it is the former, you possess Strategic Gravity – you are already converting reputation into deal flow, preferred access, and outsized gains in systemic resilience and impact.

The alternative: soft power as a strategic weapon

In 2026, many of my clients are exploring soft power specifically as a way to solve hard problems faster, with less friction, and with better economics. Soft power becomes a strategic weapon when it changes who will partner with you, how quickly coalitions form, and how capital prices your risk.

Here are ten reasons why this is the defining leadership lens for the year.

1. The end of growth at all costs

The market is no longer rewarding more for its own sake. It is rewarding leaders who use their influence to solve real, shared problems and can prove resilience over a 5–10 year horizon. Large investors are tightening capital for projects that only promise short‑term earnings, and boards are now expected to show credible Net‑Zero Transition Plans, robust supply‑chain strategies, and real downside protection rather than just upside stories.

Large banks are linking lending rates to climate and transition targets through sustainability‑linked loans, where borrowers receive lower interest if they hit agreed ESG milestones and pay more if they miss them. This shift from quantity of growth to quality of resilience rewards leaders who treat soft power as a risk‑pricing asset, not a PR exercise.

2. Removing friction where hard power gets stuck

Money and mandates often hit community or regulatory resistance whereas soft power - the trust you have accumulated with stakeholders - reduces this friction. In cross‑border green‑infrastructure, permits, social licence, and local partnerships are now as decisive as engineering and capital.

We see this in green‑hydrogen and renewable‑energy projects, where consortia backed by governments and firms with trusted partner status move faster through environmental and local approvals than technically similar projects from actors with weak ESG records. Communities and regulators are more willing to accept ports, pipelines, and corridors from players seen as transparent, fair, and long‑term, which effectively turns soft power into time‑to‑approval and cost‑of‑delay advantages.

3. Hard problems are uncrowded spaces

Most organisations are still optimising 1–2% efficiency gains in saturated markets. The hard problems - from climate adaptation and circular critical minerals to global health, education access, inequality, and AI governance - remain huge, structurally underserved spaces where a small number of actors can still shape the rules.

Early movers in areas like climate adaptation, circular critical minerals, and essential services such as health, education, and digital access are helping to write new norms and embed their standards into emerging alliances and frameworks, including critical‑minerals partnerships launched by G7 and allied countries in late 2025 and early 2026. These players are already locking in preferred‑supplier status and long‑term offtake or service contracts, while competitors wait for policy certainty that will arrive too late for them to claim those positions.

4. The agency revolution

AI and modular infrastructure mean you no longer need a staff of thousands to act globally. Small, highly trusted teams can now coordinate large interventions with Agentic AI handling analysis, coordination, and even elements of execution across borders.

Today, small AI‑first teams are running global logistics‑optimisation and climate‑risk platforms from a single hub, serving multinational customers without the traditional overhead of regional offices and large operational workforces. Their constraint is no longer scale technology but whether regulators, enterprise clients, and ecosystem partners trust their governance, data practices, and alignment with public goals.

5. Capital follows credibility

In a volatile world, serious investors are moving away from hype and towards resilience. Soft‑power signals - governance quality, rule of law, predictability, and perceived alignment with global norms - are being translated directly into the cost and availability of capital.

Countries and companies with strong reputations for reliability tend to enjoy lower borrowing costs, more stable access to financing, and deeper demand for their bonds and equity. Soft‑power and governance indices are now used by institutional investors as quantitative proxies for political risk and policy volatility, influencing everything from sovereign spreads to which projects qualify for blended‑finance and public‑backed de‑risking.

6. Reversing SDG setbacks as opportunity

When global goals move backwards, it creates waste, instability, and stranded risk. Leaders who move first to reverse those trends turn what looks like a global liability into a distinctive source of strategic advantage and durable demand.

Infrastructure and impact funds are targeting off‑track SDG areas such as clean water, resilient health systems, and basic digital access as growth markets, using local partnerships and tech‑enabled models to reach communities traditional, high‑friction models have failed to serve. This positions them as preferred partners for multilateral finance and government co‑investment, while also building long‑term customer bases in markets competitors still treat as too hard.

7. Talent follows mission, not just money

Top technical and policy talent are looking for real mission, not just salary. They want to see a clear line of sight between the work they do and the problems they care about. For younger professionals in particular, climate, equity, and AI safety are becoming core career filters.

Surveys show that a large majority of tech and digital candidates now factor environmental and social performance into their job decisions, with many explicitly preferring climate‑leading employers over higher‑paying laggards. This makes a credible mission and visible work on hard problems a retention moat that pure compensation cannot easily replicate.

8. Soft power as a crisis safety net

When a shock hits - a data breach, a safety failure, or a geopolitical incident - trusted leaders receive the benefit of the doubt. A pre‑existing trust surplus buys time, patience, and optionality that others do not have.

After major failures, organisations with strong histories of transparency and responsibility typically see faster recovery in sales, share price, and stakeholder engagement than peers with similar incidents but weaker reputations. Those with a trust deficit, by contrast, face immediate boycotts, divestment campaigns, and aggressive regulatory responses, turning the same operational error into an existential event.

9. Orchestrator, not just builder

By being a credible partner, you become the orchestrator - the reference client that the ecosystem wants to work with. In complex transitions, value increasingly flows to those who can convene and align many smaller builders around trusted standards.

Green‑shipping corridors and critical‑minerals alliances offer concrete examples: a small number of respected ports, governments, and firms are invited to anchor these coalitions, define technical baselines, and coordinate investment flows. Their soft power - reputation for fairness, competence, and reliability - gives them outsized influence over which technologies, routes, and projects become bankable, while latecomers are left negotiating from the margins.

10. Legacy is defined by difficulty

In 2026, legacy will be defined by which hard problem leaders chose to own, not how efficiently they managed business‑as‑usual. Even as hard power dominates the world stage, the leaders who are actually creating and capturing sustained upside are those who have visibly committed their soft power to system‑level challenges.

When boards, investors, and citizens list admired leaders today, they point to those associated with decarbonisation, pandemic resilience, and responsible AI - not those known only for quarterly outperformance. Respect now accrues to leaders who treat influence as a deployable asset for shared problems, and who can show concrete progress in moving those problems rather than merely commenting on them.

A Strategic Choice

We are entering a cycle where the biggest commercial and strategic gains are shifting from incremental optimisation to the orchestration of shared problems.

We see this in how nations work, including middle powers - as I explored in my recent piece on Australia, critical minerals, and soft power - and it is happening inside organisations of all sizes.
Middle Power, Bigger Game
Sophie Krantz
·
Feb 10
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Soft power is the trust and influence you can deploy; hard problems are the shared challenges where that effort can unlock outsized strategic and commercial gains.

In this environment, influence is a perishable asset. Using it to move a shared problem goes beyond doing good - it is a disciplined choice to capture the orchestrator’s premium and build resilience in an increasingly high‑friction world.

The key question is not if this matters, yet which hard problem you are prepared to put your influence behind - and what that choice will say about your leadership in 2026.

I’ll be exploring these concepts more over the coming weeks. I hope you’ll join me.

Soft Power, Hard Problems with Sophie Krantz

Middle Power, Bigger Game

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