These challenges no longer present a ‘polycrisis’. Ours is a ‘permacrisis’, where the inter-related nature of events results in profound impact and exponential change. Linear thinking and traditional metrics of measurement and constructs simply no longer suffice.
Our traditional leadership models are not well equipped to address societal challenges and are proving to be outdated. Now, leaders are required to be more conscious and agile, as the challenges we face can only be solved with a deep intercultural appreciation and collaboration toward collective action.
Contextual intelligence helps make better decisions. Positioned at the intersection of strategy and leadership, where dated constructs and approaches have delivered poor results in recent years, contextual intelligence offers a framework to make leaders better strategists. It encourages them to think and respond more comprehensively to specific situations, weigh up the consequences of their actions and decisions, and embrace multiple viewpoints simultaneously.
What is contextual intelligence?
Contextual intelligence combines leadership, strategic thinking, and economic behaviour and is the ability to function, manage, or adapt to diverse settings.
A high degree of contextual intelligence among companies and individuals can result in inclusive and impactful leaders and more successful, sustainable, and profitable businesses.
The term is not new; academic references to contextual intelligence date from the mid-1980s, when Sternberg (1988, 1995) used it as a synonym for his concept of practical intelligence.
Writing in the Harvard Business Review, strategy and international business professor at Harvard Business School Tarun Khanna described contextual intelligence as “the ability to understand the limits of our knowledge and to adapt that knowledge to an environment different from the one in which it was developed”.
“Conditions differ enormously from place to place, in ways that aren’t easy to codify – conditions not just of economic development but of institutional character, physical geography, educational norms, language, and culture.”
Contextual intelligence is the ability to apply acquired knowledge to real-world scenarios.
In strategy and leadership, it is the ability to recognise and diagnose the factors surrounding an event or scenario and intentionally adjust behaviour or a response that will influence the outcome.
“Understanding the limits of our knowledge, which is at the heart of contextual intelligence, is a fundamental component of human comprehension. Yet it’s also a difficult, complicated process,” Khanna added.
It starts with acknowledging and understanding our biases, frames of reference, and assumptions. To be contextually intelligent, leaders must pay attention to what is happening around them through enhanced awareness or simply a deeper sense of consciousness.
Contextual intelligence converges past events with current contextual variables and an awareness of a preferred future in a practical and culturally informed way.
A 3D thinking model
Author Matthew Kutz’s 3D thinking model illustrates how to use hindsight, insight, and foresight to navigate complexity. Context is informed by the past, in the present, with an eye on the desired future. Hindsight, or where you come from, allows you to be mindful of biases and how they influence decision-making.
“The contextual environment in which leaders must operate is increasingly complex,” Kutz explained. “Decisions must be instant, pragmatic, and offer real solutions for real problems.
There is a need for leaders who can diagnose the context they are in, then exercise their knowledge to know what to do amid changing and turbulent times.”
His model emphasises core mental models around embracing complexity, recognising the power of synchronicity or ‘joining the dots’, and tapping into one’s intuition, or what is often referred to as ‘trusting your gut’. We can relate to this in highly unpredictable and fast-moving environments lacking data and governing institutions that might help guide a quick diagnosis and decision.
The acquisition of new knowledge as a source of innovation can come from unexpected quarters. Kutz and Bamford-Wade wrote: “Synchronicity can be described as two [or more] simultaneous events that occur coincidentally; it is the idea that certain events, regardless of the context and time in which they occurred, are in some way related.”
Awareness of one’s surroundings and current context is crucial for identifying this information: “Recognising changes in perception, mood, and meaning requires an acute sense of what is happening around you and what is changing (and why) in the behaviours and attitudes of others. Both of these innovation sources require an acute sense of how others interact and behave.”
Why is it important now?
Current leadership models are stale and, some might argue, losing their relevance as they are increasingly inappropriate for the modern world.
Uncertainty, ambiguity and complexity have become the norm in a post-pandemic world.
Organisations have changed, as have the purpose and role of business.
Leaders and organisations must be future-orientated and become future-fit.
We are all subjected to an overload of information and content, influencing our worldview.
We all have innate biases.
Africa is a microcosm, representing the most daunting global challenges of our time. Crises on the continent are playing out in real-time, requiring a special awareness of the continent’s unique context. Solutions must come from within to be viable and sustainable.
Africa is expected to suffer disproportionately from climate change. While the continent is responsible for only a fraction of greenhouse gas emissions, climate change is “harming food security, ecosystems, and economies, fuelling displacement and migration and worsening the threat of conflict over dwindling resources,” according to a new report from the World Meteorological Organisation (WMO).
Beyond systems thinking
Contextual intelligence combines systems thinking, emphasising dynamic, non-linear interactions and contextual factors. It highlights adaptability and innovation as crucial for addressing complex global challenges. Systems thinking requires curiosity, clarity, compassion, choice, and courage, recognising that systems emerge from the interplay of their parts rather than their sum.
Leaders can develop contextual intelligence by enhancing adaptive capacity and monitoring behavioural cues in turbulent environments. Key traits include intentional leadership, critical thinking, consensus-building, cultural sensitivity, and future-mindedness. Contextually intelligent leaders embrace complexity, integrating intuition with data-driven insights and reframing experiences to harness learning and synchronicity.
A global mindset is vital for collective action. This involves fostering cross-disciplinary collaboration, engaging with local communities, and developing multicultural fluency. Leaders equipped with contextual intelligence can address urgent global challenges, such as climate change, demographic shifts, and rising inequality. For instance, climate change drives food insecurity and migration, while ageing populations and urbanisation strain resources. Meanwhile, public debt remains high, economic growth slows, and technological advancements risk deepening disparities.
To navigate such uncertainties, leaders must adopt 3D thinking—bridging past, present, and future—while fostering inclusivity and innovation. Contextual intelligence is vital for competitive advantage and humanity’s progress, equipping leaders to tackle the world’s most significant challenges. DM
GIBS faculty member Prof. Lyal White is the academic director of the Centre for Leadership & Dialogue (CL&D) and part of the school’s global partnerships team. He founded the research and advisory practice Contextual Intelligence, part of the OneEarth Leadership Consortium and a research associate with the Brenthurst Foundation. Lyal is committed to purpose-driven business and has a deep curiosity about the intersection of leadership, strategy, and economic performance.