Redesigning capitalism: Lessons in fear, courage, and leadership from Iceland’s president

Every so often, you sit in a room and hear a message that catches the moment with unusual clarity. That happened at London Business School this week, when President Halla Tómasdóttir joined the Wheeler Institute to speak about leadership, purpose, and the future of our economic model. Her argument was compelling, deeply uncomfortable, and timely.

At its core was a simple idea: the climate crisis is not only a technological or financial challenge. It is a design challenge in our economic system, and a human challenge in how we lead.

We have spent fifty years optimising a model built on narrow definitions of success. Quarterly reporting, shareholder primacy, externalised costs, and the assumption that profit must come first and everything else comes later. It delivered growth, yes but it also delivered planetary overshoot, rising inequality, frayed mental health, and a global economy now held together by brittle systems and even more brittle trust.

We are living inside a design problem. And design problems cannot be solved by tinkering at the edges.

The redesign begins with redefining success

This is where Tómasdóttir’s message lands squarely in the centre of the climate debate. We already have most of the technologies we need. We are not short of capital; there is more liquidity in the global system than ever before. What we are short of is the courage, vision and urgency required to change the rules of the game, the metrics, incentives, and horizons that drive behaviour.

That is why the emerging international sustainability standards matter. Not as another reporting burden, but as a structural correction. If we widen our definition of value, we widen the set of behaviours that markets reward. The transition becomes not a moral sacrifice but a strategic inevitability.

The real obstacle is human, not technical

The real barrier to progress is not technology, money or a lack of ideas.

It is fear.

“Fear lives in our heads and is paralysing; courage lives in the heart,” President Tómasdóttir said, stressing that courage must be “sandwiched with humility,” because no leader, no matter how experienced, has the full picture. It is one of the most honest diagnoses I have heard from a head of state.

Fear of markets.

Fear of boards.

Fear of saying the wrong thing in a world ready to pounce.

Fear of being the first mover if others stay still.

In a moment that demands boldness, we too often get caution disguised as prudence. And when the system nudges everyone towards conformity, the same schools, the same mental models, the same incentives, we should not be surprised that old patterns persist long after their usefulness has expired.

Leadership must widen across generations, across the globe, across race, across class and crucially, across gender

Perhaps Tómasdóttir’s most powerful argument was that solving systemic problems requires systemic leadership. Not heroic individuals, but broader tables.

And here she was unequivocal: gender equity is not a side-issue. It is a structural pillar of a better economic model. When women participate equally in leadership, we see more collaboration, longer time horizons, deeper focus on wellbeing, and a greater instinct to weigh societal impact alongside financial returns. These are not soft values; they are the hard wiring of a more resilient capitalism.

She paired this with a call for intergenerational dialogue, the courage to let younger voices into rooms traditionally reserved for the experienced and a deeper partnership with the global South, whose lived experience of risk and resilience is essential to designing a workable future.

It is a vision of leadership as something distributed, not concentrated; something unlocked together, not held by the fortunate few.

The path ahead

What I took from the evening is that we are not facing an innovation deficit; we are facing a courage deficit. The courage to redesign, to experiment, and to let go of an economic operating system that no longer fits the world it helped create. And just as importantly, the courage from political and business leaders to share power, widen the circle, and bring in the diversity of voices we need to build a fair and genuinely just transition.

And yet there was real optimism in Tómasdóttir’s message. Not the naïve kind, but the grounded confidence that humanity has the tools, insights, and resources to meet this moment. What we need is the willingness to step into a broader definition of leadership, and a broader definition of success.

If there is a single takeaway, it is this: the future will not be built by people who pretend to have all the answers. It will be shaped by those willing to lead with courage, humility, and purpose and by those able to redesign the systems we have inherited rather than simply operate them.

That is the work ahead of us. And it is work worth doing.

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