The New Year Effect and Why Habits Determine Your Future

Every new year brings with it a familiar chorus of advice.

“Lead differently.”

“Stop, start, reset.”

“This will be the year everything changes.”

The intentions behind the plethora of leadership guidance and our own often urgent desire for change are largely sincere. Many people enter January with a new routine, a sharpened focus, or a firm inner conviction that this time will be different. Before long, however, they find themselves returning to the very patterns they were determined to outgrow.

What stops us is rarely a lack of knowledge or motivation. As the father of modern psychology, William James observed more than a century ago, our lives are largely shaped by habit and the repeated patterns of thought and action that govern our days. James argued for better or worse, that habit is the great flywheel of human life, the mechanism through which our thoughts and actions become automatic. In his view, character itself is formed not through moments of insight, but through the habits we practise daily.

The clues are already there and if you pay close attention to the moment you wake, before the day takes hold, you can begin to understand what drives you and what is holding you back.  What do you feel (emotionally, physically, psychologically and even spiritually) before your feet hit the floor? What do you say to yourself? What is the first action you take? Do you reach for your phone, rush into the day, bracing yourself with anxiety for what lies ahead? These repetitive behaviours shape how we lead, decide, think, feel, and relate long before success, failure, strategy or intention has a chance to intervene.

The Transformation That Comes When Enough Is Enough

The first time I spoke with the CEO and founder of a fintech business we partnered with, it was impossible not to notice the weight of pressure she carried and how deeply she felt the need to prove herself. What followed in that conversation has stayed with me to this day. After years of ongoing conflict with her co-founders and relentless work hours, she began to see the cost of the path she was on and it greatly concerned her. She had poured her unresolved hurts, stress and fears into her work, believing that effort and being highly vigilant would eventually tame them. Instead, the pressure only intensified, and she finally realised that if she continued on this trajectory, she would never reach her full potential, and that she would continue to struggle to keep everything together. She would also remain trapped in a relentless cycle of carrying and emotionally fixing others at the expense of herself, feel undervalued and would ultimately find herself isolated, exhausted, and profoundly unhappy, the very opposite of what she had always hoped her life, work, and impact would represent.

Life had dealt her several painful moments, and for a long time she responded by pushing harder and reacting to everything placed in front of her. As Robert Kegan observes in his work on adult development, true transformation begins when we move from being controlled by our internal narratives to becoming aware of them and shaping them deliberately. That shift came when she stopped trying to outwork her inner state and began paying attention to how she spoke to herself, recognising that the way she related to her own thoughts was shaping in an unhelpful manner every decision she made.

When she reached the point where she could take no more, only then did something shift. She began to approach her work and her life differently, choosing to let go of judgment both of herself and of others and to build a steadier internal foundation. She became attuned to the moments when she felt inadequate, learned to discern which of other people’s words, jealousies, or grievances did not deserve her energy or when to assert boundaries and she even discovered how to navigate these challenges with measured emotional detachment, freeing herself to focus on what truly mattered.

The change was neither dramatic nor immediately visible, yet it was profound and compounded steadily over time. As her inner dialogue softened and strengthened in equal measure, her leadership and decision-making evolved alongside it. She attracted the right hires, grants and the business began to generate multiple revenue streams, scaling in a manner that was enduring and rewarding rather than exhausting. Ultimately, the company is now firmly on track for acquisition, the result of a carefully planned exit strategy.

What surprised her most was not merely the professional outcome, but how her relationships shifted as she transformed. Some people close to her, who had grown accustomed to seeing her struggle, gradually fell away. These were the ones who measured her worth by her hardship, asking questions with that faint look of pity: “How’s the business going?” or “How many clients do you have now?” a reflection of the story she had long believed about herself. In their place came relationships that mirrored her growth, people drawn not to her struggle, but to her wisdom, creativity, her energy, and the strength of her kindness.

For a long time, she believed that to succeed in business she needed to be tougher, more aggressive, more pit bull than Labrador. Rather than rejecting that instinct, she chose to refine it and learn the art of leverage. She invested in learning how to negotiate firmly without abandoning her warmth and professionalism, how to hold boundaries without damaging relationships, and how to lead with strength that did not require hardness. What she discovered was that power and humanity are not opposites; they are most effective when they coexist.

The Practice of Leadership

The lesson here is that leadership is shaped far less by what we declare at the start of the year, or at any single moment, than by what we practise consistently. It is formed in how we lift ourselves out of the trenches, the stagnation, or the daily chaos through repeated actions and choices. Until our habits shift how we think, how we speak to ourselves, how we perceive others, and how we respond under pressure the future will almost inevitably resemble the past. 

Begin by observing yourself, decide who you truly want to become, act deliberately, and then just do it, as Nike says.

Take the iconic path

Publisher, Writer & Founder

ICONIC Business Journal

Dijana Dragomirovic