Geopolitics; An Inescapable Part of Global Business
- Charlotte Gorse
- Jul 8
- 2 min read
Geopolitics have become an inescapable part of global business. Increasingly DVCs, COOs and CFOs recognise this challenge, and are redesigning their operating system fundamentals to utilise business disruption as opportunity.
Geopolitical volatility is undoubtedly the new norm: transnational disruption is no longer episodic, it is a permanent feature of the business year, and one which presents opportunities to those brave enough to step forward.
In McKinsey’s recent article, ‘Managing geopolitical value at stake to seize opportunities while mitigating risk’, one CEO admits that ‘even in markets I once considered stable, we now have to account for geopolitical factors’.
CEOs of multinationals recommend two steps to gain an edge:
● first ‘quantify the value at stake’
● second ‘develop the agility needed’
Organisations that move quickly can expand into fast-growing economies, tap into related subsidies and gain market share. Those that don't risk seeing their value eroded by changing legislation, visa restrictions, supply chain disruption, and political unpredictability.
The data speaks for itself. Despite significant and well-reported disruption following recent events – Russia’s invasion of Ukraine, US tariffs and negative foreign exchange trends, US-China trade tensions – only 29% of businesses have actually calculated the financial impact. Consider your disruptions this year, what lessons can be learnt and quantified?
The second touchpoint, organisational agility, is where leading organisations are gaining ground on their competitors: regionalising markets, diversifying supply chains, renegotiating contracts, and localising technology and workforces. Reflect on new operating models, are these fully delivering on potential opportunities, as well as risks?
One global multinational surveyed leaned into this new precarity, and designed for it, not against it. When volatility spikes, it centralises risk and compliance; as conditions steady, it pushes decision rights back to local/ regional units.
Consider four steps to improve agility in the new year:
● Geopolitical dashboards;
● Local and regional capabilities and solutions;
● Pre-planned actions, should disruption begin;
● Rapid decision-making to deliver on new opportunities.
DVCs, COOs and CFOs, how can you lead your organisation to cultural and operational flexibility, regardless of next year’s disruptors?
