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The global order is fragmenting. How can leaders anticipate geopolitical risks?

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Getting ahead of geopolitics

In the news

•

More volatility. Businesses could confront additional volatility in 2023 as tensions between major world powers come to the fore. No longer relegated to dinner party talk, geopolitics have become a chief concern for executives, according to one expert. More and more countries are using financial measures to achieve strategic national goals. That means complications such as economic sanctions and trade restrictions. C-suite leaders are looking to establish geopolitical risk management functions at their companies. [WSJ]

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Diversifying supply chains. High inflation, increasing interest rates, and strained international relations are prompting companies to reconfigure supply chains for greater resilience. Businesses are navigating a raft of challenges, including Europe’s energy crisis and the possibility of regional conflicts in Asia, the latter of which could disrupt an important source of electronic chips. Since relying on a single supplier is risky, many companies are turning to dual sourcing, says one business school professor. [FT]

In our era of volatility, the need for board-level strategic conversations on geopolitical risk is vital.

On McKinsey.com

•

What concerns CEOs. The global order is still reeling from disruptions related to the war in Ukraine. A central concern among global CEOs we have spoken with is whether and how they will contend with additional geopolitical ruptures when they occur, reveal McKinsey senior partner Andrew Grant and coauthors. Even as boards and CEOs work to build capabilities in managing risks and developing geopolitical resilience, looking around the corner has become key to strategy and performance. In other words, scenario planning is squarely back.

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Anticipate risks. Geopolitical scenarios can be viewed through three lenses: black swans, gray rhinos, and silver linings. The first, black swans, are commonly known as unexpected events that carry major impacts. The war in Ukraine was arguably the core case study in 2022. Although black swans are inherently unpredictable, anticipating as wide a range of scenarios as possible is crucial for sound planning. Consider how organizations might both anticipate geopolitical risks and define their role in shaping the environment around them.

Develop geopolitical resilience

— Edited by Belinda Yu, editor, Atlanta

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by "McKinsey On Point" <publishing@email.mckinsey.com> - 11:21 - 12 Mar 2023

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The global order is fragmenting. How can leaders anticipate geopolitical risks?

Getting ahead of geopolitics

In the news

In our era of volatility, the need for board-level strategic conversations on geopolitical risk is vital.

On McKinsey.com

Archives

in

info@learn.odoo.com

The week in charts

Test Smarter, Sleep Better With Design-First API Contract Testing: A Real-Life Scenario

The global order is fragmenting. How can leaders anticipate geopolitical risks?

Getting ahead of geopolitics﻿

In the news

In our era of volatility, the need for board-level strategic conversations on geopolitical risk is vital.﻿

On McKinsey.com

Getting ahead of geopolitics

In our era of volatility, the need for board-level strategic conversations on geopolitical risk is vital.