In today’s uncertain landscape, giving a geopolitical team a seat at the C-suite table can give forward-thinking companies a competitive edge.
Geopolitical uncertainty is redefining the business environment. Long-standing assumptions about unfettered globalization no longer hold and are being replaced by regional blocs, trade restrictions, and protracted conflicts that reshape supply chains and markets. In fact, nearly three-quarters of CEOs now say they are rethinking their strategies because of geopolitical instability, according to The Conference Board Measure of CEO Confidence. Yet most organizations are still structured for a bygone era, with fragmented—or even conflicting—approaches to managing geopolitical risk.
To thrive, businesses will need to integrate geopolitics into their corporate planning with a dedicated internal capability that can anticipate disruptions, prioritize proactive responses, and uncover new growth avenues. A dedicated strategic geopolitical function at the executive level can provide the foresight and coordination needed to help companies not only survive the uncertainty but also turn it into a competitive advantage.
The new reality for executives
Today’s executives are rapidly adapting to an environment where uncertainty is the norm rather than the exception. From evolving sanctions regimes to shifting technology standards, political events directly shape market dynamics. Today, 76 percent of global CEOs are reevaluating their business models due to geopolitical tensions, according to The Conference Board Measure of CEO Confidence.
For about 40 years, globalization delivered a relatively stable backdrop. Executives assumed that the free flow of goods, services, and capital would persist indefinitely. Geopolitical issues were addressed as one-off considerations—such as evaluating a new market entry or handling a specific regulatory hurdle—rather than as ongoing challenges. This legacy approach now falls short. While leaders acknowledge the rising tide of uncertainty, most have yet to adopt institutional frameworks to deal with geopolitics as an integral part of the business.
Embracing geopolitical sophistication is not just about risk mitigation; it’s about unlocking competitive advantage. In a Foreign Affairs poll of 500 institutional investors in 2024, geopolitics was “the top risk to the global economy and markets.” Companies that embed geopolitical foresight into their strategies can pivot faster than their rivals, reallocate resources more effectively, and capture emerging regional growth opportunities. In this landscape, geopolitical competence becomes as crucial as operational excellence or digital innovation.
Clarity in geopolitical decision-making
Excelling in this increasingly complex environment requires a coherent framework for addressing geopolitical issues, including assigning explicit roles, setting up systematic processes, and embedding geopolitical intelligence into everyday workflows. The recent surge in trade restrictions and strategic resource competition underscores that causal or ad-hoc approaches are no longer enough. As rising trade barriers threaten to fragment the global economy, the IMF estimates that worldwide economic output could be reduced by up to $7.4 trillion. Estimates such as these in today’s geopolitical environment accentuate the need for real operational foresight to ensure that every level of the organization knows who to turn to for geopolitical guidance and how such intelligence informs both strategy and operations.
The era of stable, predictable globalization is over. With escalating trade tensions, regional power shifts, and ongoing conflicts, executives face complex and evolving geopolitical realities. Treating these issues through ad-hoc efforts is risky and increasingly uncompetitive.
Read the full article by Ben T. Smith IV, Drew DeLong, Colette LaForce / Kearney
