Geopolitical Risk is Back.
Not your fault – but it is your problem.
Geopolitical risk is back with a vengeance, and for some of you, this is uncharted territory. These new risks will cap upside potential for deals and businesses, while excacerbating any missteps. Think of risk as a tax, requiring smart plans to analyze and respond. Panicking over every data point is counterproductive, but blindly ignoring the risks could be worse.
Geopolitical Risk
Last week, commercial traffic at the Texas border faced 24-hour delays as officials searched for threats. Meanwhile, a project I led in new market mere weeks ago is now off-limits. Since Covid bans lifted, there are 3 regions I can no longer visit freely, including 2 I used to frequent.
For those working abroad, the threats are real. Some of you may become targets. We have to meet this challenge head-on by evaluating geopolitical, financial, and business risks.
Financial and Market Risk
Market crashes and financial turmoil seem to be lurking constantly. While geopolitics brings new variables, we’re already scanning horizons for economic risks. Expect oil prices and other shocks.
Business and Human Capital Risk
This hits closest to home. Safeguarding lives is the priority. Do a quick audit of where your people are located, travel, and live. Could any face new dangers? Then look at operations – could markets, shipping, travel, or partnerships be impacted? Focus risk analysis only on what truly matters.
Response Plans
You aren’t responsible for the risks, but stakeholders may expect you to have a plan. Think through alternatives in case of disruption. And identify supply chain bottlenecks to address.
Don’t overreact, but don’t ignore the hazards either. Monitor issues without panicking. And don’t rely on old habits – continuously develop intelligence.
Questions to ask: Where can we operate safely? How do we get out if needed? What contingency plans are in place? Who can help troubleshoot alternatives? How will we communicate with stakeholders?
By planning ahead, you’ll be ready to advise others when crisis strikes. The time to scenario plan is before you’re forced to react in real time.
Prioritize revenues and customers. In chaos, focus on current clients versus new ones.
Final Word:
Geopolitics constrains growth and boosts costs. But ignoring risks is dangerous. If you’ll be looked to for plans after a shock, get ahead of the curve now.