Fire and Rain: Adapting to an Era of Global Instability 

Geopolitical risk is arguably at the highest level it’s been in 50 years. Here’s what organizations can do to protect themselves.  

Related on MHA Consulting: Global Turmoil Making You Ill? Try a Dose of Risk Management   

A World in Tumult 

There’s a consensus among the key executives I’ve talked to recently: the current global environment contains more risk for organizations than at any time in the last half century.  

The current conflicts between Israel and Hamas and Ukraine and Russia are just the tip of an iceberg that also includes the tension between China and the U.S. over Taiwan, the emergence of a nuclear North Korea, and the challenges at the U.S.-Mexico border.  

It’s getting hairy out there. 

America the Casual 

There’s one thing that stumps me, however. Many American businesses take a highly casual attitude toward the possibility that global problems could impact them. Many don’t seem to worry that much about the turmoil going on beyond our borders. They don’t even seem aware of it. 

In the past several months I’ve traveled to the U.K., the Middle East, the Dominican Republic, Guam, and Japan. On those trips, I had conversations with many business executives who are native to the various countries I visited. I was repeatedly struck by how well-informed the people tended to be about global affairs, especially compared to their U.S. counterparts. 

America has been lucky. September 11, 2001, was a terrible day—but for the most part we’ve had the luxury of treating foreign affairs as optional, at least compared to most other countries. Bordered on the east and west by oceans, and on the north and south by friendly neighbors, we’ve been able to skip the foreign news and jump right to the sports section without it causing us too many problems. 

I don’t think that’s a viable approach any more. Our reliance on other countries for supplies and markets—and on lengthy, highly vulnerable global shipping routes—is too high. In addition, recent innovations like cyberweapons and social media have given foreign actors the ability to harm us in ways few people imagined in the last century. 

How Business Can Adapt 

What should prudent, forward-thinking businesses and nonprofit organizations do in these circumstances? Simple: Take a good at where they are vulnerable to disruptions to their people, processes, and technology due to geopolitical forces, focusing in particular on threats pertaining to supply chain, cyber, and finance. Then develop ways to mitigate the threats, focusing on the threats that are the likeliest to occur and those which would cause the greatest impact if they did occur. 

For business continuity professionals, my advice would be, get ahold of your colleagues in enterprise risk and ask them how they assess the company’s geopolitical risks and what mitigations are in place. 

The current global environment is a place of fire and rain. But organizations can protect themselves by becoming aware of the global scene, assessing the risks it poses, and coming up with mitigations to contend with the most likely and serious threats. 

The Path to Security 

As the world endures a period of heightened geopolitical instability, organizations must recognize the increased risks they face. For American organizations, the luxury of treating foreign affairs as optional is no longer sustainable.  

Security lies in being proactive, adaptive, and prepared. Prudent organizations can shield themselves by understanding the geopolitical landscape, evaluating potential disruptions, and implementing strategies to address the most probable and impactful threats.  

Further Reading 

• Global Turmoil Making You Ill? Try a Dose of Risk Management 
• Every Single Day: Make Risk Management Part of Your Company’s Culture 
• Crisis Response in Today’s Breakneck World 
• Driving Blind: The Problem with Skipping the Threat and Risk Assessment 
• Weighing the Danger: The Continuing Value of the Threat and Risk Assessment