Managers and geopolitical crises: Three levers for resilience

Sometimes, all it takes is a tweet or an announcement to plunge the global economy into uncertainty. On April 2, Trump’s announcement of new tariffs dealt yet another blow to an already fragile balance, already shaken by the pandemic, wars in Ukraine and Gaza, and ongoing geopolitical tensions.

While no one can predict how long this uncertainty will last, managers do have three levers to navigate the new landscape.

1. A new role: The Chief Political (Risk) Officer. Risk management has become a non-negotiable. It’s no longer enough to keep an eye on interest rates and exchange rates; what’s needed is a broader, more strategic vision. Every company today should consider appointing a figure who, in recent discussions, has been described as a “chief political officer” or “chief political risk officer.” This is someone who can interpret, decode, and advise on how to face geopolitical risks. Until recently, this role may have seemed the domain of large corporations, but now, even mid-sized companies must consider it necessary.
2. A new imperative: Growth. Diversification is a fundamental concept in risk management. It applies to investment portfolios, and it applies to businesses. The most obvious forms of diversification are geographical and product-based, but they’re not the only ones. However, to diversify effectively, companies need to achieve a certain scale, which is hard to achieve through organic growth alone. That’s where M&A comes into play, allowing companies to use available liquidity to acquire others, strengthen their position, and weather disruptions more effectively. Think raising capital is hard? It probably is, but let’s not forget that we’re in a period of exceptional cash availability. The cash in circulation today amounts to 120% of global GDP. This is a major opportunity for companies and a potential buffer for the global economy against the risk of recession. 

3. A new asset: Young talent. Third, invest in talent. Bright minds are essential. With the right hires, integration becomes plug-and-play. And what defines the “right” people? Agility, humility, curiosity, and open-mindedness. Even in the smallest businesses, having team members with different backgrounds and passports is a real asset. And by “small businesses,” I mean everyone, down to the neighborhood shop. The new generation, especially those with a STEM orientation, has a competitive edge: they’ll be able to quickly integrate artificial intelligence into traditional processes. No one knows exactly how to do this yet, but young people have a natural ability to merge the new with the old.

Other paths look far bumpier. While globalization remains a buzzword, reshoring is making a comeback. Many business leaders admit they no longer know where the components of their products are actually manufactured. And if that’s the case, they’re also unable to assess how geopolitical upheavals might affect them. That’s why bringing some production back home has become a tempting idea. A certain degree of reshoring could help recover industrial know-how and the ability to “make things.” But complete reshoring is neither possible nor wise. It would require infrastructure, energy sources, and skills that can’t be built in just a few years. A partial return makes sense, but even that is difficult without a robust industrial policy.

While reshoring is understandable, it cannot be the systemic answer to the world’s new geopolitical balances. Europe, for example, must rethink its production model not by turning inward, but by aiming for greater integration, simplification, and scale.

No scale, no game. In a world where the US and China host the largest and most innovative companies, Europe can only stay in the race by helping its companies grow, retain talent, and attract investment. This doesn’t mean abandoning its ecosystem of small and medium-sized enterprises, but enabling them to scale up, merge, and internationalize. Encouraging a culture of collaboration, supporting mergers, and creating more streamlined and harmonized regulatory frameworks across EU countries has become an industrial and political necessity. It’s a good sign that the European Commission is adopting a “Startup and Scale-up Strategy” influenced by the Draghi Report and Letta Report.

To counter potential export declines, European companies need a more efficient single market and an ecosystem that can help them compete globally. In this context, standardization remains an unresolved issue—consider that Europe still has different chargers for phones and five different radar systems. It’s a clear example of how fragmented the EU remains—too fragmented, in fact, to face global crises as a unified actor.

Even on the financial front, signals abound. Recent selloffs of Treasury bonds and US dollars suggest the global monetary landscape may be entering a phase of more intense currency competition, also driven by the rise of digital currencies. The ECB is preparing to launch the digital euro, while other central banks are already operational. This shift is more than technological, since it redefines the role of central banks and the very foundation of trust in the system.

At the same time, sustainability is shedding its “compliance exercise” label and emerging as the new battleground for competitiveness. Not because it’s trendy, but because it’s rational: water and food scarcity, growing inequality, and social tensions are direct threats to future profits. Those who want to keep producing and growing will have to help close these gaps. In sectors like insurance, sustainability is no longer an ethical option but a tool for risk mitigation.

Lastly, the demographic factor may be the most underestimated variable reshaping the economic landscape. Today, most asset ownership still lies with older generations. But between 2031 and 2033, Gen Z will become the majority, and they will bring a very different mindset: less focused on ownership, more oriented toward usage, more sustainability-conscious, and more fluid in their expectations.

This transformation, along with the adoption of artificial intelligence in even tightly regulated areas like auditing, is already deeply changing how companies operate. But the direction is clear: survival won’t depend on strength, but on adaptability. And on leveraging what remains the most valuable form of intelligence: human talent.