FEBRUARY 2017 / NO. 1
TAGS: GEOPOLITICAL, BERLIN WALL, BRIC-COUNTRIES, QE, COMPANY RADAR ROOM

Geopolitical tensions and strategic intelligence

“The growing connected complexity in the world combined with growing geopolitical tensions is forcing companies to identify geopolitics which have a potential impact on their competitiveness”
“Many companies are aware of the growing risks in the external business environment, however, not that many are able to manage these risks proactively”
The world did not face many geopolitical tensions during the period from 1998 to 2008. After the fall of the Berlin Wall, we saw Pax Americana at its peak together with the Great Moderation: we experienced low inflation, low interest rates, stable economic growth, low rates of unemployment and the rise of the BRIC-countries. During this period, the number of business connections increased exponentially: as did interrelationships between companies and international markets, foreign suppliers, new production locations and global financial markets. The results were cost-efficiency, diversification and new markets, as well as growth of the interdependence of both geopolitical and macro-economic developments. This works well in periods of growing interdependence. But because of US misadventures in Iraq and Afghanistan, the financial, economic and euro debt crises, conflicts in 2017-2018 now concern geopolitical-economic events such as financial and economic sanctions, boycotts, exchange-rate manipulations, interest rates because of QE, amongst others. Many companies are aware of these developments, but only a few, however, are able to manage these proactively.

Identifying the potential risk with strategic intelligence

Companies can prepare themselves proactively for the strategic risks in their external business environment. This is strategic intelligence at its core! With strategic intelligence tools such as ‘Strategy under Uncertainty’, ‘War-Gaming’, ‘Grey Swan Analysis’, and ‘Corporate Radar Rooms’, we are able to identify relevant potential risks and uncertainties. After plotting them visually on an uncertainty and probability scale, we can analyze their impact. Companies do not operate as separate islands and remarks such as “it’s not going to happen to us” are collectively naïve. Companies are now an integral part of international society. Although we are unable to influence external risks, we can, nevertheless, identify them, analyze their impact, and mitigate their potential consequences on our own organization. Again, this is strategic intelligence at its core!
Strategic intelligence goes beyond data collection, big-data analytics, and market and competitive intelligence, towards integrating all the crucial elements of significance which may have a future impact on the performance of our companies.
“Fools have a great advantage over the wise, they are always self-satisfied”, Napoleon Bonaparte
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