Inside the Strategy Room
248. Taking a proactive approach to geopolitics
Apr 24, 2025
Shubham Singhal, a Senior partner and co-leader of McKinsey's Geopolitics Practice, Cindy Levy, the global co-leader of the same practice, and Olivia White, a director at the McKinsey Global Institute, discuss the proactive strategies businesses can adopt in a shifting geopolitical landscape. They emphasize the importance of scenario-based planning and understanding trade dynamics, particularly with rising powers like Vietnam. The experts highlight risk-adjusted value creation and the necessity for resilience against sudden changes brought on by advancements like AI, urging companies to adapt and strengthen their governance.
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Quick takeaways
- A proactive approach to scenario planning is crucial for business leaders to effectively navigate geopolitical risks and uncertainties.
- Understanding geopolitical distance empowers companies to make informed decisions regarding their operations and trade relationships, enhancing resilience and growth.
Deep dives
Proactive Scenario Preparation
Business leaders are increasingly realizing the need for a proactive approach to scenario planning that goes beyond mere tail events in geopolitics. This involves understanding the nuances of tariffs, export controls, and investment regulations that can significantly impact various aspects of their operations. Companies must consider how these geopolitical shifts could affect their revenue streams, supply chains, manufacturing locations, and workforce dynamics. By engaging in deeper analyses of potential scenarios, leaders can effectively mitigate risks and capitalize on opportunities that arise in an uncertain global landscape.
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