Geopolitical conditions have always influenced companies’ fortunes, but since the end of the Cold War, they’ve taken a back seat to macroeconomic, strategic, and operational concerns. No longer.
Business leaders today view geopolitical tensions as the biggest risk to economic growth, according to the latest McKinsey Global Survey on economic conditions. The resilience and strategies of multinational corporations have been tested by intensifying regional conflicts and international trade divergences in recent years. CEOs and boards understand that a shift in the global order is under way. But many have yet to
grapple with an important implication: geopolitical shifts present not only risks to mitigate but also opportunities to seize. Indeed, institutions that position themselves to flourish in today’s geopolitical climate will enhance the lives and livelihoods of their employees and populations.
We believe the often-nebulous concept of geopolitics can be abstracted to a set of concrete drivers that influence everyday business decisions. McKinsey’s Geopolitics Practice looks at these drivers from a value-creation perspective, helping leaders minimize the downside effects of geopolitical shifts and mobilize opportunities for institutional and societal benefit.
We help institutions translate the implications of geopolitical scenarios to business decision making and value creation. Amidst ongoing geopolitical shifts, there remains a path to invest in bold bets that maximize risk-adjusted returns or improve public sector mission objectives. Our innovative approach aligns to three pillars:
Align board and management on geopolitical scenarios and develop strategies to enhance organizational geopolitical capabilities
Realign geo-business portfolios and assets to accelerate growth and maximize value, and build presence in resilient and growing trade corridors
Implement effective geopolitical crisis management practices and proactively provide guidance on resilience planning and global trade compliance
We improve risk-adjusted returns through revenue, earnings growth, and business-mix optimization across geographies and product lines
We ensure cost competitiveness / differentiation and resilience across capital-intense operations, global people operations, and technological footprints as geopolitical scenarios unfold
We shape corporate strategy, support resilience planning and preparedness, and drive capability building to enhance readiness
