Resilience reloaded

How to prepare for geopolitical disruption


Geopolitical conflicts continue at post cold-war highs. The year 2021 saw 355 conflicts alone – an increase of 64% over 2002. Although the number of conflicts has slowly been declining since 2014, recent developments in international relationships amongst the major powers as well as drivers such as access to natural resources, protection of technology, competition for economic welfare or struggle for security fuel continuous global tension.

For companies, these conflicts can be disruptive and can impact their ability to conduct business. Major risks can include shareholder and capital disintegration, intellectual property violation, substantial rearrangements of international supply chains, trade restrictions or the ceasing of local business operations.

This makes it all the more important to understand resilience as key to long-term mitigation of geopolitical risks for a company’s operating model. Becoming resilient is a highly strategic endeavor where success depends on good preparation as well as clear execution. In this report, our authors outline a four-step approach for geopolitical resilience with strategic preparation at the center.

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Operational resilience

Resilience is the ability to prepare for and adapt to changing conditions and withstand and recover rapidly from disruptions.

Geopolitical resilience approach

Geopolitical resilience approach

Depending on the severity of the geopolitical disruption and the ease of adaption, different measures need to be defined. The following exhibit shows selective measures to deal with geopolitical risks that range from store, adapt, diversify and partner to restructuring.

Geopolitical resilience approach

Our recommendations on strategic preparation

To avoid major damages and reduce firefighting, here are our recommendations for strategic answers companies can to geopolitical risks now.

  • CostsAct before the fact

    Costs of geopolitical problems can be major – do not trade them off for daily challenges.

  • DistributionTreat geopolitics strategically

    True resilience can only be achieved through a sound strategic process.

  • CapitalKeep your initial scope broad

    Geopolitical rifts impact companies at multiple levels, requiring a comprehensive assessment of exposure.

  • ESGPrioritize in time

    Given the complexity of today’s supply chain and number of risks, focus on the major risks.

Contact us

Axel Borowski

Axel Borowski

Partner, Strategy& Germany

Dr. Raimund Wolf

Dr. Raimund Wolf

Director, Strategy& Germany