GEOSTRATEGY BY DESIGN

McCaffrey, Henisz, and Jones offer a strategy for businesses grappling with an uncertain geopolitical future.

In their collaborative nonfiction debut, the authors (a business consultant, a professor of management, and an analyst) propose approaches to geopolitical risk in the modern era that are intended to remain “evergreen” by “embedding geopolitical analysis into a company’s DNA.” This “geostrategy” (“the holistic and cross-functional integration of political risk management into broader risk management, strategy, and governance,” per the book’s introduction) takes the form of four activities that are all woven together by a fifth: First, companies must first scan the political landscape of the moment, seeking to identify short- and long-term political risks (and opportunities) that result from all kinds of instability. They must then focus, assessing the potential dangers those risks pose. Next, they must manage and strategize, incorporating the variables represented by those risks into actual company policies. Finally, they must reckon with the results, establishing “a cross-functional geostrategic team” to implement their new strategies. In short chapters supplemented by illustrations and buttressed by research, McCaffrey, Henisz, and Jones clarify the key role corporate chief strategy officers and other executives should play in devising plans for such things as “disposing of noncore assets,” “raising and optimizing capital to fund growth,” and “analyzing capital allocation.” The authors convey all of this in direct and forceful prose that is unfortunately often bogged down in turgid business-speak (“the analysis helped to inform a strategy designed to minimize downside risks and capture opportunities associated with these political changes”). Their subject could hardly be timelier; as they point out, in the wake of the Covid-19 pandemic’s disruption of global supply chains, the international business world has never been keener to work geopolitics into their strategies. The CSOs of such businesses will find a great deal of insightful and highly detailed thinking on that subject here.

An effective action plan for companies dealing with geopolitical instability.