Many corporations are unprepared for one of our largest generational challenges – the outsized impact of geopolitics. Leaders must act swiftly to prepare their organizations for this new reality by developing their own geopolitical muscle.

Geopolitical dynamics at play

For the better part of three decades, CEOs navigated a rare historical anomaly: an era of accelerating globalization. From the 1990s to the late 2010s, economies, cultures, and populations were steadily integrating, harmonized under an international order where globalization thrived, just-in-time supply chains reigned supreme, and geopolitics barely registered on corporate agendas. This era is definitely over.

Multipolarity

The post-Cold War era of international cooperation, shaped by Western-led institutions and trade regimes, is giving way to a more contentious and fragmented global landscape. While some predict a return to a bipolar world akin to the Cold War, this perspective is overly simplistic. Instead, the momentum is toward multipolarity. On one side, we have the Western bloc, which is made up of the US, Europe, and their allies in the Indo-Pacific, on the other side, the last two years has seen the emergence of a “new” Eastern bloc, led by China and Russia. Then there are dynamic middle powers increasingly asserting influence through diverse blocs, regimes, and regional alliances. This shift challenges organizations to adapt to a decentralized and multifaceted geopolitical environment.