BCG-WEF-IMD Project: Building Corporate Geopolitical Muscle

Building Geopolitical Muscle: How Companies Turn Insights into Strategic Advantage

Geopolitical disruptions, arising from economic, technological, and political rivalries, are reshaping markets and supply chains worldwide and remaking the landscape of risk and opportunity. Business leaders increasingly recognize that success depends on building capabilities to sense, interpret, and respond systematically to geopolitical dynamics.

Research from the World Economic Forum, IMD Business School, and BCG, based on more than 55 interviews with senior executives at the frontline of geopolitics across industries and regions, reveals three themes:

• Leadership attention is high, but structure lags. Geopolitics has long been the purview of the board and CEO, but leadership alone no longer has the bandwidth to manage the speed and scale of today’s disruptions. Many companies are now building their geopolitical capabilities, with momentum accelerating since COVID-19 and Russia’s invasion of Ukraine. Yet only a minority have fully institutionalized those capabilities into their decision making.
• There is no single blueprint for institutionalization. More than half of the companies in the study locate their geopolitical capability within government or corporate affairs, while fewer than 20% have a dedicated geopolitics or international relations/affairs unit. Firms pursue different operating models, such as task forces, senior advisers, and full-time dedicated teams. Each can be successful. The most effective firms combine agility and agency. They align ambition and design, factoring in intrinsic characteristics, such as exposure, structure, and culture.
• Translation into business implications is a prerequisite. The ability to connect geopolitical developments to corporate value creation and express them in standard commercial, financial, or operational terms is a prerequisite for relevance. Without a bridge to business value, even strong geopolitical awareness remains disconnected from action.

This research initiative also offers a tool kit for executives seeking to build or strengthen their geopolitical muscle through five practical building blocks:

1. Mandate. Anchor responsibility at the CEO and board level with delegated authority and a clear mission going beyond crisis management, clearly communicated to the rest of the organization.
2. Radar and Sonar. Combine internal and external intelligence into relevant business insights. Quantify exposure, link it to financial forecasts, and deliver concise reporting.
3. Operating Model. Design a function by employing archetypes—watch tower, influence network, command cell(s), or nerve center—that fit the company’s structure and culture. Proximity to the CEO and cross-functional coordination are critical regardless of where the muscle is hosted within the organization (such as government or corporate affairs, corporate strategy, risk).
4. Talent. Appoint leaders with deep business experience, supported by teams blending diplomacy, strategy, intelligence, regulatory, and legal backgrounds with analytical and project management skills.
5. Decision Integration. Embed geopolitical inputs into strategic planning, capital allocation, supply chains and logistics, communications, and policy engagement in a coherent and consistent manner across markets.

At its best, geopolitical muscle does more than mitigate risk; it enhances reputation and brand value, opens the door to strategic opportunities, deepens global policy engagement, and strengthens an organization’s commercial positioning by informing business strategy.