Earlier this month, Leathwaite‘s Sara Swisher-Anderson and Gatehouse Advisory Partners hosted a conversation with banking risk and compliance leaders to explore how geopolitics threatens financial sector firms and how the nature of the risk is evolving and compounding.
With intertwined and complex geopolitical developments multiplying, ExCo’s need to understand not only the shape of inbound threats and pressures, but also to define their distinct vulnerability to them if they are to effectively manage the risk. With geopolitics and business now interconnected in a way that can and will have a profound impact, business leaders must consider themselves as geopolitical stakeholders, as evidenced by the frequent call for business leaders, especially within the world of finance, testifying before Congress on the impact of geopolitical issues.
How the ExCo is informed and leads on geopolitics is meaningful. With multilateral and national institutions struggling to manage the governance implications of international competition, even a slight shift can create outsize disturbance (particularly for tightly-regulated businesses). Technological advancements have led to a proliferation of information so that it is now hard to identify critical intelligence in the mass of available data. For leaders to be effective they must first determine their sensitivity to exogenous risks and pressures and then selectively focus their time and attention on the most relevant information. The hierarchical nature of historical organizational structures may not be agile enough to respond.
Leaders must become more comfortable introducing and managing nodal structures, where teams are looking forward and testing assumptions and scenarios. They must consider where pressures might emerge and be able to quickly filter information to the top of the house. While linear processes remain important, identifying points of constriction that could imperil the business is essential. Tomorrow’s leaders will possess exceptional listening skills and the humility to ask the question “what am I missing”.
In a world that is constantly changing and becoming more complex, successful future leaders will be those that can connect the dots with a contextual strategic lens and consider what risks to prioritize – and ask themselves what they wish they had known earlier?
London-based Gatehouse is a leading provider of precisely this geostrategic advice and capacity-building, to help CEOs and their senior teams sort the signal from the noise, and enhance business value in even the most challenging geopolitical contexts.
