Geopolitics is personal. Where individuals grow up, the global events they experience, the news they read all shape how they relate to their organizations’ geopolitical stances. For example, there was nothing “cold” about the Cold War for those who lived through hot, shattering wars in Korea in the 1950s or Afghanistan in the 1980s. The ’90s, an era of hyperglobalization that some nostalgically juxtapose with today’s fragmenting global order, was also marked by conflict, ethnic cleansing, and genocide in the Balkans and Rwanda. And today, whether the realignment of geopolitical power is a threat to the global order or a natural correction depends on where you sit.
Geopolitics is not only personal—it’s emotional. While employees increasingly expect their leaders to take positions on geopolitical conflicts, what they want those positions to be varies widely. Consequently, business leaders must not only manage a fraught external geopolitical context but also a charged internal environment. One in which the words they use to describe geopolitical issues are closely scrutinized and, at times, matter more than actions. One in which employees watch closely to see whether their company holds itself to different standards in different regions. A context in which diverging geopolitical viewpoints can lead to disagreements about risk and strategy and, if not carefully handled, can result in a loss of trust, talent, intellectual property (IP), and the social and legal license to operate in certain markets.
To seize opportunities in an evolving global order, leaders will need to build geopolitical resilience by investing in three domains: insight, oversight, and foresight. There is, however, a fourth dimension that, without fail, arises in our discussions on geopolitical resilience with CEOs and board directors: people. The questions that come up include the following:
- How should I talk to my employees about sensitive geopolitical topics?
- How do I balance transparency with confidentiality around the work our company will not do in a market—a stance that, if it became known publicly, may jeopardize our organization’s operations, people, and reputation in that market?
- How should I upgrade our processes, from employment background checks to internal controls on unauthorized access to data, amid growing stakeholder and regulatory expectations and requirements?
- How can I strengthen unity within our organization and signal that we are committed to being global and inclusive in a changing world?
To address these questions, leaders need a geopolitics strategy for engaging with their people, just as they need one to guide their operations. While many companies are developing defensive measures to mitigate the impact of geopolitical disruptions, as important are the proactive steps they take to foster a resilient organization. This strategy’s ultimate goal is to hold together the fabric of a global institution amid swirling centrifugal forces that threaten to rip it apart.
Proactively engage to build bridges
Proactive measures that signal a commitment to being a values-driven and inclusive organization for colleagues of varied backgrounds and views are at least as important, we believe, as risk controls. Five elements broadly define this agenda: multipolarity, mobility, messaging, motivation, and mission.
Multipolarity
An increasingly multipolar world requires companies to account for a multiplicity of views. Indeed, some organizations have explicitly adopted this approach. This multipolar philosophy should not only guide companies’ business models but also their approach to their people. Employees increasingly want their leaders to walk in their footsteps—to understand their unique contexts rather than remotely project a normative view from headquarters. They’re looking to their leaders for nuanced views of risk in their home markets and full appreciation of the long-term potential of transformations under way there, such as the rapidly growing middle class in Asia.
How can companies demonstrate a multipolar mindset on people? Here are a few practices CEOs should consider:
- Hold board meetings in markets around the world to manifest the organization’s commitment to engaging with colleagues in those locations and to better understand the realities and opportunities on the ground.
- Ensure that important positions and governing bodies, such as the risk committee, are staffed by leaders who reflect the global nature of the organization itself.
- Assemble a set of external advisers and speakers at company events who come from different regions to signal a commitment to hearing a range of views.
- When conducting market reviews and risk assessments, incorporate not only inputs of foreign analysts and institutions but also those of local experts and organizations to build a comprehensive picture.
- Commit to a consultative process in developing risk frameworks for markets with geopolitical sensitivities by involving local senior leaders. In a typical country risk framework wherein red denotes activities barred by sanctions or other legal restrictions, green covers areas where the company has minimal barriers to operate and should rapidly advance, and yellow signals potential risk, the yellow category can seem subjective. Some colleagues may object to leaders viewing geopolitical issues through their own regional lenses, underscoring the need for an exchange of perspectives.
Mobility
A second element of being proactive is mobility. This includes programs that enable employees to build mutual understanding and trust with colleagues in markets distant from the organization’s home region. One of the world’s largest retailers, for example, brings its entire incoming analyst class in China to its US headquarters each year to facilitate such bridge building.
Companies could also consider implementing rotational programs that offer incentives for leaders on track for senior positions to move across key markets to develop a global understanding of the company. Two leading financial institutions based in Asia, for example, have taken this approach by placing leaders from Southeast Asia at the helm of key markets in South Asia. To be sure, such programs entail a range of considerations, from budgets and security to family and livability, but it’s critical to broaden the perspectives of those who will lead the organization.
Messaging (and messengers)
A challenging aspect of being proactive is how to deliver the right message about geopolitical developments at the right time. Considerations that leaders may need to weigh include the following:
- principles to guide the organization on determining which developments it needs to take a stand on and which ones it should not comment on
- the specific stance on a conflict or a geopolitical development and the rationale for it
- how the values that the organization stands for bear on its actions during a geopolitical event or moment
- who in the organization’s leadership should speak on a geopolitically sensitive topic
- the imperative to not conflate people with nationalities and attribute the actions of a government or organization based in a particular state to the people of that state
- differentiating actions taken to protect the enterprise and its social or regulatory license to operate from those that imply a normative stance
- when to be on the ground in markets experiencing disruptions, both to meet with and learn from local colleagues and communicate support in person
One example of messaging in response to a geopolitical event is McDonald’s CEO’s memo to the company’s owner/operators, employees, and suppliers worldwide following Russia’s invasion of Ukraine. In the note, Chris Kempczinski outlined the rationale for the company’s exit from Russia by grappling with the following five questions:
- Are we legally allowed to operate in the country?
- Do we have the freedom to operate the business and meet the needs of our customers and employees unimpeded?
- Is our presence in the market brand-enhancing to our global operations?
- Does it make good business sense?
- Does it align with our values?
As important as the message is the messenger. Many companies rely not just on the CEO and core business leaders but also on other colleagues who can play the role of shuttle diplomats. These could be former business unit heads or seasoned company executives who have established relationships within the organization but are not speaking for the management. They can help engender a better understanding of the position the management takes while serving as sounding boards and channeling frontline perspectives to global or regional leaders. Top leaders ought to note who these colleagues are, support their efforts, and find ways to feature their voices in global town halls or regional meetings.
Motivation
Another element of the people agenda relates to the fundamentals of human psychology. Not all colleagues align themselves with national affiliations or policies, but everyone shares certain core motivations. These include job security, compensation and benefits, and opportunities to build a successful career. These motivations are closely followed by the need to belong, which employees want to see reflected in the organization’s values and mission.
To keep people committed to the organization amid geopolitical tensions, business leaders should not lose sight of those motivations. The road to geopolitical resilience from a people standpoint starts with a value (not just values) proposition. At the same time, management should consider proactive measures that enhance employees’ sense of belonging. For example, during a conflict that evokes an emotional response in the organization or a particular market, is the company showing a values-driven approach by offering avenues for charitable contributions with matching funds (taking appropriate care around the mix of organizations and potential risk concerns)?
Similarly, when geopolitical considerations preclude continuing operations in a market, leaders should show commitment to their people by offering adequate support to those in the affected region. In the wake of Russia’s invasion of Ukraine, one global services firm offered to relocate colleagues not just in Ukraine but also in Russia when it closed its operations in Russia. In explaining the decision, the CEO distinguished between condemning the Russian government’s actions and supporting colleagues from Russia, thus affirming their continued sense of belonging. Extending such care is not without its pitfalls, however, from the logistical challenges and costs of relocating people to questions of equity around the scope and manner in which the organization responds to disruptions in different markets and how expansively it defines its duty of care.
Mission
The final element is mission. Having a clear mission statement that emphasizes the organization’s global orientation can sometimes serve as a North Star and rallying point in moments of sharp internal division around geopolitical events. For example, the mission of one large US multinational corporation refers to making its services “universally” available. During debates around whether the company should serve certain markets, its leaders anchor on this fundamental mission and reinforce the company’s purpose, which transcends geopolitical differences.
Safeguard the organization’s workforce and reputation
Geopolitical tensions have led many multinationals to upgrade measures intended to make their people and operations secure. For most, that has meant building an environment of “trust but verify”: fostering collaboration to allow for the flow of ideas and talent in an atmosphere of trust, while verifying that this trust is well placed through vigilance in whom they hire, how their people conduct themselves, and the scope of access individuals have to sensitive data and IP.
Stakeholders increasingly expect companies operating in markets geopolitically distant from their own to materially upgrade their people-related controls. Indeed, regulators and governments are turning some of these expectations into requirements—for example, for procurement and cybersecurity. Such obligations can at times generate employee angst about the policies’ underlying objectives or inconsistent application. In such instances, however, no amount of proactive engagement matters. Organizations must comply.
Three elements can help leaders preserve healthy organizations: protocols, policies, and posture.
Protocols
Organizations need to balance cherished principles on attracting the best global talent and maintaining an open global culture with pragmatically addressing the need for risk mitigation procedures that cover an employee’s full tenure. These protocols start with screening processes and background checks on potential new hires that address risk considerations without discriminating based on political opinion. Once a colleague joins the organization, the company should assign them a certain level of access to proprietary data and ensure that a robust insider risk program is in place to track any deviation from access levels. At the end of the employee’s tenure, companies should ensure that no sensitive information is exfiltrated.
Policies
The second element is having in place a set of policies guiding employee conduct around sensitive political or geopolitical issues. Many organizations, for example, have policies covering social media posts and the distinction between personal opinion and comments that could reverberate back to the organization. Increasingly, companies are supplementing those with policies to maintain a respectful workplace, as a way to prevent strongly diverging views from escalating into sources of tension that undermine cohesion.
Other, more niche policies can also be critical. For example, companies should have guidelines on how maps in internal and external documents refer to disputed geographies. Several organizations have faced accusations that their maps do not “respect sovereignty,” situations that can result in suspension of operations, significant consumer backlash, or legal action. To preempt such scenarios, some have sought to communicate an apolitical stance by, for instance, using map conventions developed by the United Nations.
Posture
The final element of protecting the organization is posture: how the company defines, consults internally, and communicates its stance on highly sensitive topics. For example, if the management decides not to work with government entities in a market where it has a significant presence, business leaders will need to consider how much consultation they do with senior colleagues in that market, how widely to make the posture known so that other colleagues in the market comply with it, and how the rationale for the posture is framed and communicated internally (whether by email or a more secure channel, for instance). In short, business leaders need to think in concentric circles of trust when discussing issues with a geopolitical dimension.
“Can we have peace in the company when the world is in turmoil?” This question, posed by the CEO of a European-based global company, is one we have been asked before. In revising their vision of the world to one that is deeply connected yet increasingly contested, business leaders may need to also revise how they engage with their people on a topic that is personal and emotional. They should take proactive measures, while protecting the organization from risks, not merely to keep the peace (within the company and with key external stakeholders) but to emerge as resilient organizations able to seize new opportunities.
