Sailing into the storm: how geopolitics crashed the boardroom
In this article – originally published in the Mag EDHEC Vox #17 and on ladn.eu (in French) – Luc de Rancourt, co-director of the Chair in Geopolitics and Corporate Strategy, discusses the need for companies to relearn how to make decisions in uncertain times.
The world is on tenterhooks over Donald Trump’s trade policies, Sino-American rivalry, the war in Ukraine and the Palestinian crisis, and over half of firms are looking at relocating supply chains as geopolitical turbulence intensifies, according to the Allianz Global Trade Survey 2024.
For General de Rancourt, this settles a long-standing question. The business world can no longer sidestep what it once held at bay. “Corporations aren’t neutral bystanders — they’re geopolitical actors in their own right.”
Order under pressure
“Globalisation pulled a curtain over reality,” de Rancourt says. “It lets us forget that geopolitics has always shaped relations between states.” He traces the return of geopolitics to the attacks of September 11, 2001, with the pace accelerating following the watershed year of 2008. That year, Lehman Brothers collapsed, the Doha trade talks foundered, Beijing’s Olympics announced China’s return to the international stage, and Russia flexed its muscles in Georgia. Post-Cold War stability proved illusory.
Now, COVID-19, Russia’s invasion of Ukraine and Israel’s war in Gaza have settled the matter: geopolitics is back with a vengeance. “We face a paradox: we live in a world that is more interconnected yet more fractured than ever,” the general observes. “Armed conflicts haven’t been this frequent since 1945, yet trade volumes keep climbing, tightening interdependencies every year.” These asymmetric dependencies are starting to stack up. Some are geographical, including our reliance on chokepoints like the Suez Canal or the Taiwan Strait. Others are industrial: Europe’s microprocessor output slumped from 44 per cent globally in the late 1990s to just 9 per cent by 2020. Others are networked and involve finance, commerce, standards, data, space, and telecommunications infrastructure.
“Back resilience, not just returns”
Navigating this high-wire act demands what the general calls a shift “from chasing pure profit to building resilience” against geopolitical shocks. This means sharper diagnostics, diversified value chains, and closer scrutiny of capital sources, areas where firms “haven’t yet come of age,” de Rancourt argues, pointing to Lafarge, whose terrorism financing trial started last November. The cement giant allegedly paid the Islamic State between €4.8 and €10 million to keep its Syrian operations running during the war. “With stronger geopolitical awareness and a firmer grasp of what was at stake, company leaders would surely have handled those ethical dilemmas differently,” the general says.
Enter the new Chair, which is designed to arm students with the theoretical frameworks and analytical methods they need to read the world while also teaching them decision-making amid complexity through case studies like Lafarge. Its board brings heavyweight expertise including the Director of the Institut Montaigne Marie-Pierre de Bailliencourt, MEDEF spokesperson Paola Fabiani, Axa’s CEO Thomas Buberl, and leading academics including Frédérick Douzet, the French scholar of geopolitics who specialises in cyberspace and digital strategy.
When risk becomes uncertainty
Today’s cascading crises require us to rethink risk from scratch. “Companies used to think in countryrisk terms,” the general says. They would assess financial and political threats market by market. Power shifts now demand a broader vision.
Risk yields to measurement; uncertainty defies it. The old playbook involved identifying a factor, calculating its probability, pricing the risk, and deciding, which no longer cuts it. “We’ve yet to develop methods for grappling with uncertainty beyond risk factors — assuming that’s even possible,” the general admits. The Chair’s challenge is to generate practical tools for making decisions Under difficult conditions.
Intelligence, foresight and the long game
First, though, leaders need the right information. For de Rancourt, “executive teams must be soaked in geopolitical thinking” in order to move beyond knee-jerk reactions. Hence the case for investing in strategic intelligence and foresight — spotting trends and weak signals alongside real-time monitoring. “Trump slapping tariffs on a sector? That’s a geopolitical event,” the general illustrates. “China positioning itself as climate leader at COP30, or demographics pointing to a Chinese population of 700 million by 2100 — those are weak signals and long-range trends you need to track.”
One thing the military does supremely well is plan for the long haul. “I’m a believer in mixing ideas from different worlds,” de Rancourt says. “Corporate time horizons run far shorter than military ones. Businesses could learn from how we approach planning.”
Feet on the ground, eyes on the horizon
In addition to needing new tools, what does leadership look like when the ground beneath it keeps shifting? Again, military thinking offers clues, the general says. He invokes twentieth-century strategists. “Business leaders must master what Churchill divided into ’doing things right’ and ’doing the right things’ — operations versus vision.”
Another cardinal rule: Watch your feet and scan the horizon; everything in between falls to your team. “Watching your feet means responding when a crisis erupts,” he explains. “Scanning the horizon means setting the direction in which the firm is going.”
The Chair has some serious academic chops to help teach students this dual focus on swift response paired with strategic depth. It’s forging ties with the French Institute of Geopolitics (IFG) to guarantee a rigorous curriculum that helps future leaders rise above what the general calls “the ephemeral clutter of daily life.” Why? “The faster events move, the more time we must spend understanding them.”
- This article was originally published in EDHEC Vox magazine #17 entitled ‘Who decides? Rethinking the architecture of power’ available online, in French and English.
