Thriving in a Volatile Global Landscape

Fifteen years ago, Henry Kissinger published a book with the provocative title Does America Need a Foreign Policy? Kissinger was concerned that with the Cold War over, policy makers had become reluctant to articulate a clear vision of U.S. self-interest. We’re putting forth a provocative idea of our own in this month’s Big Idea, “Why Your Company Needs a Foreign Policy.” In the article, John Chipman, chief executive of the London-based International Institute for Strategic Studies, argues that companies, too, need a strategy for protecting their interests in an increasingly unstable world. For Chipman, things changed two years ago, when Russia invaded and then annexed Ukraine’s Crimean peninsula. It was the first major strategic crisis in Europe in a generation, and as I write, Europe faces another crisis: Britain has voted to leave the European Union. A shifting world order requires multinationals to adopt a new approach to global risk management. The shift derives from several megatrends, including America’s growing unwillingness to intervene in faraway hot spots, an increase in officially imposed economic sanctions, and political uncertainty in the developing world. To cope with all this, Chipman says, companies need to effectively “privatize” foreign policy—internalizing many of the elements traditionally employed in statecraft. They need to collect external intelligence, identify allies, and even develop their own relationships with foreign governments. For most companies, this is a dramatic change. But Chipman suggests that in today’s tumultuous geopolitical climate, expertise in international affairs and effectiveness at corporate diplomacy will become a critical new source of competitive advantage.

Thriving in a Volatile Global Landscape

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