It is not the risks themselves that are underestimated, but their dynamics

trend: The conflict in the Middle East shows once again the global impact that geopolitical tensions can have. Why are such risks more relevant for companies today than they were a few years ago? 

Winter: Geopolitics has moved from a marginal issue to the center of corporate decisions. We are not experiencing a short-term crisis cycle, but a structural change. Instability is becoming the new normal. For companies, this means that geopolitical risks are no longer external disruptive factors, but central drivers of strategy, costs and competitiveness. Those who understand this can better manage risks and even derive competitive advantages from them. Today, geopolitics is no longer an individual risk, but a systemic risk. In a globally interconnected world, shocks are transmitted very quickly via supply chains, energy flows, financial markets and digital infrastructures. 
  

trend: The Strait of Hormuz has recently been in the spotlight. What impact can such events have on European companies? 

Winter: The Strait of Hormuz is a good example of how a regional conflict can have global consequences. A blockade leads directly to bottlenecks in energy and raw materials. Europe is not directly affected but imports the consequences via rising prices and higher volatility. A regional conflict quickly turns into a global cost shock. Companies are feeling this through higher energy prices, rising transport costs and burdens along the entire value chain.  
 

trend: Many companies have already diversified their supply chains. Is that enough? 

Winter: Diversification is important, but it alone does not make companies resilient. In the past, the strategy was “more suppliers, more safety”. Today, we see that additional suppliers often mean more complexity. More complexity leads to less transparency and can create new dependencies. Resilience is not only created by diversification, but by the ability to actively manage supply chains and make risks transparent along the entire chain. Transparency is now more important than diversification.  
 

trend: What risks are currently still underestimated? 

Winter: It is not the risks themselves that are underestimated, but their dynamics. Today, companies are certainly dealing with geopolitical risks, cyberattacks or supply bottlenecks. What is often underestimated are the chain reactions that can result. Sanctions can interrupt supply chains, resulting in production losses, financial burdens or cyberattacks. These developments are often not linear, but exponential. And it is precisely such exponential developments that we as humans have a hard time with.  

trend: As geopolitical risks become increasingly difficult to plan, how should companies deal with scenarios, contingency planning and business continuity management? 

Winter: In the past, emergency and crisis plans were often parked in individual departments. Today, business continuity management and scenario planning are strategic management tools. It is no longer a matter of making a forecast, but of building a decision-making framework for different developments. The question is no longer whether an event occurs, but when. Companies must therefore be prepared before a crisis occurs. If you only react when the problem is already there, you lose valuable time and often your ability to act.  
 

trend: Has this awareness already reached the management levels? 

Winter: Yes, much more so than a few years ago. Many management teams have been in permanent crisis mode for years. As a result, they have become more resilient and deal with uncertainty more professionally. In my view, the greater challenge is to carry this awareness into the entire organisation. We must accept that we live in a new reality. The idea that nothing will change is understandable, but not realistic. Companies must learn to actively shape change instead of just reacting to it.  
 
trend: Many companies rely on insurance cover in crises. What can insurance do in the event of geopolitical risks and where does it reach its limits? 

Winter: Insurance remains important, but it cannot fully cover systemic risks. Insurance works particularly well in the case of clearly definable individual events such as fires or accidents. It becomes more difficult with geopolitical risks, cyber risks or large-scale supply chain disruptions. These risks are often difficult to model and can affect many companies at the same time. This is exactly where coverage gaps arise. Therefore, companies need additional tools and strategies to deal with such risks. 


trend: What additional requirements does this create for CFOs and CEOs? 

Winter: The requirements are changing fundamentally. Executives are increasingly becoming risk managers. It’s about making decisions under uncertainty. Topics such as liquidity, contract drafting, financing or liability issues are becoming increasingly important. Those who actively manage risks remain capable of acting. This is precisely one of the most important management skills today. 
 

trend: You talk about resilience as a leadership task. What does that mean in concrete terms? 

Winter: Resilience is not a departmental function, but a management task. It must be anchored at the highest level. At the same time, resilience means thinking long-term. This is sometimes at odds with short-term efficiency. Companies must accept that maximum efficiency does not always mean maximum security. For example, those who build supply chains closer to sales markets or deliberately create redundancies may act less efficiently but gain stability and resilience. 
 

trend: Can resilient companies gain a competitive advantage from this? 

Winter: Absolutely. Resilient companies understand that stability is now the exception, not the rule. They plan in scenarios, make decisions faster and remain able to deliver even in crises. This allows them to take advantage of opportunities while others are still reacting. Non-resilient companies, on the other hand, often lose market share and margins because they act too late. The decisive factor is not whether a risk occurs. The decisive factor is how you deal with it. Entrepreneurship always means taking risks. Successful companies are those that deal with these risks better than their competitors. 
 

Georg Winter

CEO GrECo Group

T +43 664 962 39 06