As the MIT Sloan Management Review recently conceded, nearly half of your company’s profits (43%) now depend on factors outside the control of the company, such as geopolitical developments in Washington, Beijing, or Brussels.

Yet chaos, properly understood, reveals opportunity with the same reliability that stability breeds complacency. The firms set to dominate the next decade will be those that recognise a fundamental truth – volatility is not something to survive, but to exploit. Through rigorous scenario planning and the cultivation of what Nassim Taleb terms antifragility, smart businesses can transform geopolitical turbulence from existential threat to competitive advantage.

Scenario Planning: Preparing for Multiple Futures

Geopolitical scenario planning – a methodological cousin to climate risk modelling – offers a solution by forcing leaders to envision multiple, often divergent futures. The aim is not to predict the future, but to upend the assumptions of decision makers and broaden their strategic imagination.

Royal Dutch Shell pioneered this approach by famously anticipating the 1973 oil crisis – not by predicting the embargo’s timing, but by mentally preparing its executives for the consequences. When the shock arrived, Shell responded decisively while competitors stood paralysed. The company leapfrogged from eighth to second in global market share over the following decade.

Effective scenario planning begins with an outside-in analysis that maps key external forces – such as US-China relations, regulatory volatility, potential military flashpoints – against your specific vulnerabilities. The key is to create fundamentally different future scenarios, not merely “good” or “bad” outcomes, but distinct worlds that would each demand unique business responses.

Consider how one global semiconductor manufacturer approached growing US-China technology rivalry. Rather than assuming continued access to the Chinese market, they developed three distinct scenarios: “Managed Competition” (selective decoupling in sensitive sectors), “Cold War 2.0” (comprehensive technological separation), and “Fragmented Multipolarity” (regional technology ecosystems). For each scenario, they identified specific early warning indicators that would signal which future was emerging.

The power of this approach lies in its capacity to broaden the strategic imagination of decision-makers. By immersing executives in vividly detailed alternative futures through tabletop exercises that simulate crisis conditions, such as a state-sanctioned cyberattack, companies can overcome the cognitive biases that typically hamstring strategic thinking. The goal is to build what military strategists call “recognition-primed decision making” – the ability to pattern-match emerging situations to previously considered scenarios.

Most critically, this process forces business leaders to ‘pre-define’ trigger points – specific thresholds that automatically activate contingency plans once crossed (e.g. if tariffs exceed X%, then diversify sourcing)​. This prevents the all-too-human tendency toward paralysis when confronting major disruptive events.

In an age of increasing geopolitical uncertainty, winners will be those who think three moves ahead while others are still staring at the board. Let’s explore this further through the concept of antifragility.

Antifragility: Growth from Chaos

While resilience helps companies survive shocks, antifragility ensures they thrive from volatility. Nassim Nicholas Taleb defines antifragility as systems that gain strength through exposure to stressors, uncertainty or risk. The antifragile business doesn’t just bounce back; it bounces forward, emerging stronger.

Consider Flex (formerly Flextronics), the contract manufacturing giant. When US-China tensions escalated in 2018, Flex didn’t only diversify manufacturing away from China like many competitors. Instead, they completely reconfigured their operational model, establishing what they called “manufacturing islands” – self-contained production ecosystems in multiple jurisdictions capable of serving regional markets independently.

This approach required more initial capital expenditure than an efficiency-focused alternative. But when COVID-19 and the US-China trade war disrupted global supply chains, Flex’s structure proved remarkably effective. As competitors struggled with border closures and regulatory snares, Flex captured market share by offering uninterrupted regional production. Their “inefficiency” revealed itself as strategic redundancy – antifragility in action.

Key Antifragility Strategies

1. Supply Chain Diversification
Single-source dependencies can create catastrophic vulnerabilities. Apple’s ongoing shift of production from China to Vietnam and India illustrates strategic redundancy – an upfront cost outweighed by “insurance” for geopolitical disruption. By 2025, Apple will have moved over 25% of its iPhone production from China to India, with major operations also in Vietnam. When COVID lockdowns shuttered factories in Shanghai, these diversified production capabilities proved invaluable, protecting revenue and market share.

2. Nearshoring
Businesses should also weigh the strategic advantage of near-shoring or friend-shoring, accepting potentially higher labour costs in developed economies (particularly the US) as a form of insurance against geopolitical disruptions. As global tensions intensify, companies will face pressure to choose geopolitical alignments explicitly, making it crucial to clearly understand their home country’s position and how business and political interests align.

3. Geopolitical Intelligence Integration
Leading companies embed geopolitical risk analysis directly into decision-making processes. JPMorgan Chase incorporates geopolitical scenarios into its risk management framework, allowing rapid repositioning before major shocks. When Russia invaded Ukraine in 2022, JPMorgan had already stress-tested its exposure to Russian assets and energy price shocks, enabling it to take decisive action while competitors deliberated. Overseas diplomatic posts also provide valuable geopolitical insights often at no direct cost, yet most businesses underutilise the resource.

4. Energy Independence
Geopolitical volatility increasingly manifests through energy markets. Walmart has made significant investments in renewable energy, aiming to power its operations with 100% renewable energy by 2035. This includes funding for community solar projects across the US, which helps buffer against energy price volatility. During the 2022 European energy crisis, companies with renewable infrastructure maintained stable production costs while rivals faced crippling margin compression.

5. Human Capital Diversification
Antifragile organisations proactively cultivate internal capabilities across a range of disciplines, ensuring they possess not just technical and business skills but geopolitical and strategic expertise. The right blend of skills allows firms to anticipate, interpret, and swiftly adapt to complex geopolitical developments.

Case Study: TSMC’s Strategic Redundancy

Taiwan Semiconductor Manufacturing Company (TSMC) presents a fascinating case study in antifragility amid geopolitical tension. With its home base in Taiwan – increasingly a focal point of US-China tensions – TSMC faces existential risk.

Rather than hoping for the best, TSMC has launched an aggressive global diversification strategy. The company is investing an additional $100 billion in the US, $8.6 billion in a Japanese facility, and exploring European manufacturing. Critically, TSMC maintains its technological edge by keeping its most advanced research and development in Taiwan.

This appears contradictory – why not fully relocate sensitive operations? The answer reveals antifragile thinking: by maintaining critical capabilities in Taiwan while developing global redundancy, TSMC has transformed geopolitical risk into an implicit US security guarantee.

The company’s strategic importance is now so great for the maintenance of American AI leadership that even the isolationist Trump Administration has a vested interest in its continued operation. As smaller competitors retreat from additional capex due to regional tensions, TSMC has doubled down – growing to 90% market share of advanced chip manufacturing.

Tips for Building an Antifragile Business Strategy

To build antifragility into your organisation:

1. Move from efficiency to optionality: Create deliberate redundancies in critical systems, especially where you are reliant on a single supplier or customer.
2. Embrace small, frequent stressors: Test systems with simulated disruptions to expose weaknesses before real crises hit
3. Maintain strategic flexibility: Hold additional liquidity and diversified resources that enable offensive moves when competitors are in defensive postures.
4. Cultivate institutional memory: Adopt regular scenario testing, and document responses to disruptions systematically to build organisational pattern recognition.
5. Attract and retain multidisciplinary talent: Extend talent investment into a non-traditional range of skills (e.g. geopolitics, resilience science) to better deal with uncertainty and rapid change.
6. Reframe risks as opportunities: Ask not only “How can we minimise harm?” but “How might we benefit from this scenario?” For example by becoming a trusted supplier to government at a time of heightened geopolitical tension.

While competitors focus on weathering storms, the antifragile organisation sees each disruption as an opportunity to capture market share, build new relationships, and develop strategic positions that persist long after stability returns.

According to a May 2024 survey, 96% of corporations had invested in new political risk management capabilities​ over the previous year – even before the commencement of Trump 2.0. The question for your boardroom is no longer if another geopolitical storm is coming, but whether your business is structured to profit from it.

I’d love to hear your thoughts – email luke@bwdstrategic.com or message me on LinkedIn if you’d like to continue the conversation.