Geostrategy Imperative: How it Elevates Risk Management

Speaker A: One of the biggest misconceptions that I've seen for geostrategy is that it's not going to happen and it's not going to have an impact. In the recent years we've seen that, you know, things that were once, maybe rumors or it may happen, it can come to fruition and it can happen fast.

Speaker B: If the last few years have taught us anything, it's that risks can materialize with little to no warning. Project leaders today are facing more surprises, more often from more places with more potential downsides. And as a consequence, new geostrategy is playing a more prominent role in risk management. How are project managers responding? Let's find out. In today's fast paced and complex business landscape, project professionals lead the way, delivering value while, uh, tackling critical challenges and embracing innovative ways of working on projectified. We bring you insights from the project management community to help you thrive in this evolving world of work through real world stories and strategies, inspiring you to advance your career and make a positive impact Act. This is Projectified. I'm Steve Hendershot. When will the wars end in Eastern Europe and the Middle east? And what will be their resolutions? How will US tariffs and trade wrangling affect prices and supply chains? South Korea became the latest to experience record wildfires. How might climate change affect other regions? Geostrategic concerns abound these days, not only in the headlines, but also in the risk meetings of project teams around the world. According to EY Parthenon, 94% of companies increased the time and resources they spent on geostrategy in the last two years. That's after corporate and investor attention on geopolitical issues surged sixfold in 2022. And that focus persists. Geostrategy plays a crucial and elevated role in the project playbook. So today we're going to look at how teams across industries are factoring in geostrategic risks. We'll start with Heather Buchanan, supply chain Project Manager at retail giant Canada Goose in Toronto. She has both the Project Management Professional PMP and the PMI Risk Management Professional certifications. Heather, thanks for talking with us. Let's start with the geostrategy overview. Why is it essential to your work and what does it look like in practice in your project management?

Speaker A: Geostrategy is looking at all of the regions and countries that you're operating your project in, that your stakeholders are in, looking at the various ways that it can impact your project. When we think of geopolitical volatility before, we were only potentially looking at the impact to the triple constraint. But I think it really is as a project manager looking at all aspects of the project. So it's the procurement, the stakeholders, the quality and the resources. It's not just physical resources that can be impacted. There's the human aspect members on your project team. I think that project team morale and focus can be impacted during volatility. It is difficult to lead during these times, but I believe that it's important to lead with compassion and empathy and increased communication, uh, really understanding how the volatility can impact the people on your project team and your stakeholders.

Speaker B: That's a really good point because part of dealing with risk and change is leading with the ethos of flexibility. What does that look like both in terms of strategically meeting the moment and also helping your teams operate in a way where they can handle change.

Speaker A: I think it's about trying to be as proactive as possible about potential shifts. As much as we can be proactive and plan. There are going to be times where you're going to have to adjust strategies, which as a project manager is complex. So in those situations it's about making sure that any adjustments, um, that we're making, we're still hitting our project deliverables. I also think that when we do make adjustments, it's not just a knee jerk reaction. We really need to take time and bring key project team members and stakeholders together to have a conversation about how we're going to adjust the strategy while still achieving the project deliverables.

Speaker B: What does that adaptation process look like? When are you creating those contingency plans in relation to when you hit a roadblock or circumstances change early on when

Speaker A: the risks are being flagged, that's when to have the conversations of if we need to, the probability of it happening and if we need to have the contingencies. But based on the nature of the projects that I lead, that they are worldwide, we're doing the contingencies very early on in the project and always having those conversations and revisiting. And is the risk going to actualize? What's the probability, what's the impact? So it's really ongoing and we're being agile as things change. As a project manager, you have plan A, B and C, but sometimes you have to realize that plan A, B and C may not work. So then it's about bringing your project team members together. Any organizational experts, if they're not already directly involved in the project, I facilitate and lead the conversation of how we're going to get to our deliverables by adjusting the plan Plan. I try to use really focused questions to keep the project team on track, to really think through and be strategic about how we're adjusting the strategy while remaining flexible. So using questions such as what deliverables of the project are impacted, what's the severity, how can we adjust our approach, what are potential mitigation strategies, but also who needs to be informed, who needs to make decisions, and what's our new timelines?

Speaker B: You do risk reviews regularly with your teams. When do these discussions happen? Are you finding geostrategy or geopolitical considerations are coming up more often?

Speaker A: I dedicate time in my project status meetings to have updates with the project team about, you know, risks that they're seeing based on their area of expertise. Risks I'm seeing really having those discussions in those status meetings and if needed, taking it to separate conversations to dig in a bit more about the risks. But it, uh, really can't be separate. It needs to be rolled into one. So as a project manager, you're really taking that overview to understand what are all the risks for the project? I think depending on what's happening in the environment, geostrategy, volatility and risks does take up more of the time in the project status. You know, it's usually our first point when we're talking about risk. Depending on what's happening, we may have to take another meeting with key stakeholders to discuss further and in depth. But it is something that the project team definitely has to spend more time and energy on.

Speaker B: What geostrategy considerations are most prevalent for your work, and what are some areas where you see the biggest impact in the retail sector?

Speaker A: Mostly what I'm seeing is an impact from a compliance standpoint and a trade standpoint, especially what's happening in the world. I think a lot of retailers are seeing that for the geopolitical risks. It's really about tariffs. Any changes in legal laws that impact from a retail perspective? Labor or manufacturing tariffs are definitely a

Speaker B: geostrategy consideration for a lot of project teams right now. What makes them a unique challenge with

Speaker A: tariffs and the impact of cost and the uncertainty around that, it obviously impacts the budget. So in those instances where we know that there's a high probability of tariffs costs changing, I think it's about having open and honest conversation with your sponsors about, uh, the project budget and understanding if you need to put in a buffer or a contingency for the project budget. You know, it's not ideal. Nobody wants to put in a higher contingency for the budget, but sometimes it is necessary when you don't know what's going to happen and nobody can predict

Speaker B: it, you're contending with a range of geostrategy considerations. How do you identify, prioritize and even triage all these different threats and their potential impacts?

Speaker A: M so in order to prioritize I try to use tools such as the risk register to one keep track of everything and it's really leveraging my subject matter experts on the team, they understand how the risks can impact the project. I may not know the impact of the risk, but it's asking the questions and leading the team in these meetings to understand what's the biggest risk and what's the biggest impact on the project and the probability that it's going to happen, what's going to impact our deliverables, what's going to impact our budget and what's going to impact our schedule. It's my job to kind of sort it, uh, and triage it and continuously work with the teams for updates because something that may not have been a risk previously may be a higher risk. So it's always having those conversations but also triaging as we go.

Speaker B: Are those subject matter experts, region specific,

Speaker A: domain specific, they can be regional experts. We can also have, you know, domain specific experts. There may be a risk and we may not have that expert on the project team. So then at that point it's me reaching out to them for consultation, talk to them about the risk and what's happening to get their viewpoint on it. And sometimes it's actually bringing them um, onto the project team as that expert to consult and lead with us.

Speaker B: Uh, project managers are dealing with a lot of rapid change. What advice do you have for how they can stay up to date on geopolitics and have the geostrategy knowledge they need to run successful projects.

Speaker A: So that's definitely a challenge because there's so much information out there to look at. But it's also what is credible information. We can really get bombarded. So I try to take a more tailored approach. I do rely on, you know, my SMEs, experts in the organization, but externally I set up Google alerts for any of the regions that my project's in or anything I'm kind of hearing. So that helps filter out, uh, some of the information. Recently I began to explore how to use AI to stay up to date. I think that it's going to be a vital tool for project managers going forward, staying up to date in geostrategy. I really try to have that focused approach about finding credible Sources, filtering the relevant information at the right time. LinkedIn is another really great resource to use following, you know, leaders in the retail space or whatever space your project is in, as well as actually pmi. PMI has a lot of good resources that can be leveraged. There's a lot of webinars, journals and even events that I find help because it offers a viewpoint from a project management lens and it's current.

Speaker B: The energy industry can be particularly sensitive to geostrategy concerns because it's so dependent on having access to specific physical locations, keeping those locations safe and secure, and maintaining a reliable supply chain to and from those sites. Not to mention the sector is contending with new technologies and growing climate change impacts. Rosa Chilsanz is a project leader at oil and gas company Bayern Oil based in Munich. She has both the PMP and PMI RMP certifications. Rosa spoke with Projectified's Hannah LaBelle about how she approaches geostrategy in her projects.

Speaker C: Rosa, is geostrategy becoming a more critical factor in how you manage projects? And what, what are the forces that you're seeing drive this shift?

Speaker D: The world is changing very fast. And um, we have had recently events like wars or the COVID pandemic and we have seen the big influence that it had in our lives, industry, in the markets. The energy sector is especially exposed to this geopolitical, uh, issues because you know, we are dependent on physical resources, on infrastructure, and we are also very dependent on the tendencies in the international markets. We are dependent on oil and gas, on um, critical minerals. And these are sometimes concentrated in political unstable regions like Middle East, Russia and so on. Then the third one, the sensitivity to the markets, the material price, the oil price is going up and down. It can have a very big impact because it, it can also be that you're not making such a big profit that the economics of the project, they are not so attractive if the market is changing. For, uh, organization once to be successful, has to be able to adapt to such changes.

Speaker C: Can you just kind of expand on how you're seeing this sector and your projects being impacted by this geopolitical volatility?

Speaker D: When Russia embedded Ukraine, the oil prices, the price of barrel, it increased. Of course it has also big impact on the economics of the project, on the industry. When you have uh, a war in the world, you have of course supply chains, disruptions, you have all the materials, you have all the equipments and so on. And the market is getting crazy because suddenly you have longer delivery times, the prices of materials are increasing. It's very important for us project managers to keep an eye on that. You have to ensure that you have a risk management plan, that you identify the risks, that you identify the triggers and that you communicate the risk.

Speaker C: Are there any particular warning signs that you do watch for when you are running energy projects that maybe could trigger something like project reassessment or a, ah, major pivot?

Speaker D: Yeah, for some REITs, it's more easy than for other ones because as I say, you never know what's happening tomorrow. Be aware of possible emergent risks. You can look for economic triggers. You can take a look, okay, what is the oil price doing? What is the energy price? Are they changing? Do we know that we have any supply chains constraints? We as project managers, we have always to be updated on the current situation in politics and energy. Are there any new laws that we have to consider or maybe, you know, in the next year the government is planning to change. Do we see that maybe some political instability is coming? And for me the most important thing is when you are performing the reidentification, you have to do it with your team, with your stakeholders.

Speaker C: How are you kind of prioritizing these threats as you kind of create this risk list? Say, you know, you've got maybe an energy policy potentially shifting or supply chain issues due to a geopolitical situation. What are maybe some of the mitigation or management strategies you would consider in one of those scenarios?

Speaker D: The first step always is to identify the risk for the brainstorming. You have to ensure also, uh, to have a diverse team. You have to be sure to involve all stakeholders on that. Then you are doing the risk prioritization, qualitative analysis and then you have to assess the impact and the probability of the risk. And that's when you are coming also together, uh, with your risk team. You are building your risk metrics and then you see, okay, which are my risks with high priority, which are low priority risk, and so on. Then you are developing then your strategies. You have to work together with the team, with uh, stakeholders to develop the response, the mitigation measures. In case of supply chain disruptions. For example, you can have a plan B, you can work on the supplier diversification so that you know when you see, okay, this supplier is getting problems, then you have to have a plan B and you have to have somebody else who can supply you the materials or what you need. And of course you have maybe to plan more budget. You have also to plan a, uh, buffer in your timeline and uh, of course to communicate also with stakeholders.

Speaker C: Obviously There needs to be a lot of resilience and a lot of adaptability. So how do you as a project manager, ensure that you and your team can adjust your strategies fast when things do change? How do you kind of work to build a culture of resilience and adaptability when uncertainty kind of comes your way?

Speaker D: Well, for me the first measure is to have a, uh, clear, earned, transparent communication. You have to define clear rules, you have to define risk, you have to define and follow processes. You have always to have a plan and everyone in the team has to know what to do when a trigger is identified. And when I'm talking everyone in the team, I mean, you have also, uh, to have this clear and transparent communication with your project sponsors, with the management of your company, with your colleagues. You have to invest also in risk management training. Sometimes you see there are team members, for example, who maybe don't have such big experience with risk, uh, management methods or with the process and so on. You have to ensure that they understand what they are doing, all their risk management process works. And of course, very important for me is also to work on the mindset. Some years ago, Risk Management workshop for risk identification, uh, was doing, you know, an introduction. What's risk management? What are we doing and how are we doing that? One of the members of the team was saying, well, yeah, I think I understood it. Our goal is not to have this high priority risk. I said, no, that's not the goal. We have to identify the risk. That's okay. If we have this high priority risk having a big impact on the project, you have to know how to proceed when you identify your trigger. You have to work with your team on the mindset. Yeah, that they become more flexible. When you say the word risk, some people are getting afraid. And you don't have to be afraid of that. It's a normal process. You get risk in all your projects and you have just to know how to manage them.

Speaker C: Rosa, thank you so much for talking with me. I really enjoyed our conversation.

Speaker D: Thank you, Hannah, also from my side for this wonderful conversation.

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