Why are so many organisations pausing, hesitating or delaying decisions despite knowing that geopolitical risk for Nordic B2B companies is now a permanent feature of the business landscape? Yet uncertainty does not have to mean inertia.

In this Q&A with Dr Elizabeth Stephens, investment and country risk advisor and founder of Geopolitical Risk Advisory, she explains that today’s geopolitical disruption can become a source of strategic clarity, confidence and competitive advantage rather than fear.

Nordic awareness of geopolitical risk

How has Europe’s belief in a stable rules-based order created dangerous blind spots and paralysed decision-making when reality no longer fits the model?

Nordic organisations are generally more advanced in their appreciation of and understanding of geopolitical risk and its implications for business activity than their Western and Southern European counterparts because of their geographical proximity to Russia.

In contrast, Western Europe has become increasingly complacent since the 1990s and has deluded itself that the liberal order has prevailed and external threats have been vanquished. This is clearly not the case, but Western and Southern European governments are too psychologically and politically entangled in outdated assumptions to respond effectively, leading to a withdrawal of responsibility that ultimately weakens national and regional security.

This disconnect is evident in business activity. While many Nordic business people were slow to acknowledge that Donald Trump would likely prevail in the 2024 US presidential election, they were further ahead on the curve than the majority of their Western European counterparts in taking that possibility seriously.

As the threat posed by Russia has increased, with drones entering Nordic airspace, Nordic companies have become very realistic in acknowledging changes to the geopolitical landscape and that, irrespective of the outcome of the 2028 presidential election, we will not see a return to the rules-based international order.

Why some companies act while others freeze

If many Nordic companies understand geopolitical risk, why do only some act on it, and what separates decisive leadership from organisational freeze?

Companies that act decisively in the face of uncertainty are generally those with a strong CEO and board of directors who provide clear leadership.

Companies that become stuck tend to be those that abdicate responsibility for geopolitical risk strategy to more junior staff and/or those that are reluctant to take risks.

Viewing risk as opportunity creates a winning mindset and the confidence to look for new markets and trading partners as historic trading patterns change.

Leading through uncertainty

How can leaders build confidence internally and avoid risks from paralysing decision-making?

The first step is to talk about risk openly. I receive a large number of requests from companies to provide board-level briefings or company-wide presentations on geopolitics.

Often, the starting point of the briefing is to make clear that companies must deal with geopolitical reality as it is, not as they might want it to be. Be clear that organisations that ‘freeze’ will lose market share and be overtaken by competitors. This is the surest way to company failure.

Develop a culture that embraces the art of the possible by acting within known information and running scenarios for a range of future outcomes. Then act. Don’t let the quest for perfection undermine the ‘art of the possible’.

Scenario planning during permanent geopolitical disruption

Why is traditional scenario planning no longer fit for today’s geopolitical environment, and how should Nordic B2B firms adapt?

Companies must move away from the focus on ‘black swan’ events to one where they monitor underlying trends, sometimes referred to as ‘weak signals’ that provide early warnings of changes that may ultimately lead to significant geopolitical reconfiguration.

Rather than reacting to external shocks, companies must prioritise redesigning business positions within an international system that is fragmenting.

Scenario planning must incorporate a world where the integrated supply chains of yesterday are replaced by fragmentation, requiring supply chains to be either duplicated or segmented to ensure resilience against geopolitical friction. We are moving from a world of ‘just in time’ production to ‘just in case’ stockpiling.

Scenario-based thinking must be integrated into daily operations, whereby scenarios are updated in real time, rather than remaining as static quarterly or annual exercises.

Finland’s shifting risk and opportunity landscape

What new risks do you think Finnish companies may be underestimating as they plan for the next 3–5 years?

Finnish and Nordic companies are underestimating the risk of NATO fragmentation. This is usually thought of in terms of the US reneging on its commitment to Article 5 of the Charter. In reality, fragmentation among European NATO members is more pronounced and poses the greatest threat to the security of the continent.

To provide context, Poland and the Baltic states are spending 5% of GDP on defence because their geographical proximity to Russia heightens their sense of vulnerability. Western European countries are committing to increasing defence spending over the next five years to between 3–3.5% of GDP. However, this is rhetoric over substance.

In the case of France, no new money has been found, while Germany has committed to increased spending, no additional hardware is available to troops. Portugal and Spain have refused to increase defence spending, undermining their ability to effectively respond in the event of an attack on a NATO ally. Geography makes them complacent.

The Iran war has provided another stark wake-up call to how woefully inadequate European defence is.

Without an effective deterrent capability, the continent and every business operating within it is more vulnerable to grey zone, cyber and physical attack.

In parallel, what opportunities could Finnish companies be overlooking in the same time frame?

European defence spending will increase over the next decade. It may not be fast enough to deter a Russian attack. Still, it will create opportunities for Finnish companies to become involved in defence manufacturing and to develop dual‑use products and services spanning defence and civilian markets. This will be the largest European growth area in the medium term.

Frequently asked questions on geopolitical risk in the Nordics

Why are Nordic B2B companies struggling to act on geopolitical risk?

Nordic companies often have high awareness of geopolitical threats but lack clear executive ownership, leading to delayed decisions and organisational paralysis.

How does geopolitical risk affect Finnish companies differently?

Finland’s geography, NATO membership, and proximity to Russia expose Finnish firms to higher security, cyber, and supply-chain risks but also defence-sector opportunities.

What is the biggest mistake companies make in scenario planning today?

Treating scenarios as static, annual exercises instead of continuously updated tools embedded in daily decision-making.

Can geopolitical disruption create competitive advantage?

Yes. Companies that treat risk as a strategic input, not an external shock, are better positioned to redesign supply chains, enter new markets, and outperform slower competitors.

Photo by Basma Alghali on Unsplash