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August 12, 2015 | by Steve Lawrence

The World Battleground

Global turmoil and what it could mean for your business

Retired Four Star Admiral and Navy SEAL Eric Olson told the Carbon Conference in February, “we live in a world that is constantly being reconstructed and deconstructed… fighting in places we barely understand.”

Then at the Specialty Metals Conference in March, retired U.S. Marine Corps. four star general Anthony Zinni, now CEO of BAE Systems Inc., dramatically expanded that picture of a “world that is reordering itself and not well.”

He pointed back to the Treaty of Versailles at the end of the First World War, when the allies carved up and restructured the Middle East into “sovereign states without regard for tribal affiliation, traditional boundaries or religious identities.” We are watching the erosion and disintegration of many of these artificial sovereignties and, as he put it, “states that should never have been states.”

“There are no true superpowers anymore,” he said, “we need alliances and defense priorities that recognize this new world…”

“We may now be in a 50 year process of sorting this out, and it is not coming together,” he concluded. The dangers and uncertainties seem to shift constantly, Zinni said, especially the transformation of the Islamic world, which spreads across major strategic land and sea chokepoints, including key oil and international commerce supply routes like the Straits of Hormuz and the Suez Canal.

“The dynamics that drive the world today—globalization, an interdependence and connection of networks like we have never seen before—are changing the distribution of power,” he said. This in turn changes the investment decisions that countries and businesses must make as they reorder their priorities. “Our defense budget decisions used to be made on the “win one-hold one” theory of fighting wars, funding enough military force to fight on at least two fronts at any time. “There are no true superpowers anymore,” he said, “we need alliances and defense priorities that recognize this new world, recognize that we are often dealing with ungovernable states like Somalia and Yemen, or elusive enemies. We have now identified 62 different terrorist groups worldwide, but that number is changing all the time.”

Business leaders consequently need to be alert to shifting national spending priorities and potential new markets and challenges. He listed space, cyberspace, sea-routes, communications, and commercial airlines as some of these areas where markets are shifting along with business opportunities.

But global turmoil, he emphasized, is not confined to military considerations. Urbanization, the impact of climate change, shifting energy dependencies and the increasing market strength of renewable energy sources, are all sectors of opportunity for modern business leaders, he said.

Military power, Zinni concluded, may have a limited impact on the resolution of many of these points of world conflict. “We saw in Iraq, that you cannot rebuild a country with the military alone,” he said. And the developing agreement with Iran over its nuclear weapons program will not work, he said “without verification and enforcement.” If Iran develops a nuclear capability, he cautioned, “It could not be wiped out with a couple of airstrikes.”

Zinni's latest book, “Leading the Charge” is based on his leadership experiences from the battlefield to the boardroom. 

Learn more about upcoming MSCI conferences addressing global turmoil.