Businesses must learn to live with uncertainty: Charles Hecker

This was the overriding message of a wide-ranging talk from world-renowned journalist, author and academic, Charles Hecker, on the final day of Airmic’s annual conference.

Speaking with Airmic’s chief markets officer, Alex Frost, he believes we are now living in a new world order that is “more precarious and unstable than it has been in a very long time.” Businesses must learn to accept this: “We have to make plans in an environment of uncertainty and we’re not getting that,” he said.

Reflecting on this new world order, Hecker drew on three key trends for businesses to be mindful of.

First, globalisation is under enormous pressure, shrinking much “faster and more violently” than anyone predicted.

Second, the U.S. has shifted from an institution-driven country to a personality-driven country. “The shift means predictability goes out the window and that’s a very uncomfortable place for businesses to be.”

Third, the U.S. has revoked its role of “global sheriff”. This raises the question of whether another country or region will take its position: “All eyes are on China although I’m not sure they want that role. But could we see a move away from Western leadership?” he asked.

Businesses managing this uncertainty must try and take a long-term view, he advised, and use scenario planning to build resilience. “If you can build a series of pictures of how the world may look in five, ten and fifteen years and stress test your company against where it might be, then you are in a good position.”

Risk and insurance takeaways:

• Today’s risk lives in the immediate, not in the future;

• Globalisation is shrinking and the U.S. has revoked its role of global sheriff;

• Businesses must accept the uncertainty, take a long-term view and lean on scenario planning.