Turning uncertainty into advantage: a rearranged chessboard and the boards that haven’t noticed

Reflections from last night’s Heligan Advisory Network panel on volatility, capital, supply chains and defence

A CEO in the room last night put it best during drinks afterwards: “I came in thinking the world had got more uncertain. Now I’m leaving thinking the world has got more coercible. That’s a different problem.”

It is a different problem. Uncertainty is something boards have always priced. Coercion is something most boards still don’t price at all, because the assumption underneath their plans is that someone else keeps the peace, polices the sea lanes and underwrites dollar liquidity. That assumption has been the silent subsidy on three decades of strategy decks. The subsidy is being withdrawn, and the cost is now visible on the balance sheet: after the 28 February US-Israeli strikes on Iran, Strait of Hormuz war-risk premiums repriced from 0.2% to 5% of hull value inside a fortnight, P&I clubs issued 72-hour cancellation notices effective 5 March, the Lloyd’s Joint War Committee designated the entire Persian Gulf high-risk, and tanker traffic collapsed by more than 80%; China’s April 2025 export controls on samarium, terbium, dysprosium, yttrium and four other rare earths remain in force, with the broader October 2025 tranche paused at Busan for twelve months but legally on the books; and the UK Defence Investment Plan, due last autumn, was promised by the Defence Secretary on 1 June “before the NATO summit” in Ankara on 7–8 July.

Last night’s HAN panel, “Turning Uncertainty into Advantage”, chaired by Ian Gorsuch, brought together four of us with different angles on the same shift. We are watching the world reorder itself from a system built around US hegemony and rules-based assumptions into a multipolar one where powers act in their interests, asymmetrically, and where historic alliances no longer guarantee the answer to the next question.

The chessboard has been rearranged

The shift from unipolar US hegemony to multipolarity is now the working assumption across the global south, the Gulf and Beijing, and increasingly so inside the West. The Trump administration’s 1 May order to withdraw 5,000 troops from Germany, the one-third to one-half planned cut to US deep-strike capability in Europe briefed by Pentagon official Alexander Velez-Green to NATO defence policy directors in Brussels on 22 May, the Trump–Xi rare-earth truce that neither side has fully unwound, the parallel hardening of US export controls on Chinese magnets under the Defence Acquisition Regulations System from January 2027: these are not separate events; they’re the same event, observed in different theatres.

Domestic politics in the UK has had a corresponding dose of realism, though Westminster is lagging the public on it. Net zero is the test case. Households paying among the highest electricity prices in the OECD have already drawn the conclusion that the strategic logic and the household-bills logic point the same way. Political parties will arrive at the same conclusion later, because ideology eventually has to concede to national interest. The tempting counter-argument is that fifteen years of stalled onshore wind and solar consents explain today’s prices. They don’t. UK bills are set by gas at the margin, carbon costs, network charges and policy levies, not by a shortage of intermittent megawatts. Germany built the megawatts and still has Europe’s highest retail prices. The binding constraint is firm dispatchable capacity and grid, not generation volume. The energy bill problem is real, the realist reframe is overdue, and the policy failure that produced both is bipartisan.

AI is the other live lever. Its real value is not in replacing human judgement but in eliminating the administrative waste accrued across business and government over decades, so that human beings can spend their time on the work only they can do. The condition is design discipline: checks, balances, and human-in-the-loop architecture embedded from the start, not retrofitted after the fact. Anyone selling autonomous-agent enterprise transformation without that architecture is selling the AI-register version of the problem they claim to solve. Though worth noting here that AI runs on electricity, and a lot of it. Ministers talk fluently about AI Growth Zones and sovereign compute while the capacity needed to power them remains the part of the system nobody wants to commission. Another reality check: you cannot have a hyperscaler-grade industrial strategy and a generation mix that struggles to keep the lights on through a still winter week. One of those positions has to give.

Four core arguments

Major General (retired) Seumas Kerr CBE, CEO of Defence Impact, made the argument with the largest implications. Business leaders need to take more responsibility for holding government to account, because the operating environment is now a function of policy choices business leaders have historically declined to contest. The default CEO posture of treating government as weather rather than counterparty has produced the procurement, planning and capital-markets frictions that every founder in the room could recite from memory. Seumas’s point is that the cost of that passivity now exceeds the cost of engagement. I’d extend Seumas’s point one step further. Our CEOs also have to be honest that some of the policy frictions exist because the policy class has had no credible business interlocutor for fifteen years. Holding government to account is the second half of a sentence that starts with showing up.

James Waddington, Founder of Otto Colline, made the case from the SME defence frontline. Government has to make it materially easier for small and mid-sized firms to access the defence sector, and worth a business’s while to take the risk and “fail fast” without that failure crippling them. The Defence Investment Plan delay is the live example. Every month of ambiguity is a month an SME cannot model 10-year revenue, cannot justify a deal multiple, and cannot persuade an investor that procurement will eventually reward the bet. ADS tells us that SMEs are “struggling significantly”. The £20m “defence unicorn” pot announced on 19 May, funding up to 13 SME contracts capped at £4m each via Commercial X, is the right architecture and a tenth of the scale required.

Matt Croker, our Partner of Defence and National Security at Heligan, made the financial-market case. The sector is one of the only ones in the UK economy where capital is flowing into companies, mandates and capability faster than the existing supply of sector-fluent corporate-finance advisers can absorb. Closing that gap with deep, lived experience of how defence and national security actually procure, contract and de-risk is the Heligan thesis.

These are not three separate arguments. They are the same argument from different ends of the same problem. The UK has the talent, the capital, the institutions and the strategic position to be one of the winners of this rearrangement. It is, in too many cases, succeeding in spite of government policy rather than because of it.

What to do on Monday morning

Build a coercion map. For every material revenue line, ask one question: who can stop us operating without firing a shot? Then put a decision against each exposure: buy inventory, dual-source, raise liquidity, restructure jurisdiction, secure insurance, exit. The output is one page. The exercise takes a morning. The hardest part is that some of the answers will name customers, suppliers, financiers, or jurisdictions whose risk has been politically uncomfortable to acknowledge.

I would change this recommendation if the OECD-wide reversion to rules-based commercial assumptions accelerates over the next twelve months. It will not. The Patriot diversion to the Gulf, the rare-earth stand-off, the DIP delay, and the US troop withdrawals from Europe are not policy oscillations. They are the policy.

The companies that win the next decade won’t be those with the cleverest forecasts. They will be those that already know where they are politically hostage and have bought themselves options. The countries that win it will be those that recognise wealth creation as a strategic asset, not a moral problem. Geopolitics is no longer context for business. It is operating infrastructure.

My thanks to Ian Gorsuch and the HAN team for the convening, to Seumas, James and Matt for the discourse that made the evening, and to the audience for asking the questions that wouldn’t have been comfortable in a more polite room.