We live in an interesting era. The relative peace and stability of the late 20th century and the steady growth of prosperity, fuelled by technological advances and globalisation, is under increasing threat. A fast changing, dangerous and unpredictable world has emerged. Large scale war has returned to Europe, the Levant and the Red Sea. More recently the tense India/Pakistan relationship reignited into conflict. Detailed understanding, expert analysis, clear decision making and a long view are more important than ever. Now is the time for proper strategy.
At the Royal College of Defence Studies, we teach strategy to senior leaders from around the world. Today this is more important than ever, yet the concept of strategy is frequently misunderstood and often absent. This extends well beyond defence and government; it is equally relevant to financial institutions. In both sectors, we face volatility, complexity and accelerated change. The ability to think and act strategically is what distinguishes reactive organisations from resilient ones.
One in eight people worldwide are now exposed to conflict.
World stability is under significant strain. The optimism of the post-Cold War period has dissolved into geopolitical tension, economic uncertainty and insecurity. The rules-based international order, which provided the framework for nations after the chaos and horrors of two world wars, has eroded. The UN is emasculated, and the US has stepped away from its role as ‘Global Policeman’.
The new normal
Norms of behaviour and interaction have been disrupted; interests trump values. A harsher, more aggressive world is emerging, where hard power is the primary lever of international relations. Nations flout the rules when it is in their national interest, with nothing to check bad behaviour: a Thucydidean reality, where the strong do what they can, and the weak suffer what they must.
The number and intensity of active conflicts globally has now reached a record high. Political violence has increased dramatically, rising 25% last year compared to 2023. One in eight people worldwide are now exposed to conflict. Global military spending has surged amid rising tensions and insecurity. European nations, who took (and spent) their ‘peace dividend’ over the years of discretionary wars after the fall of the Berlin Wall, have been caught with their trousers down.
In the UK, years of wishful groupthink, underinvestment (as well as the occasional profligate use of national wealth to improve living standards for political gain) has left Britain's defence in a parlous state. The frog has boiled; we are now playing catch-up after years of underinvestment in national security.
A focus on short and medium-term risks has reduced the emphasis on the key existential threat to humanity and the planet – climate change.
Thanks to the peace and stability of the late 20th and early 21st centuries, few people in the world’s largest economies have witnessed the real impact of war. For most affluent nations, including the UK, war has been a thing of distant lands with modest investment of national treasure. Indeed, notwithstanding the bravery and sacrifice of those we lost in recent conflicts, and the tragedy for their friends and families, the impact on society has been low. A descent into conflict between the world’s major powers would be unimaginably catastrophic.
A doubtful outlook for global development
Despite this, democratic nations find it difficult to implement the types of policies required to address contemporary security challenges. The level of investment now needed to put things right may represent an unpalatable impact for the electorate. The rise of populist leaders, endorsed by populations manipulated by information campaigns unconstrained by truth and values, presents an additional challenge. Furthermore, a focus on short and medium-term risks has reduced the emphasis on the key existential threat to humanity and the planet – climate change.
The global outlook for prosperity and development is increasingly uncertain. The IMF’s most recent analysis indicates a slowdown in growth and increase in risks. Economic security, food security and human security all rely on global trade. While the rules-based international order weakens, the interconnection of supply chains and communications has not, creating new dependencies and risks, as well as opportunities.
Defining strategy
In such a challenging environment, a strategic approach is critical. It is important to understand what this means: strategy can be all things to all people, so the meaning can be somewhat ethereal. The word ‘strategy’ is often used as a label, without the intellectual foundation that the concept requires.
There are many definitions of strategy. Most share a few key characteristics: a clear, long-term plan for success, an idea of how it will be achieved and stated objectives that can be met with the levers and resources available. Strategy is about creating value and charting a path to success. The objectives are clear and can be achieved within the means at the organisation's disposal. Furthermore, doing so is affordable within the resources available.
The best methods for strategy making all share some important steps. At the planning stage — to gain an expert understanding, develop a creative process to determine options for the way forward and then conduct critical analysis to test and assess the strategic options. Once a decision has been made, clear communication and monitoring are needed to ensure successful implementation. Lastly, a review should be conducted to assess key learning points for the future.
Poor strategy can be traced back to a failure in one of these areas. Ignorance, hubris and overconfidence are tempting substitutes for deep and expert understanding. The creative process can be constrained through committees, bias and preconception. Sometimes it is skipped entirely if the senior leader ‘knows the way forward’ already. A thorough critical analysis may be seen as a luxury when time is short, or a route to inconvenient truths when fixed on a particular course of action. Poor critical analysis means that both the strategy and the process are likely to be flawed. Sometimes there is a lack of clarity on what has been decided, or no decision at all (rather than a conscious decision to do nothing). Communication can be ineffective or confusing, leaving the organisation unclear on what must be done.
The first line of defence
A good strategy is designed with the ability to measure progress towards the objectives. Without this, it is very difficult to assess whether you are on track, and it is easy to be spoofed by positivity bias. And environmental velocity – the speed of situational change – is increasing. Strategy has an ever-decreasing half-life and can quickly send organisations the wrong way if there is not a routine review process. Yesterday’s good idea may be today’s risk. Good strategy is achievable, affordable, and also adaptable as and when required.
Now is not the time for improvisation: it is the time for intelligent design.
In an era defined by volatility, complexity and rapid change, the need for coherent, effective strategy has never been greater. Yet too often, both governments and financial institutions fall short—one hampered by political cycles and bureaucratic inertia, the other by short-termism and market pressure. Strategic success demands more than labels or lofty ambitions: it requires discipline, deep understanding, critical thinking and the courage to make hard choices. Whether managing a nation’s security or stewarding capital in a fragile world, we must rediscover the art—and the urgency—of proper strategy. Now is not the time for improvisation: it is the time for intelligent design.
As a military officer, I do not pretend to be a financial expert. But I do recognise when an organisation (whether political, a military formation or an asset manager) is prepared for adversity. The characteristics are the same: clear direction, strong leadership, adaptable planning, and a culture of continuous learning. Financial institutions today face a world as unpredictable as any battlefield. Those who succeed will be those who understand that strategy is not a luxury ‒ it is their first line of defence.
Major General Felix Gedney
Major General Felix Gedney has been in the Army for 39 years. He has spent most of his time overseas on operations and working with allies, particularly in the US and Middle East. His career has involved team, organisational and strategic leadership, and his last jobs have been focused on strategy and national security. Felix retired from the regular Army in 2024, but has continued to serve part time as one of the Senior Directing Staff at the Royal College of Defence Studies in London. He also works as a consultant, teaching strategy and advising technology companies.
