READ TIME: 9 MINUTES | 28 JANUARY, 2026 | READ ON PHILHSC.COM​

What you’re about to read combines my thoughts and those with significant military, intelligence and international affairs experience. Their identities remain confidential due to the nature of their work.

We have a strange relationship with risk.

And when it comes to conflict between nations, that relationship could be costing us more than we think.

This past week has been a turning point in world affairs. The US administration signaled that allies will now receive limited support. Canada has called on middle powers to form a new kind of partnership. The risk of entering conflict as the world reorganises itself is higher than it's been in decades.

Let me be clear: No one wants conflict.

But the uncomfortable truth is that we need to be ready for it.

That sounds dramatic. And humans are excellent at favouring drama over reality.

But here's what I see in conversations with CEOs: when the topic of preparing for potential military conflict comes up, it's often considered unlikely. Too far outside the scope of traditional business planning.

And traditional risk management frameworks? They're not cutting it.

Because humans aren't generally good at risk assessment.

We overestimate immediate threats and underestimate slow-building ones. We catastrophize unlikely scenarios while ignoring probable ones. And when it comes to managing risk in business, the worst-case scenario we imagine rarely is.

So let me share a different way to think about this, one grounded in history, human nature and the practical reality of what business leaders have done (and can do) when their countries face conflict.

Not as fear-mongering. But as leadership.

Why this time is different

For countries like Australia and New Zealand, combat operations have historically happened far from our doorstep.

Korea. Vietnam. Afghanistan. Iraq. All distant theatres where our forces deployed, but where the fighting never reached our shores.

The next conflict, if it comes, is likely to be closer. And it will more immediately impact the systems that drive our way of life.

Consider China's well-expressed approach to reunification with Taiwan. This isn't speculation. It's a stated policy. And any conflict in that region would directly affect supply chains, trade routes and economic systems that our countries' businesses depend on daily.

But here's the point that most miss: Conflict is already happening.

Each day, cyber warfare is waged in silent and sustained ways against financial and public infrastructure. State-sponsored actors probe defences, map vulnerabilities and position themselves for potential disruption.

This isn't theoretical. It's occurring right now. Governments do tremendous work in this arena, ably supported by businesses with domain expertise. This is an example of industry-government relationships deepening in the shadows, ahead of any use of hard power.

The economic domain is equally active.

So when we talk about "preparing for conflict," we're not preparing for some distant, hypothetical future. We're preparing for an escalation of what's already underway.

What history teaches us

When most people think about war, they imagine sudden chaos. Bombs falling without warning. Rapid disruption. No time to prepare.

History tells a different story.

For most of modern history, war was formally declared before major combat operations began. World War I followed a clear sequence of declarations in July-August 1914: Austria-Hungary on Serbia, Germany on Russia, Germany on France, Britain on Germany. In each case, the formal declaration preceded direct combat. Sometimes by hours, sometimes by days.

When Britain and France declared war on Germany on September 3, 1939, after Germany invaded Poland, the "Phoney War" followed, a period of limited military action on the Western Front while both sides mobilised.

1945 marked the last formal declaration of war between sovereign states.

Since then, there hasn't been another sovereign nation formally declaring war on another in the traditional sense. Instead, according to research from the Hoover Institute, there have been over 200 other types of declaration: states of war declared internally and declarations against non-state actors.

This distinction matters enormously. When a formal declaration of war is made, in today’s rules based order, specific international law provisions activate. Frameworks kick in. Governments gain explicit rights to redirect resources.

The post-1945 conflicts involved declarations, but not the formal, sovereign-to-sovereign declarations that trigger the full legal architecture of war.

Here's what this means for you:

Conflict follows a process. There are warnings. Indicators. Escalation patterns.

But the warning times for modern conflicts are dramatically shorter than historical precedents. The ability to mobilise resources today takes hours or days rather than months and years.

I think this means there is greater urgency to understand what actually makes your business tick.

Intelligence-driven organisations watch indicators across four elements of national power: Diplomatic. Economic. Informational. Military.

Often the focus is on hard (or military) power. But as I noted earlier, what's happening in the economic and cyber domains is already conflict.

These are the warning signs. And they're visible now to those watching the right indicators.

Leaders who assume war will arrive as sudden, unpredictable chaos are operating on drama, not reality.

The reality is there are warning signs and mobilisation happens fast so understanding your dependencies and watching the right indicators is more important than ever.

What history tells us about humans under stress

There is one other assumption that needs challenging: that war breaks people and communities.

In his book Humankind, Rutger Bregman observes that Hitler, Churchill, Roosevelt and their advisors all believed that bombing civilian populations would shatter morale.

They were wrong.

"The more they bombed, the thicker it got," Bregman writes. "Seems [morale] wasn't a thin membrane at all, but a callus."

The resilience the British showed during the Blitz wasn't uniquely British. As Bregman concludes: "It's universally human."

When faced with an external threat, humans don't scatter. We come together.

We find purpose and we support one another.

We become more resilient under pressure, not less.

But leadership is the essential ingredient.

Human resilience isn't automatic. It requires leadership that empowers and enables people to support each other.

Poor leadership, or poorly led peoples, will find it harder to come together and prevail in resource-constrained contexts, which all conflicts are.

And the first step a leader takes during a crisis cannot be overestimated.

It sets the tone for whether the community fragments or unifies.

The role of business in wartime

Matthew Newman, a John Monash Scholar, recently made this observation:

"History suggests that when the nation is truly tested, it is not only soldiers and diplomats who play a leading role, but also miners, logisticians, financiers, and innovators—people who can scale up manufacturing production, marshal supply chains and deliver on wartime needs."

He points to Essington Lewis as a powerful example. Lewis was managing director of BHP during World War II and went on to lead both the Commonwealth Munitions Board and the Department of Aircraft Production, driving national rearmament and industrial mobilisation.

What made Lewis effective was geopolitical awareness. He’d traveled to Japan in the 1930s and recognised emerging threats and the willingness to challenge the status quo. He prepared years before war was declared.

As warning times shrink, the ability to make connections, prepare to collaborate, and understand how your company can help the nation becomes critical.

This isn't just about leading through conflict. There is an opportunity to lead beyond the conflict, to emerge as a leader who helped the nation through crisis, who strengthened communities, who demonstrated what business leadership actually means when it matters most.

When Australia entered World War II, businesses responded immediately and many thrived.

• David Jones began production on uniforms, staff handed out sandwiches to city wardens, and the company protected pay for employees who went to war. Despite the Ministry of Munitions boarding up the entire Market Street storefront except for a small window, sales rose from £3.5M to £4.3M between 1938 and 1944.
• Myer moved even faster. When Prime Minister Menzies announced war in September 1939, Norman Myer immediately wrote offering their entire facilities and resources.
• Colonial Bank of Australasia merged with the government-owned Commonwealth Bank in 1941, effectively becoming the core retail banking arm of what is now one of Australia's Big Four banks.
• Textile manufacturers provided vast amounts of clothing to hundreds of thousands of American service personnel in the Southwest Pacific.

These weren't stories of sacrifice and decline. They were stories of businesses that served their nation and positioned themselves for post-war success.

National frameworks and the grey zone problem

In most countries, governments have frameworks that allow them to redistribute the effort of national providers during wartime. This applies to logistics companies, airlines and telecommunications providers to name a few.

Understanding the nuance is critical.

When a formal declaration of war happens, these frameworks activate immediately. The government gains legal authority to redirect resources.

But without a formal declaration (in the grey zone we're more likely to face) governments must pay rather than take. They don't want to declare war. They don't want to pay market rates. And they can't pay for preparations ahead of time.

What they can do is identify what the nation should look like beyond potential conflict and invest in preparations that strengthen the nation regardless.

This is where mature conversations between business and government matter.

Wherever your business sits in the architecture of society, the question is: How can you simultaneously prepare to support the nation while building a stronger, more resilient business?

The two aren't in conflict. They're aligned.

Times have changed for 'the national interest'

In WWI and WWII, the calculus was simpler: protect the nation and help allies.

Today, we live in a paradox: An interconnected world where national interest is important AND shareholder interests matter AND international partnerships create prosperity.

Appealing to "the national interest" alone isn't enough. Because we know our global partnerships make life better for everyone.

So the question isn’t: "How do I sacrifice business interests for national needs?"

The questions are:

• How can we prepare for conflict AND emerge stronger if it arises?
• If conflict doesn't arise, how do we emerge stronger anyway?

The businesses that prepare well don't just help their nation in crisis. They build enterprises that are more resilient to any disruption, better connected globally, more trusted by all stakeholders and positioned to lead through and beyond whatever comes.

Five steps CEOs should take now

Here is the approach I'm sharing with CEOs because traditional risk management functions aren't equipped to advise on this subject.

Here's what practical preparation looks like:

Step 1: Initiate confidential CEO peer conversations

You're not alone in thinking about this. Other CEOs in your industry, in adjacent sectors, in your region are grappling with the same uncertainty.

Have honest, peer-to-peer exchanges about what you're seeing, what you're planning and what concerns you. These conversations build relationships that matter when things move fast and create informal networks that can activate quickly.

Step 2: Identify your dependencies and capacity

Map what your business depends on that could be disrupted in conflict (supply chains, talent, technology, infrastructure, international partnerships).

Then identify what capacity you have that could serve national needs. Manufacturing capability? Logistics expertise? Technology infrastructure? Supply chain relationships?

Be specific. "We could redirect 30% of manufacturing capacity within 72 hours" is more useful than "we want to help."

Step 3: Conduct scenario-based planning

Gather your leadership team and walk through scenarios: "If regional conflict escalates in the next 12 months, what happens?"

• What do our customers need from us?
• What does our government potentially need from us?
• What partnerships would we need to activate?
• What trade-offs would we face?
• How do we communicate with our team?
• How do we want to emerge when this passes?

Step 4: Build peer-to-peer commercial partnerships

Don't approach government individually. Instead, have private conversations with 4-5 companies whose capabilities complement yours. Align on what you could collectively deliver. Understand each other's dependencies and capacities.

Then consider approaching the government as a coalition: "We've spoken as a group and we're ready to deliver X if needed."

This makes you far more valuable than any individual company and demonstrates the kind of collaborative leadership governments need during a crisis.

Step 5: Create an activation plan that works regardless

Develop a practical plan for how you'd mobilise if conflict escalates. Who needs to be called? What gets activated first? What decisions need pre-authorisation?

But here's the critical part: Design this plan so it also works if conflict doesn't arise.

The partnerships you're building, the capacity you're developing, the relationships with government and peers should strengthen your business whether or not conflict comes.

This isn't a "war plan." It's a resilience strategy that makes you stronger in any scenario.

A different kind of realism

At the end of Humankind, Rutger Bregman challenges us to reconsider what "realism" means:

"In truth, it's the cynic who's out of touch. In truth, we're living on Planet A, where people are deeply inclined to be good to one another. So be realistic. Be courageous. Be true to your nature and offer your trust... What's naive today may be common sense tomorrow. It's time for a new realism."

The cynic says: "War will destroy everything. There's no point preparing."

The realist says: "Conflict will test us. History shows that well-led humans and organisations become more resilient and collaborative under pressure. Let's prepare now and not from fear, but from responsibility."

The bottom line

Planning ahead of time, when emotions are lower and the need feels less urgent, is when the best ideas are developed.

Time and space to gather perspectives and plot coherent paths make the difference between responding and reacting.

This can't be done the night of the event.

When crisis hits, you don't rise to the occasion. You fall to the level of your preparation.

The CEOs who have already had the difficult conversations, built the relationships and thought through their purpose and capacity will respond with clarity and confidence.

The ones who waited will react with confusion and delay.

We're living in a moment where the rules of the last 80 years are changing. Middle powers are being asked to step up. Alliances are being redefined.

And conflict in cyber, economic and potentially kinetic forms is closer to home than it's been in generations.

With this context in mind, here are my two questions for you:

1. What is your company's purpose when your country faces conflict and how does that purpose make you stronger regardless?
2. What conversations need to happen now, privately, to build partnerships that serve both national resilience and business strength?

These aren't comfortable questions. But they're the right questions.

The leaders who answer them now, who prepare with realism, courage, and purpose, will be the ones who lead effectively when it matters most and well into the future.

If your business would like a confidential strategic conversation facilitated by external advisors who can run trusted, closed sessions with CEOs on this subject, reply to this email.

Finally, if you have a different perspective or a view that builds on this thinking, I’d love to hear it.

Thanks for being here, I appreciate it.

THE PARTNERSHIP PLAYBOOK PODCAST

Here are this week’s podcast episodes for your walk, commute or workout.

PARTNERSHIPS MOMENT

EP 155 - 10 min: How GTM leaders can handle tough partner conversations without burning bridges. Here’s how to plan, approach, and execute difficult partner conversations with clarity, confidence, and leadership presence so both sides leave with more respect, even if the partnership needs to end. Listen on Apple Podcasts | Spotify​

LEADERSHIP MOMENT

EP 156 - 9 min: How CEOs create leadership leverage without becoming the bottleneck. Are you building a leadership team that actually creates leverage or are you still carrying more weight than you should? If the latter, here is the clear approach to leadership that drives growth and strengthens leadership without sacrificing performance. Listen on Apple Podcasts | Spotify​

CEO INTERVIEW

EP 25 - 55 min: Georgie Holt CEO at FlightStory. Meet the CEO behind the Diary of a CEO podcast and the stable of the fastest growing podcasts in the world today. In this episode we cover why urgent teams win and the relationship between growth and long form media content. Listen on Apple Podcasts | Spotify​

See you next Wednesday,

Phil Hayes-St Clair
CEO Coach

​Find me on LinkedIn​

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