Think, prepare, respond: How finance leaders can help businesses navigate the Middle East crisis

Today’s business environment is no longer defined by a single shock, but by ongoing geopolitical events shaping the macro-economic environment. Businesses are operating amid a polycrisis, with renewed uncertainty in the Middle East adding pressure to an already challenging environment.

Operating in near continuous disruption – inflation, tax, interest rates, wage costs, technology, consumer confidence and now supply chains and energy costs – places significant strain on leadership, financial management and organisational resilience across all sectors. Business leaders are now being asked to look beyond short-term crisis response and place greater emphasis on building resilience to long-term uncertainty.

So how can finance leaders help their organisations become resilient – and not just survive, but thrive?

At CIMA, we believe the most practical way to business resilience is to ask three simple questions: how do we think, how do we prepare and how do we respond? This is the approach we set out in our Business Resilience Toolkit for Finance Leaders.

Think: Are we adopting the right mindset in a crisis-prone world?

The first step is recognising that volatility is no longer temporary. Inflation and geopolitical risk should be treated as persistent operating conditions, not exceptional events.

The economic effects of the Middle East crisis are unlikely to unwind quickly. Even where conflict de-escalates, the structural impacts on trade, energy and insurance markets are likely to endure. This calls for a shift in mindset among finance leaders: away from narrow control and backward-looking reporting, toward anticipation, preparation and co-ordinated action across the business.

This broader thinking – often described as an ‘entity risk mindset’ – looks beyond financial metrics in isolation to understand how interconnected risks affect the organisation.

Key questions for finance leaders include:

Geopolitical risk

• Where is the business most exposed to geopolitical disruption – through operations, suppliers, logistics routes, energy inputs, staff or customers?
• Which costs are most sensitive to energy price volatility or trade disruption?
• How resilient are critical suppliers and routes, and are viable alternatives available?
• What secondary impacts could arise, including demand shifts, delivery delays, workforce pressure or reputational risk?
• What mitigations or contingencies could be enacted if disruption escalates?

Macro-economic risk

• How exposed is the business model to sustained inflation or cost volatility?
• Which costs adjust quickly, and which are fixed or slow-moving?
• How would prolonged higher interest rates affect cashflow, debt servicing, wage costs and investment capacity?
• How sensitive is the business to combined shocks – rising costs alongside weakening demand?
• What financial or operational levers are available if conditions deteriorate?

This mindset matters because thin buffers amplify the cost of delayed decisions. In volatile conditions, speed and clarity of decision-making become central to resilience.

Prepare: Are our scenario plans and stress testing processes sufficient for disruption?

Rather than predicting a single future, finance leaders should focus on a small number of plausible but challenging scenarios. Scenario planning and stress testing are particularly powerful in environments shaped by inflation and geopolitical instability.

Relevant scenarios may include:

• Sustained energy price volatility linked to prolonged geopolitical tension.
• Disruption to key supply routes, raising transport and insurance costs.
• Rising wage pressure alongside a softening demand.
• Combined shocks, where cost escalation and revenue pressure occur simultaneously.

These scenarios should typically be developed into best, medium and downside cases. Stress-testing then assesses whether liquidity and cashflow can be maintained, and where pressure points emerge across the income statement, balance sheet and operations.

Crucially, this work should not be confined to finance teams. Scenario planning is most effective when embedded from board level through to frontline operations, creating a shared understanding of risk and preparedness across the organisation.

Respond: Three actions finance leaders can take now

With the right mindset and preparation in place, there are three areas where finance-led action can deliver immediate and lasting impact.

1. Strengthen cost control – Strategically and collaboratively

As a result of the Middle East crisis, energy volatility, higher freight premiums and increased insurance costs are feeding directly into business cost bases.

Cost control remains one of management’s most powerful levers, but it must be applied strategically rather than through blunt cuts. Effective cost discipline focuses on efficiency, economy and effectiveness.

Finance teams can support this by:

• Mapping exposure to energy, transport or logistics shocks.
• Reviewing procurement contracts for inflation clauses or disruption-related triggers.
• Distinguishing external inflation from internal inefficiency.
• Prioritising spend as essential, optional or deferrable.

Embedding cost discipline beyond finance – through regular monitoring and strong business partnering – is critical.

2. Re-evaluate pricing with data, scenarios and customer insight

In sustained inflation, price increases are often unavoidable, but fluctuating cost shocks complicate traditional pricing strategies.

To set the right approach, finance and commercial leaders should assess:

• Their competitors’ exposure to the same cost pressures, and their responses?
• Customer price sensitivity and their loyalty – do they have any alternatives?
• Timing and impact of previous prices.
• How quickly pricing can be revisited in response to costs.
• How will cost and price changes be communicated?

Continuous data-led pricing review helps protect margins without damaging long-term customer relationships.

3. Strengthen supply chain resilience in a disrupted world

Finance teams play a central role in strengthening supply chain resilience by:

• Mapping single-supplier or single-route dependencies.
• Stress testing supplier financial resilience.
• Identifying alternative suppliers.
• Reviewing just-in-time models.
• Assessing near- or on-shoring options.
• Reviewing inventory levels and contingency plans.

The aim is not to eliminate risk but to ensure operational continuity under sustained disruption.

From crisis management to resilience

Resilience is built through how leaders think, prepare and respond. Finance professionals who embed an anticipatory mindset, apply rigorous scenario planning and take disciplined action on costs, pricing and supply chains can help their organisations move beyond reactive crisis management toward sustained resilience.

The CIMA Business Resilience Toolkit provides guidance, tools and templates to support finance leaders navigate uncertainty and build business resilience.

Tariro Mutizwa, FCMA, CGMA

Vice-President: Africa

The Chartered Institute of Management Accountants