Tariffs and escalating trade tensions: Is your organization ready for the storm?
With Steven Orova
How do you develop needed skills quickly in a world that demands them? Business simulations are an effective solution.
Quiz compliments of our partners at 10,000 Feet, creators of Interplay
In the face of escalating trade tensions and changing tariffs, the question business leaders should be asking is not IF their business will face disruption; rather, it's when and how much disruption they WILL experience.
Take Best Buy, for instance, with over 75% of its products sourced from China and Mexico. CEO Corie Barry knows that prices and their business model will have to change; she realizes the critical role that business acumen skills will play in making sure her team will examine the tradeoffs between price changes, customer loyalty and costs. On Best Buy’s latest earnings call, Barry called the tariffs a “highly dynamic situation” with uncertainty about their “duration, timing, amount, and countries involved” and the “potential reaction of American consumers.”1
For leaders at Best Buy, having a deep understanding of the complexity of the consumer electronics supply chain, and the ripple through impact of vendors passing on additional costs to retailers, will be critical if the company hopes to weather the uncertainty of the current situation while not alienating core customers.
Unfortunately, too few leaders and professionals understand the implications of our current situation. A Harvard study found that U.S. managers averaged just 38% on a basic financial literacy test. That’s not just alarming, it’s a direct threat to business performance.
The risks are real and rising
Today’s leaders aren’t just managing sales and operations, they’re navigating complexity. Every decision carries heightened risk, from pricing strategies to resource allocation. And the consequences of poor judgment? Steep.
Recent reports in the Financial Times2, the Wall Street Journal3, and Reuters4 point to the many industries, from manufacturing to healthcare, that are facing catastrophic consequences of poor management decision-making.
Shift happens: Learning quickly to navigate constant change
"Shift happens" isn't just a clever phrase—it's reality. Markets transform overnight, technologies render established business models obsolete, and geopolitical events dramatically alter the playing field. But how do you develop needed skills quickly in a world that demands them? Business simulations are an effective solution. They compress years of learning into hours—helping leaders practice real-world decisions and see their financial and operational consequences in real time.
In the same way that recent policy shifts have compressed decision cycles with new tariff announcements, business acumen that might have taken months or years to develop now must be developed in much shorter timeframes, and simulations are a clear means of accomplishing this.
Business acumen: Great leaders manage tradeoffs, not just outcomes
Effective business leaders know that responding to tariff increases by simply raising prices might preserve short-term margins but could accelerate customer migration to alternatives. Conversely, absorbing cost increases might protect market share temporarily while eroding the capital needed for future innovation. The real skill lies in evaluating trade-offs—and making fast, informed, and financially sound decisions that serve both short- and long-term goals.
That’s the essence of business acumen.
Act now: Equip your leaders to lead, not just react
Your leaders can’t afford to “learn on the job” anymore. In today’s fast-moving environment, those without business acumen will fall behind—or take your company with them.
But those who master it? They’ll seize opportunities, outmaneuver competitors, and drive growth through uncertainty.
The time to prepare is now.
1 Fortune.com - Best Buy CEO Corie Barry offers her outlook on Trump’s ‘volatile’ trade war: ‘Tariffs at this level will result in price increases’ - March 5, 2025
2 Financial Times - Companies brace for price pressures as Trump tariffs start to bite - March 4, 2025
3 Wall Street Journal - Trade War Explodes Across World at Pace Not Seen in Decades
March 24, 2025
4 Reuters - Corporate gloom deepens as new Trump tariffs take effect
March 12, 2025
Here is how one company prepared their leaders for change:
During a recent offsite, a business division president wanted to address the lack of coordination and slow decision-making as the organization was navigating significant new turbulence in its business environment. This lack of coordination and promptness was creating missed business opportunities and wasted expense. The leader engaged the top 150 leaders in a dynamic simulation experience where they faced these real-world priorities, tensions, and challenges and had to resolve them in real time. The results were twofold: a) better collaboration across the organization and a stronger focus on key business realities and priorities, and b) increased agility in the midst of unprecedented change. This was accomplished in one day vs. waiting months, or years for these skills, alignment, and agility to happen.
The best of game-based learning in a high-impact day
Interplay has been called a “mini MBA-in-a-day” for good reason. It builds a broad understanding of the critical factors that influence success or failure in any organization. Originally created for both Apple and Microsoft, Interplay has been used by many leading organizations. Working in teams, participants develop strategy and resolve business challenges. No matter which resolutions they come up with, the Interplay experiential learning process makes clear which decisions and activities have the greatest business impact.
Co-author Steven Orova is a Senior Partner at Advantage Performance Group specializing in delivering high impact leadership development experiences, including the Interplay business acumen simulation and Decision Mojo decision skills leadership lab.
