Political trends

Trump shows why political trends belong in strategic scenarios

Eric Garland Intelligence Analysis 0 Comments

Political trends, unless you do business in an unstable environment such as Central Asia or South America, are frequently considered outside the purview of most business strategists. Moreover, when those strategists make scenarios to guide the decisions of executives, they might include economic and tech trends, while eschewing the rest.

Well, after this Trump thing, I hope strategic intelligence professionals got the message: political trends matter.

Ignoring the “P” in STEEP trends – the perennial mistake

Futurists employ the mnemonic device “STEEP” to organize the various trends to research and analyze when making strategic scenarios. It stands for:

  • Social
  • Technological
  • Economic
  • Ecological
  • Political

Most business forecasts these days rely heavily on the extrapolation of economic and tech trends. Many futurists live and die by tech and social trends, seeking insight into future consumer tastes or evolved lifestyles. If you’re in the energy or manufacturing game, you better have a good source of ecological trend data to know how water quality, air pollution, and climate change could impact what’s next.

Whither the poor political trends, roundly and dangerously ignored! Well, you’re paying attention now, right? A US presidential candidate who thinks NATO is a dumb luxury and who wants to wall America off from one of its top trading partners? Bajillions of pounds sterling worth of business and government trade agreements tossed up in the air with nary a plan? Those are the kinds of developments that have global, strategic-level implications on a gigantic swath of businesses. And yet our organizational foresight on this topic is extremely poor.

What can we do to give executives options and time to deal with emerging shifts of this nature?

Why we tend to avoid political analysis in business

In Western management, politics is a topic that is frequently left undiscussed in any rational formal way. Executives tend to think of these as personal matters, outside the purview of business responsibilities. There are good reasons for this.

First, the governments of the OECD nations have been very stable for decades. OK, Italy, not looking at you right now, but for almost all the others, the main form of government and the political parties have changed little since the mid-20th century.

The U.S. has had the same two-party system and very few radical policy shifts, foreign or domestic. (Dear U.S. partisans: you’re hyperventilating if you think Reagan or Obama were actual radicals, for reasons I will show.) With the exception of the move from the gold standard in the 1970s, or the military adventures after 9/11, most political moves have done little to radically change business the way that it had in the first half of the century. America used to have labor union movements and nationalization of businesses, price controls on a wide variety of goods, and now the country has mostly laissez-faire. It barely even invokes antitrust laws, despite the obvious potential for their use.

France hasn’t formed a new system of government since de Gaulle established the Fifth Republic. You can see major differences between Mitterand’s socialism and Sarkozy’s gaulliste tendencies – but the same statist approach remains from the days of the good Général.

Japan? Same system since post-War. Germany? Aside from reunification and a passion for the European Union, much the same policies since the 1950s.

This stability has been the foundation for much of our economic growth. Trading partners and investors have been able to rely on stable forms of government, policies on duties and tarriffs, the rule of law in disputes, and predictable regulations that let them reach new markets. Therefore, we have had the luxury of considering politics a personal matter.

In Colombia, Venezuela, Burma, and Uzbekistan, that is very much not the case, as any of their business executives will tell you. And it might not be in the OECD nations very much longer.

How to make sure you properly include the “P” in STEEP

Brexit has been a shock to the system, and industries from finance to pharmaceuticals are wondering how deep the disruption could be. The increasing vigor from once-marginalized parties such as France’s Front National is causing worry in politicians and business executives alike. And while its probability is vanishingly small, a potential Trump Administration would be disruptive in ways too numerable to explore here. None of these movements are unpredictable surprises; all have their roots in social and economic trends that have been developing rapidly in the last thirty years, particularly with regards to the weakening of the social contract in an age of globalization.

So how can you make sure trends of these sort are researched, tracked, and incorporated into your business strategies?

1. Research, track, and incorporate political trends in your strategic plans

That is a seriously dirty trick, I know. But as I have mentioned in my books on futures studies, any executive can become a better analyst of strategic trends by simply opening a file folder (paper or digital), stuffing it with the occasional story that indicates change, and taking it out to discuss with colleagues while making future plans. It really is that simple.

Instead of considering reading political material as a personal distraction, consider it due diligence and capture it in your organization’s knowledge management. When you have a project that might be impacted by government policy, take out file folder, open, and discuss. A few minutes a week will open you and your colleagues eyes just that much wider to the potential futures unleashed by political movements.

2. Engage country risk assessment professionals

There are professionals with international affairs backgrounds who sell risk assessment services. Some are former diplomatic staff with local contacts, others mix primary (HUMINT) with secondary (media) sources from a distance to produce scenarios about various geopolitical situations.

While the defense and energy sectors use such services frequently, as the supply chain and customer base of your business diversifies, this type of analysis becomes much less optional and more critical to your strategic goals.

3. Work with futurists and make sure to use all of STEEP

Futurist methodology is based on the analysis of multiple long-range trends to create strategic scenarios. Experts in futures studies can help make your existing plans more robust by enriching them with alternative future scenarios that include the potential disruptions including those from political trends. These techniques will help track trends such as British nationalism, the end of the Cuban regime, the death of Uzbekistan’s dictator, and other, as well as to ask in an organized way what these trends imply for regional stability, the geopolitical balance, and our business interests overall.

Nothing really prepares you for the meteoric rise of a reality TV host suddenly abandoning NATO commitments and the Geneva Convention, but these techniques will at least let you get a head start.