Evaluating global risks is an invaluable part of any expansion strategy. These days, it’s not enough to read the news. To understand how your business could be impacted by future events, networks are more important than ever.
Here are our top three tips to stay ahead of the competition:
1. Know What’s Going On
The World Bank defines political risk as:
Government actions which deny or restrict the right of an investor/owner i) to use or benefit from his/her assets; or ii) which reduce the value of the firm. Political risks include war, revolutions, government seizure of property and actions to restrict the movement of profits or other revenues from within a country.
But realistically, even much smaller political changes can impact on your business. To stay informed, you can employ consulting and advisory services, like International Corporate Creations, BTR International or Think Global before you enter a new market. And, of course, there’s an abundance of open source information available.
Staying on top of news, industry standards and country advice is something we all do, but to really factor global risks into business planning, you need to know the news before it becomes news. With polls no longer being as accurate as they once were, networks are now more important than ever.
2. Build Your Networks
Building political networks requires research and effort in any market you are present. Take the time to understand how decision making works in your target market’s government. Find out who will be making the key economic decisions that will impact on your industry.
Introduce yourself to your Embassy or High Commission, get to know the Ambassador, meet the local Government Trade and Economic office, become a member of your Chamber of Commerce and get involved. Forge these connections before you enter a new market, wherever possible. Reading emails won’t help here: you need to attend events and network, network, network! Make sure the local government and your embassy are invested (not necessarily financially!) in your success.
3. Empower Your Team
Empower your staff by encouraging them to build their own networks in their particular industries (HR, Outsourcing, Finance, Sales, Security).
Six monthly meetings for the key decision makers in your office offer a structured way to stay on top of contingencies. Make the content future focussed: what can we expect in the next 6-12 month. How will each department (HR, Finance, Sales, etc) be affected and how will each department adapt?
Ensuring contingency plans are up to date should economic policy change following an election is an essential part of corporate planning. Like history, politics tends to repeat itself, so time spent planning for an election will never be wasted: you can always dust the plan off next election!