Thinking Strategically about PolicyFollow @PwC
What is a policy and why is it important? Policies - for the purposes of this blog - are principles or plans that define the approach that a government wants to pursue to achieve a desired outcome. Policies are brought to life through legislation, regulations, guidelines, industry self regulation, or some other formalised approach directing how the policy objective will be met. These are the rules that industry must live by.
Companies around the world are dealing with an increasingly complex and rapidly changing policy environment. Some of the changes are driven by politics, such as the growing isolationist policies in Europe and the US withdrawal from the Paris climate accord. Others are driven by a changing business environment, like the global financial regulatory reforms enacted in the wake of the last financial crisis. Technological innovation will almost certainly spur more regulatory change.. Adding to the complexity, there is often little consistency in how policies evolve and are implemented in different jurisdictions.
PwC’s 20th CEO Survey found that 80% of the CEOs interviewed see over-regulation as one of the top threats to their organization’s growth objectives. What can CEOs do? To start, they can take a more proactive and strategic approach to addressing emerging policies before they are formalized through legislation and regulation. Emerging technology stakeholders, for instance, can seize the opportunity to consider how key innovations designed to benefit consumers and society might also pose unintended risks - and how the private sector might address those challenges in ways that better anticipates regulators’ likely concerns.
Companies that successfully navigate the policy maze will be those that have positioned themselves to spot trends in the changing landscape. Monitoring, analysing and planning for policy and regulatory issues combined with taking a coordinated approach across jurisdictions will allow companies to best anticipate and influence the outcome. Whether it is deciding what markets are the best opportunities for expansion, how to design products for the future, or what types of companies to acquire, it is critical for companies to integrate a strategic view of potential policy and regulatory impact into the analysis.
Every major global organisation has a government relations or public policy team. Unfortunately, many focus myopically on interacting with governmental bodies in their local markets. The companies that will most likely succeed in the rapidly changing policy environment will be those that effectively integrate a policy perspective into their strategic business planning process and successfully execute that strategy.
David leads PwC's U.S. Risk and Regulatory consulting business, advising his clients on the risks and regulatory issues impacting their business, strategy and operations.