Public Policy is a Team Sport
Any sufficiently complex organisation needs a team to deal with its public policy challenges. The idea that you can hire one former politician who will take care of ”political problems” sometimes surfaces in the debate, but is always deluded. The reality is that public policy – like any organisational function – requires a team.
Government affairs, public policy, lobbying — what you want to do here is to build a capability for your organisation to interact with the political and social sphere in a more strategic way. That requires an investment – and if you find that the company or organisation that hired you is not prepared to see this as an investment, our best advice is to walk – fast.
An organisation that treats its policy function as a mitigation measure or a defensive ploy is bound to fail in the long run – in one of two ways. The first is that the organisation will find itself under attack not just for how it acts, but also how it engages. Politicians and other stakeholders have become almost immune to spin, and they recognise a public policy shop that has been set up just to do that – just to spin.
Once you have made sure you have the mandate to help build a team, the next question is how you do that – and where.
Thinking in capabilities
Now, building a team is a tricky thing – it is very different than running a team or even managing a team.
When you manage a team you need to think about objectives and key results – you need to have a plan and you need to ensure that you show results that are useful and helpful to the rest of the organisation.
When you build a team, your core concerns is getting to a stage where you can transition into managing, and the focus of your efforts needs to be something very different: capabilities.
A team can be modeled in many different ways. One useful way of thinking of a team that you are building is not in terms of what it can achieve, its objectives, but in terms of its capabilities. What is your team able to do routinely and well?
A capability is something that can be deployed in the organisation’s environment to some effect, that helps the company achieve its objectives and strengthens it strategic position.
Building a team can be thought of as scaling a capability stack or tree – much like you would in any modern strategy game. In Civilisation you build capacity in order to support the strategy of the player’s choice – and the way you do this is through technology trees, economy trees — models of economies and technological know how that moves from the primitive to the more advanced. Every step in a tree or a stack builds on the previous one, and the key is to make sure that you have the right capabilities in place for the strategy you want to execute.
Capabilities are logistics for strategy, and as German general von Moltke noted – amateurs discuss strategy and professionals discuss logistics. Von Moltke translated this into an understanding of how military plans can be deduced from and planned with railroads. He is both said to have deduced the French warplan through a study of their railroads, and to have, himself, never made an important miltary decision without consulting railway timetables.
The railways offered a capability of transport that was previously not available in war and each new capability unlocks new strategic landscapes that can be explored by the thoughtful leader – and so focusing on building capabilities, even on innovating in capabilities, should be a much heavier focus than it currently is in most organisations. Enamored with the focus on strategy, planning, objectives and key results (the so-called OKRs that dominate the discussion in Silicon Valley) capabilities have been almost completely lost from sight.
That is a grave mistake. Anyone building an organisation or a team not focusing on what that team can do routinely and well is likely to fail. To build a strategy without advancing capability is not just impossible – it consumes all the resources that could have been use to change the game with new capabilities, it is a self-defeating way of working.
*
When you build a policy team the core capabilities that you need to take inventory of and build out are, at a minimum, the following:
* The capability to project political power
* The capability to gather intelligence
* The capability to access networks of decision making.
* The capability to inform organisational decisions
These capabilities are closely entwined. You will not be able to project any political power without having the right intelligence and the right networks. Your networks will falter if you do not know the landscape, and lack any political power. Your intelligence depends on your political presence and your networks. All of these matter little if you cannot inform organisational decisions, and do not assume that this is something that just happens.
A word about these different capabilities will help explain this.
Projecting political power
When we speak of projecting political power, it is important to defuse, immediately, the suspicion that there is something dodgy going on. Every actor in a society has some political power broadly defined. Citizens, NGOs, companies, organisations, unions — everyone has political power in the sense that they can affect the political process.
Such power can be entirely legitimate and wielded in ways that help the social good. The word power is difficult, since its connotations sometimes lead people to think that what is at work here is the exercise of undue influence or illegitimate power, so it is worth pointing out that even companies have some legitimate political power in that they have unique knowledge about their markets, business and technologies that can be helpful to society as a whole when taken into account.
The basic exchange at the heart of all legitimate government affairs is knowledge in exchange for influence. The exchange rate will vary – national champions often get a lot more influence for their knowledge than foreign companies, to take one example – but this exchange is a legitimate and often positive transaction that improves society as a whole.
Your organisation’s capability to engage in this exchange coupled with advocacy on behalf of that position is what we refer to when we speak of projecting political power.
This capability scales from informing over influencing to shaping to a final stage where you can both create and initiate legislation as well as stop legislation or regulation that you think is harmful.
You inform legislation when you can share information about your market, business and technology and know that it is at least read, even if no action is taken on the basis of the information.
You influence legislation when you can exchange information and knowledge in such a way that action is taken to change or adapt legislation to the points that you are making.
You shape legislation where the exchange of knowledge shifts the form, structure and scope of the legislation that you are working on.
Creating and stopping legislation is somewhat self-explanatory – and very rare. There are only a few cases where companies can argue that they have been instrumental in stopping a piece of legislation once it is moving. Calling for or creating legislation is easier, but not an exact process either — you can call for an issue, industry or competitor to be regulated, but you will not always get what you are asking for.
It is worthwhile here to make an important distinction between stopping legislation that has been set in motion – and stopping legislation at early stages. A core capability of a well-built out policy team is the ability to sense regulatory intent and shape it advantageously – long before it even becomes a greenbook or first review.
There is a wealth of bad books that cite Sun Zi, the legendary Chinese general and author of the Art of War, but one of the things that expresses this principle well is when Zi discusses what the highest art of war is — and notes that it is not fighting the enemy, but thwarting the enemy’s plans:
“Hence to fight and conquer in all your battles is not supreme excellence; supreme excellence consists in breaking the enemy’s resistance without fighting[…]Thus the highest form of generalship is to balk the enemy’s plans […]
If you end up in a large-scale legislative fight, trying to stop legislation, you have already lost. If you sense the legislative intent and where the political will is trending and meet it, change it and shape it before it hits you, you have in some sense developed the perhaps finest capability a policy team can wield.
Intelligence gathering
Intelligence gathering seems like an obvious capability to develop, but it is surprising how many still rely on word-of-mouth and unstructured ways of thinking about intelligence. In a small, growing team you often hear things through the grapevine, and you regularly miss things. This creates a huge problem in prioritisation and planning, as well as in thinking ahead.
Structured intelligence gathering starts from an idea of, as Richard Rumelt puts it, what is going on here. We have touched on that question earlier, and it remains one of the core centres of gravity in any strategic work. Here it serves the purpose of determining what it is you are looking for, and what kinds of intelligence you value.
Your organisation’s strengths, weaknesses, roadmaps and competitors all factor into this, and you need to understand what the landscape you are searching looks like. A good exercise here is to figure 5-10 pieces of intelligence that you would really like to have and to examine why you believe that they would be valuable to you — what would you do with them?
We live in a world that is characterised by what Nobel laureate Herbert Simon called “information wealth” – a growing and disparate flow of information that can easily overwhelm you. This, he noted, requires that we allocate attention efficiently – so what you want is intelligence that you can operationalise in different ways.
You could spend all your day going over industry news and reading trade magazines, Twitter feeds and following different other open sources, but this will lead you nowhere – a targeted intelligence approach focusing on what is operationally important is a key capability to develop.
The stages here are possible to model in many ways – when we speak of a capability tree it is important to note that these capability trees can be modeled in a few different ways, and we include several such models in this book to give you examples; ideally you want to design your organisations in cooperation with the organisation’s leadership and your team to ensure that it reflects the industry and situation you are in – but one way to do it is to simple use time as the scaling factor.
The first level here is being able to sense immediate threats and challenges in media. Is your organisation under attack or being criticised? Are you being called out for something that you have done or omitted to do? This sounds obvious, but in the heterogeneous media environments we operate in we see many older companies completely missing Twitter storms before they translate into violent outrage in more traditional media outlets. That is a missed opportunity to address concerns early, and can lead to not just reputational harm, but also be the inciting incident that leads to legislation.
You may, quite reasonably, object that no one can spot all the things that are happening in the information blizzard we are in, and that this alone is an impossible level to reach. It could be, but one has to decide on a level of resolution here — being able to pick up things across the major social media, newspapers and other discussions is not impossible. Covering everything is – but there are several reasonable and achievable levels of resolution here.
There are also many tools that monitor media for you, and allow you to set up alerts and early warnings.
The second level is getting intelligence on political initiatives and ideas that matter, in key markets, for your organisation at least 6 months before they hit full speed. The limitation here to key markets is an important point: you cannot track all countries, and should not even try at this stage. The idea is to ensure that your key markets are covered and that you have a good understanding of what is happening across them.
Such intelligence is harder to automate, and often you need consultancies or people on the ground who are well networked to ensure that the right information reaches you. If the source in the first level is written media, the sources here are often conversations and events where you pick up human intelligence from key actors in your industry, government and academia. The golden rule of human intelligence should be applied here: three independent sources to confirm hard intelligence where possible — one mistake we have often seen is overly relying on a single source for intelligence on what is happening where that source is simply craving attention or is misinformed.
The third level is intelligence about competitors, also on a 6 month horizon. Competitive policy intelligence is a little bit different than competitive intelligence — where competitive intelligence is looking at the kinds of products, pricing and business models that competitors are developing, competitive policy intelligence is looking at what the policy playbook of competitors could or should be. What are their policy objectives and how are they approaching them? It is not rare for an incumbent to seek regulation for new entrants into an industry, for example, and knowing if and how they are doing this is important to ensure that you can both meet that argument up front and defuse it. There is an interesting dynamic here, worth covering more in depth, about incumbent plays in public policy.
The fourth level is something that is often referred to as horizon scanning. It should be a part of a company’s strategic thinking generally, and the sources vary from long range scenario work to academic sources and trends. Academic ideas translate into legislation over a long period of time, but in a noisy way — some of them just fall by the wayside. But regularly scanning academic publishing across core areas of interest is good practice – and also allows you to understand which academics to track over time.
Listening to academics
There are interesting examples in tech policy of academics who have successfully translated their thinking into policy. An example worth studying is the idea of a “right to be forgotten” as launched broadly by Viktor Mayer Schönberger. The idea had been around, in various guises, but Mayer Schönberger successfully turned it into a regulatory idea, and while it is hard to track causality it is no idle guess that his book, his public talks and his engagement in this issue had an impact on the European Court of Justice in the well-known Costeja-case that articulated this right as law under the European Data Protection directive 95/46/EC. Mayer Schönberger went on to discuss data rights and is informing the data debate in many interesting ways now — and what he says should of course be a part of what any serious company’s analysis of the future. Whether he succeeds again or not.
A few key learnings from this is to try to spot academics that can put ideas into clear and succinct form, who present well and often and who are networked with journalists and other thought leaders.
The fourth level also looks at really long trends and tries to find patterns that are not obvious in the day to day reporting or discussion. Trends like demographics and energy consumption start to matter in the longer term perspective and should be at least taken into account when looking at where your organisation is going.
This is a sketch of how intelligence gathering can be modeled as a capability, but it gives you a general idea. There will be variations, and they will depend on things like:
Your industry’s pace. Some industries move slower and have longer lead times. If you are in forestry or semiconductors the intelligence gathering you look at will different than if you are in fashion or consumer services.
The intensity of the political cycle. Early in an administration or new government there is more space for long term thinking and this is a point where you can both lay foundations and project political power as well as gain insights into what the long term goals of the political leadership are.
General uncertainty. Sometimes uncertainty on an issue – or in general – will be so great that it will be difficult to see beyond 6 months, and efforts may be directed towards just trying to figure out the possible rather than nailing the probable developments you are facing — something classical Shell-style scenario planning is well set up to do.
Network access is a measure of your embeddedness in the networks that make the decisions that impact your organisation. As a capability it depends on your ability to form relationships with the people who inform, influence and make those decisions. Relationship building is sometimes cast as this slightly underhanded and devious thing where favors are being exchanged and old boy’s networks really rule the world, but in reality it is really about making sure you know the right people in the right ways.
Network access
Building relationships is hard, and it is not possible to scale well. You cannot and should not want to automate relationships, and the relationships you build should be robust. There is an interesting dynamic in public policy where most relationships will last over different situations and this requires some thinking.
Relationships are, hopefully and if you do it right, longer than both political mandates and employment. That means that you will often have relationships that shift in nature: you shift employer from X to Y or a political analyst suddenly sees her party come into power after an election. The best relationships are professional friendships that are not affected by those changes, and you should actually strive for building those.
We say this because there is sometimes a sense that political or policy relationships should be purely instrumental and transactional – you scratch my back and I will scratch yours – but this is a naive way to think about relationships, and frankly also a rather silly way to live your professional life.
A good relationship is built on mutual respect for the roles the parties play, the value each brings to the table and the long term game you are both engaged in. A professional friendship is one in which you establish boundaries and check for legitimacy occasionally and openly – a relationship that builds on the idea that there is good value to get from collaborating across a number of different fields.
That is the ideal. You will also run across people who have integrated the caricature of a political relationship as cynical, transactional and instrumental – who openly ask for favors and seek their advantages for themselves. There is great variation in humanity – but that should, if you are approaching your work in the right way, be the exceptions. Most politicians and policy experts we have met have been looking out for the public good, and we have found political cynicism to be a tiring and uninteresting defense mechanism in people who want to project the appearance of weary wisdom.
That is a long way of saying that you should approach relationships carefully and with a kantian focus – treat everyone you meet as an end in themselves and not a means to get to an end. Really? Really. Let’s be honest: a lot of the joy you will get from your professional life will be the interactions you have with other people – so make them count.
That’s our little lecture on kantian relationship management. Now, let’s get into the details.
The first level of network capability is to be able to identify who does what in your key markets on your key issues. This mapping exercise takes time and it will have to be updated regularly, but without it your will not be able to make any progress at all.
Once you have mapped your stakeholders – a horrid word, but here we just take it to mean people who are engaged in the issues you care about – you need to also understand what role they are playing; are they the decision makers, the influencers or those that inform a decision? All are, as we have highlighted earlier, important to understand and map out – but getting their roles right is also important, since the relationships we will seek are different for different roles.
The second level here is establishing relationships with your stakeholders and introducing the point of contact that you believe is best for your organisation. This point of contact should be carefully chosen across a number of different dimensions:
Time. Is it likely that the relationship will last and that your point of contact has the endurance to keep it up? This is important when you are trying to build relationships between executives and decision makers, but also where you are bringing in technical or industry expertise.
Mutual value. Is it likely that this relationship is a plus sum game for both of the parties – will they both gain something from it? If you are building a relationship between an expert in your organisation and an expert in government, can they reinforce each other in their careers and their ambitions?
Growth. Can this relationship grow in a way that is sustainable over time, and will it hold across different situations?
What you are building now is a network between the organisation and different stakeholders. Now it is time to start looking at what the network can do, and developing more and more advanced network capabilities. This is the third level here – enabling the network to do things.
Timely access to decision makers. Can you reach the right people in time across your key markets?
Can you project the different levels of political power across the network? Inform, influence, shape, intiatite or inhibit regulatory or policy proposals across it? That is – does the network give you the infrastructure you need for projecting political power? This also highlights that there is no way that you can project any political power without a network, and you are unlikely to be able to build a network if you have nothing to offer in terms of power, so these two capabilities are interdependent.
Does the network provide you with intelligence across the different time horizons? Again, we see how the network is intertwined with other capabilities. In many ways, the network is the fundamental component in our capability tree – it builds the others and is built on them (one could argue that this makes the idea of a “tree” as the right model a bit dubious, but we will stick with it for now).
The fourth level of network capability is the capability to host and build a network. Successful companies acquire a significant convening power, the ability to convene an industry or even a national network across different issues. Used in the right way such networks turn your organisation – for better or worth – into a systemic actor in their field.
Let’s take an example. Some of the big tech companies have invested heavily in information security and against ads fraud and convened the industry and regulatory authorities around these issues. Why? Wouldn’t it be easier to just use your own security and your own anti-fraud technologies to gain a competitive advantage?
An interesting thing happens as a company grows in influence, and that is that it increasingly needs to shift the focus on competitive advantage to a focus on ecosystem health. That means that the company has become a systemic actor and now needs to not just convene the industry, but make serious contributions to keep the overall market working.
Such network power is rarely used well. Companies that have grown to that point usually forget that they have an ecosystem role to play, and so do not engage as they should in international institutions, standards organisations and corporate social responsibility actions. This is generally speaking a lost opportunity to build even more robust network.
Microsoft 3.0 – a case study in convening power
Microsoft is one of the few companies that have grokked this and really understand how to play an ecosystem role. Under Brad Smith, they have moved away from an aggressively apolitical Microsoft (ver 1.0) and a highly competitive Microsoft (ver 2.0) to an actor that is integrating itself into the diplomatic network, almost assuming the shape and organisation of a small country’s state department – with a UN-representation and presence on the international stage at the right forums and with an industry message.
This is an impressive evolution, but it has taken 30 years for the company to get this right. And some really good leadership.
Trusted advisor
The last capability that we are outlining here is one where the policy team advises the company on strategy and product development. This is the one capability that is not primarily external, and it may seem strange to include such an obvious thing in the foundational capabilities that an organisation has to develop, but our experience is that a policy team that does not spend significant time in building a capacity to project political power, share intelligence and build networks internally is bound to fail.
And this is really the core thing: what you need to do is to build out exactly the same capabilities internally as you build externally. If you do not, you are likely to end up in a world where you become Cassandra: with full knowledge of the horrors to come but zero internal audience for your work.
When you build a team, this is a core task to get right.
Team structure
Up until now we have only spoken about capabilities. We should also say a few words about how to structure a team practically. What are the optimal team structures? Are there specific structures that work well and tend to be replicated or is every industry unique?
For at least large, multinational companies there are certain commonalties that can be worth to think about – recognizing that every industry has its own specifics. So let’s look at a simple, basic structure and see what we can make of it.
*
We will use a US company in this example, but make a few comments about the difference between US, European and Asian companies at the end of the chapter. A US company usually has its headquarter somewhere in the US, and then their government affairs team is more often than not led out of Washington DC. The global lead may or may not sit in that office – and we would probably recommend that they do not sit in that office but closer to the leadership of the company, as not to end up being far to DC-centric (this is a general risk for large companies that accrue a large part of their leadership in say London or DC, they tend to overestimate the importance of what is going on there and underestimate the importance of the rest of the world in a way that is detrimental to long term success).
The US team is then often built to mirror the client constituencies: a states team, a federal team divided into at least administration with agencies and congress, and possibly also an international team dealing with all of the international actors in DC – we will come back to the set up of this ”international” team later.
The idea to mirror the environment is common, and reflects that there has been significant specialization over the years in DC government affairs, and some people are excellent operators on the hill, but are not as experienced in working with the administration and presidency.
Few, if any, teams have dedicated government affairs teams working with courts – and this is interesting. Part of it is of course the independence of the courts, but the underlying problem motivating public policy – the asymmetrically distributed knowledge – is true also for courts, and there should be some utility in figuring out how to work with a middle man to ensure that information reach the courts about what companies do and know. The production amicus briefs is one possible path, another is working with law schools and continuing legal education.
The congressional team is sometimes divided up in democrat and republican, depending on the size of the office, and again that makes sense – but presents an interesting conundrum; in a town that revolves around politics and complex loyalties – how do you ensure that your people have the degrees of freedom they need to stay connected to the networks they own while still making your points forcefully enough? This problem is not unique for DC, but it acquires a special poignancy in an environment where the ”hired guns”-identity is more common than in other parts of the world.
A more general observation is that really good political operators need the freedom to retain a separate identity that allows them to build relationships that last beyond employers – something that needs to be navigated carefully.
Building a team for states is really difficult, first because there is such a large number of them – and every state can generate some level of challenge to a company or an organization – and present significant opportunities as well. One recurring model is to group the states into blocks and then monitor them with consultants that are good at scanning the blizzard of state-level legislative proposals. For an American company, the home state will need extra attention.
For a US-team it is also sometimes a great benefit to have a team that mirrors some of the foreign affairs functions – interacting with the many embassies and international organizations that are headquartered in DC. This team will then have to be integrated tightly with the other international teams, often providing back channels and other kinds of intelligence – as well as a great opportunities to prepare for international visits from executives.
An international team may also take on international organizations like the G7 and G20, OECD, ICC, UN and other organizations in the international geopolitical space.
*
In Europe, it is common for US companies to have their headquarters outside of Brussels – and this has led to a situation in which many heads of Europe are not located in Brussels. But it is equally common to place the head of European government affairs in Brussels – and more often than not the instinct of a US company will be to draw the analogy between Brussels as the DC of Europe – something that risks severely underestimating the importance of the member states.
Brussels is not DC, to state the obvious, and the European political system is not a federal one – but a curious reversal of a federal system, in what happens in the member state capitals determines what happens in Brussels to a large degree.
This in turn means that when structuring a European team it is important to think about how you will be able to participate in the European process — tracking what happens in Berlin and Paris, informing the local political debate, is almost always an important component of that process, and the long term outcomes depend on the undervalued work of the European Council.
This means that it actually makes sense to have a head of Europe outside of Brussels, coordinating the work in Brussels and the member states. Those companies that choose the wider regionalization and work with EMEA need to do so, as what happens in Africa and the Middle East hardly has any material connection to what happens in Brussels, or even Europe at large.
What this means is that you end up with a team that at a minimum should be present in Berlin, Paris and Brussels – that is the minimum serious staffing of Europe. After that you can add someone in the central easter European block – probably in Warsaw – and someone in the Southern Europe (Spain, Italy and Greece are the key countries, with Portugal and Malta as nice to have). The Nordics, Ireland and the Netherlands are similar enough that you can group them as one – noting that Ireland is often both the European headquarters of US companies and a little bit different from the rest (lower levels of urbanization, different local politics, catholic). Some countries choose the Netherlands instead – but the region as a whole still makes sense.
The Brussels team can be organized after core subjects or the institutions – both work, but the institutional arrangement – parliament, council and commission – is increasingly gaining ground.
*
If we move to the rest of EMEA – Africa, Russia, Turkey and the Middle East – often including Israel – the structures are often sadly neglected. A lot of companies spend their attention and resources on the current markets, ignoring fast growing markets in other parts of the world – this is also true of APAC – and the result is all too often a patchy coverage of fast-growing and promising markets. A minimum staffing here requires covering South Africa and Nigeria – but that is often far too light a presence.
In the Middle East most companies prefer to start in Dubai, and then maybe expand into Egypt and, eventually, think about Saudi Arabia.
Conclusion
To sum up, then. The work of building a team starts with figuring out what capabilities you have, need and how you will approach building them. Ideally you build a capability tree – or several – and examine them to make sure that you get the right things in place in the right order.
A word about resources. As you will see in the capability tree that we have sketched out below there are two inverse triangles on each side of the tree. They represent headcount and budget. You can only get new capabilities by either deploying headcount or spending budget. The right mix of these is never easy, but our experience is that most teams err on the side of buying capabilities rather than building capability – and shift to late from budget to headcount.
The advantages of headcount is that you build internal knowledge and experience that can then really be used when needed, and grow. There is a compound interest on headcount that you do not get even from good consultants.
The Craft Book 