Political Positioning

Political positioning is the deployment of a firm’s political tools, such as its political reputation, government relations and public affairs professionals, political capital, campaign financing, and political clout, to put the firm in the most advantageous place at the most advantageous time to achieve the most advantageous public policy solutions to its commercial problems. It is about seeking and securing competitive political advantage over politicians and its peer opposition. Effective political positioning demands that firms mesh their commercial goals with their political surroundings. It requires firms to be sensitive to how the commercial world affects the political world, and vice versa. It requires firms to judge the prevailing political outlook as to whether it is conducive to corporate initiatives or whether the public mood is hostile to corporate proposals, making effective political positioning much more difficult, if not impossible.

Political positioning is akin to product positioning, except that it is lodged in the public domain. Just as the market requires a firm to produce quality products, price those products competitively, and stand behind those products with the full force of the company’s reputation, so too does differential political positioning demand that the firm (a) know with as much certainty as possible what it wants from the political process, (b) grasp how public policy is made, (c) have internal and external political capacities to influence that policy process in a timely manner, and (d) appreciate the political milieu so that workable intervention strategies can be formulated. This entry on political positioning discusses the importance of knowing what the firm wants, how policy is made, and the firm’s political resources and political objectives and strategy.

Knowing What the Firm Wants

Even for a firm with a sophisticated corporate political reputation, it is not always easy to translate commercial desires into concrete policy outcomes. Firms with multiple operating divisions may discover that a proposed policy change—a tax credit or tariff reduction—may benefit one corporate unit while hindering a different firm division. Or a policy option that may be favored by one set of corporate officers may be opposed by other executives. Firms need to know what they want from government because there are seldom satisfactory “do-overs” in politics. Opportunities for political intervention do not occur simply because a firm wants it to be so. As corporations quickly come to understand, the political resources of a firm, including its political reputation, are finite. That is why a company must know what it needs—with as much specificity as possible—from government. Narrowing the “ask” is a major part of ensuring favorable political positioning.

Knowing How Policy Is Made

To many firms, the making of public policy—never a straight line—remains a mysterious enigma. Often, firm officers cannot fathom why what is obvious to them is not obvious to politicians, making the political policy realm frustrating and an Alice in Wonderland black hole. Yet, whether it is understood by firms or not, the policymaking process goes forward—which is why knowing how it works is critical to political positioning.

Politically sophisticated firms often view the public policy process as a series of sequential stages: issue recognition, solution and initiatives, policy formulation, policy adoption, policy evaluation, and policy implementation. While each stage has unique characteristics, what matters for the firm is where it can best intervene in the process. As a rule of thumb, the earlier a firm intervenes—recognizes issues and formulates solutions—the greater the opportunity it has to put its stamp on policy outcomes.

If the firm does not or cannot intervene in the initiation or policy development phase, there remain other stages ripe for corporate policy input. Policy alternatives must, at some point, be adopted by government, and that means, at a minimum, that the agent of government—the legislature or regulatory institutions—must take an action. Legislatively, a firm can help draft bills and amendments, testify before congressional hearings, prepare discussion papers, join coalitions supporting a particular policy angle, launch a public advertising campaign, or engage in direct lobbying of legislators. All are valid avenues for firm input.

A cautionary note: The firm will only be able to diagnose its options if it grasps both the broad strokes and the nuances of the policy process. Adequate positioning frequently depends on perceiving and acting on what is next in that process.

Knowing the Firm’s Political Resources

Defining the corporate “ask” and placing political positioning along the axis of the “ask” should always be structured not just by a corporate wish list but also by an evaluation of a firm’s resources that are politically combat ready. Firms can possess a variety of operational resources, such as financial expertise, admired management depth, exceptional product development, and/or a motivating corporate culture. When it comes to political positioning though, a different kind of resource—political—must be added to a firm’s suite of competencies. Broadly, a firm’s political resource base (its political capacity) is lodged with how it is organized, and the investment it makes, in purely political endeavors: sorting out the impact of public policies on the firm and translating that impact into advantageous corporate lobbying.

A good first step for any firm is to make an inventory of its existing political capacity. Having a firm-sponsored political action committee, for example, is a fundamental corporate political resource. Financial contributions for political campaigns help a firm establish an identity and an access path with politicians. Money is not the only purely political tool. A firm that encourages its employees to become politically active—volunteering for campaigns, getting to know the politician personally, or writing issue letters—is zeroing in on an important part of a politician’s profession: helping that politician get reelected.

How a firm organizes and manages its public issues is a second inventory item. Companies need to build an internal formal corporate process to identify, evaluate, and take a stand on those issues likely to affect them. Companies vary as to the elaborateness of the internal structure, but the end goals are similar: analyze concerns and frame the corporate response in narratives favorable to the firm. Issue framing is neither child’s play nor a corporate afterthought. Issue-policy framing is critical to a firm’s political marketplace positioning.

The third resource centers on corporate advocacy—lobbying. Firms have come to realize that a vibrant corporate government relations lobbying function brings competitive benefits. By establishing and professionally staffing a government relations unit, firms gain the ability to monitor issues, obtain political and policy intelligence, make timely political campaign finance decisions, gauge the impact of policy framing, develop political clout, strengthen their political reputation, and implement effective political and governmental intervention strategies.

Firms can also invest in lobbying professionals who are not firm employees but are, in effect, lobbying experts for hire. These professionals bring political skill, access to politicians, and political or governmental experience usually different from that of permanent corporate staff. Employing these contract professionals helps the firm fill its coverage gaps, as the firm faces an ever-increasing reach of government into the firm’s marketplace. Contract lobbyists can show a firm who in government holds power over what the firm wants, assist the firm in formulating and clarifying what the firm wants, and present it to policymakers in such a way that chances for success are expanded.

Political positioning without a lobbying capacity is difficult if not improbable. Lobbying is the action arm of corporate positioning. If a firm ignores the investment in advocacy, it in effect cedes any hope of competitive advantage to those peers and competitors that have made the investment. It will ultimately be on the outside looking in—with its policy fate in the hands of others.

Knowing the Firm’s Political Objectives and Strategy

A firm can possess a variety of political resources integral to political positioning, such as a strong reputation, a lobbying competency, a framing ability, a decisive aptitude to clarify its wants, financial health that allows it to invest in and afford political assets, a corporate culture that supports political engagement, and a CEO and other top officers who grasp policymaking. Left alone, though, these assets will not be able to position the firm. It takes an integrating mechanism—a political strategy—to couple the individual items into a coherent political-positioning capsule.

The ultimate integration of market and nonmarket goals—its political strategy—is heavily dependent on (a) what the objectives of the firm happen to be and (b) what policy process signals it receives and interprets from the political marketplace. With regard to corporate objectives, a previous section noted the importance of a firm finalizing what it wants from government. It is useful to think about corporate objectives in concrete or generic terms or an amalgam of both. A concrete objective is the advocacy of a specific issue or policy option—for example, arguing for an identifiable tax code provision or against a certain environmental regulation. There are an almost endless series of concrete objectives that are firm centric. As examples of generic objectives, a firm can advocate change to a policy objective, defeat a proposition, strive to maintain the status quo political forces, stall a bill, delay executive branch regulatory implementation, or set the stage for corporate action in the later stages of the policy process.

A political strategy—through political positioning—helps a firm accomplish those objectives. Firms can stress a strategy based on campaign fund-raising as a way to influence politicians and the policy process. Or firms can build a grassroots organization dedicated to supporting corporate issues. Firms can also rely on long-established leadership relationships between politicians and company executives as a way to have their perspective recognized. Other firms strive to build a strong corporate political reputation to backstop their views. A firm can also emphasize a strategy of providing well-developed and thorough information on issues as a way to sway political decision makers. Or companies can form or join coalitions of like-minded interest to multiply their clout and political reach.

Strategies can also reflect process dimensions. Thus, firms can opt for a political strategy that stresses accommodations with the political environment—making issue deals, for example. Firms can also decide the opposite—concluding that their corporate needs are so crucial that a strong-arm confrontational posture is required. Or firms can adopt a political action strategy that is a combination of deal making and aggressive opposition.

Along with an objective-driven political strategy, positioning success depends on how precisely a firm evaluates its political marketplace: Are existing political conditions ripe and favorable for achieving the firm’s objectives? What is the likelihood of success, and what are the factors for success or failure—market, nonmarket, and internal? If the political marketplace is hostile to what a firm wants, can the firm modify its objectives to better position itself politically? Reading the “political tea leaves” is not an exact science, but it is a very necessary task. It becomes, ultimately, a political judgment call bounded by a firm’s experience, strategy selection, and political capacity investment.

Conclusion

Politically positioning a firm is not a back-of-cocktail-napkin endeavor. Putting the firm at the right place at the right time requires the right kind of political strategy and the right kind of commitment on the part of the firm to deploy the right measure of its resources.