ALL POLITICS MAY BE LOCAL, BUT THE DEBATE AND RESULTING POLICIES NO LONGER ARE
Policy and political discussions impacting new, emerging and disruptive business models are no longer confined to the locality in which they occur. Rather, they have a ripple effect around the globe, setting the baseline for future discussions. One need look no further than recent legislative efforts and the evolving nature of related regulations on issues ranging from privacy to contentious content as examples of this dynamic.
IT IS NO LONGER A QUESTION OF IF, BUT WHEN GOVERNMENT WILL STEP IN
Companies must plan for the business challenges presented by heightened government scrutiny in the form of oversight, regulations, and legislation, all shaped by the views of the consuming public and the pressure that they place on their elected representatives. The more disruptive the business model or product offering, the earlier and more intense the scrutiny to be expected - and the more important the need to anticipate and proactively react to it.
As a result, companies must understand:
PROTECTING NOT ONLY REGULATORY BUT SOCIAL LICENSES TO OPERATE ARE VITAL FOR MARKET VIABILITY
Barron’s Dictionary defines “license to operate” as a, “grant of permission to undertake a trade or carry out a business activity….(by) agencies, and also by private concerns.” As businesses enter into increasingly disruptive market models, their long-term viability depends upon not only regulatory but also social licenses to operate.
As regulations, public controversies, and the economic environment become increasingly intertwined, companies have to address not only their black letter legal / regulatory obligations but also adapt to consumer expectations. Failure to take early and / or proactive steps to do so and protect a social license to operate puts the regulatory license to operate is at risk, either with explicit denial by the relevant government and / or amended laws and regulations to effectively block market entry.
ENGAGING NEW FORUMS AND FORMS OF COMMUNICATION ARE KEY TO CHANGING THE DIALOGUE
Governments can no longer be seen as an obstacle to growth. Rather, they must be approached as a partner. The corresponding dialogue should not be confrontational but conversant. Potential concerns and problems with business models and product offerings are best identified early in the process and presented for consideration and education. New forms and forums of dialogue created early with local and national governments accelerate understanding of the potential impact on associated international discussions.
Learn more about the importance of a Social License to Operate to policy and market considerations.
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