Rethinking Strategy in a Hyperpolitical World

The line between business and politics is increasingly blurry. Every corporate decision is now scrutinized under a public lens, as customers, the government, and the general public debate and dissect the political leanings of a leader or firm. The result? Businesses blacklisted and boycotted. Revenue reduced and brand reputation damaged. Employees and CEOs fired. The risks of mixing business with politics seem insurmountable, and yet, remain inevitable. To better understand today’s intense, political landscape, I caught up with Martin Reeves, a uthor, speaker, and adviser on strategy and innovation . In late 2022, Reeves and his coauthor, Roger L. Martin, published “Strategy in a Hyperpolitical World,” which examined how creating strategy in such an environment requires organizations to integrate social risk into all their decisions. I wanted to know: what’s changed since then—and what principles have remained the same? What advice does he have for business leaders today? An edited version of our email conversation is below. Reeves and Martin’s 2022 article appears in HBR’s 10 Must Reads on Strategy, Updated and Expanded. It has been over three years since “Strategy in a Hyperpolitical World” was first published. In the article’s conclusion, you stated that, “The intersection of politics and business will become more fraught” in the future. How has this prediction been borne out? Is it still true that “almost everything about business today is political”? Unfortunately, I think that prediction has held. The intersection of politics and business was already fraught in 2022, with leaders being forced to consider their stance and response to several “beyond-business” issues, such as social polarization, reproductive rights, and Russia’s invasion of Ukraine. This list has only grown longer, with rising conflict in the Middle East, intensified rivalry with China, threats to civil liberties, retreat from a global consensus on sustainability issues, and the looming threat of AI to employment. These issues are not limited to social controversies requiring carefully worded position statements; they increasingly have direct and material impact for business, in the form of tariffs, export or import bans, or visa restrictions impeding access to talent. Gone are the days where one could reasonably assume that politics would generally align with business interests, social and political factors could be considered as constants in business strategy, and narrow business considerations like products, customers, finances, and investors were the only business of business. In other words: politics, geopolitics, and ethics have become inescapable aspects of business strategy. What are the current risks of a company publicly taking a political position? How has this calculus changed? And when is it worth it? A few years ago, I helped facilitate some discussions among CEOs about when leaders should take a stance on social issues. The question was prompted in large part by their younger employees’ demands for companies to take a stand on a host of matters. The main thrust of the conversation was how to choose which issues to take a stance on while considering leaders’ beliefs, their competence on the issues, and the relevance of the issue to their businesses. This now seems somewhat naive, as it neglects the risks and limitations of taking a stance, which have since become quite evident. We now know that leaders taking a personal stance on a divisive issue can reveal a lack of organizational consensus, resulting in internal polarization and fracture. We know that taking a stance can easily alienate customers and undermine sales—as it did with Budweiser’s 2023 promotion that featured a transgender influencer—and also raise expectations among proponents of an issue for further action, which companies may be unable to meet. We know that taking such a stance too hastily, and later changing it when circumstances shift, can undermine trust. We know that taking a public stance on a controversial issue can increase political vulnerability and impose real costs on a business, like what happened with Disney’s public tax credit after its public opposition to Florida’s 2022 Parental Rights in Education law. Taking a public stance on a social or political issue today is not something which leaders should undertake lightly without deep consideration. That said, there are circumstances where taking active measures makes sense. If a business is unavoidably entangled with a political issue in ways that influence its current business or future prospects, it may have no choice but to engage with politics, especially if they hold some sway. For example, when exports of Nvidia’s GPUs to China were banned in 2022, the company responded not with strident public statements but by quietly modifying its products to fall outside the restrictions, thus preserving sales. Would you change anything about the five actions you outlined for leaders in implementing the best strategic choices in a hyperpolitical world? The five actions are: Develop robust principles to guide strategic choices Address ethical issues early Engage with and beyond the industry to shape the context Consistently communicate and implement their choices Learn from mistakes to make better choices in the future Roger L. Martin and I formulated these principles to help companies deeply consider when and how to take a stance, so that they can avoid the costs of unnecessary entanglement and increase their effectiveness when a stance is taken. Reading them in the light of all the experience we’ve had politics and business since 2022, they still seem relevant to me. Principles can help navigate specific situations which cannot be reasonably anticipated and can crystallize and unfold very rapidly. Addressing ethical and political issues early, before they have become inflamed controversies, allows for more reflection and a greater ability to influence. Engaging with others to influence issues which are beyond the power of individual companies seems realistic for many political and social issues. Inconsistency in positions and communications by thinking through things in advance is an avoidable own goal. And learning from inevitable missteps in the new and unpredictable disciple of strategy and politics seems sensible. In the last few years, companies have bolstered their talent and processes for political analysis, but we are still in the learning phase of how to best weave politics into strategy. I would have one major addition, however. We are arguably in a unique phase of history when the basic social and political conditions upon which business as a whole depends—social order, peace, the rule of law, the credibility of science, and the like—are under threat. There is a case for business to collectively take action to protect these foundations in its own interest. Business does not have the democratic legitimacy to make political choices on behalf of society; but companies could do more to support democratic institutions like freedom of the press and civic dialogue, as exemplified by many companies like Spotify, who provide time off to vote, support volunteering activities, or create information hubs to support civic engagement. How can a leader create or enact strategy when their political beliefs don’t correspond with the political reality? How should leaders handle competing political interests when politics come head-to-head with their organization’s strategy? There will always be shifting tensions between the needs of a business, political currents, and individual beliefs. One of the main jobs of a CEO is to ensure that a business stays aligned enough with its social environment to unlock long-term prosperity. This inevitably involves pragmatism, flexibility, and learning, since new situations constantly arise and perfect alignment at all three levels (society, company, and individual) is unattainable. Some of the important prerequisites to dynamically navigating contradictions and tensions are actually reflected in the five actions suggested in our article. In a fast-moving political environment, refresh your understanding of facts and perceptions often. Ultimately, is it possible to truly keep business and politics separate in our individual work lives? Can the two live in harmony? No, it’s not possible to separate business and politics. Like it or not, business is political, including at an individual level. To minimize this tension, companies should enable people with differing points of view to interact and collaborate respectively and productively through effective policies. One way of doing this is to create and enact norms for respectful interaction. Recent research shows that there is greater mutual respect between individuals with differing political beliefs if they interact and are aware of having something in common. That is, polarization is reduced by knowing more about another person than their headline stance on a single issue. Therefore, opportunities for employees to interact on issues which are neither business tasks nor controversial issues, such as activity clubs, can be powerful in fostering respectful interaction and mutual knowledge. Martin Reeves is the coauthor of the article “Strategy in a Hyperpolitical World” with Roger L. Martin, which appears in HBR’s 10 Must Reads on Strategy, Updated and Expanded (Harvard Business Review Press, 2025). Buy It

Rethinking Strategy in a Hyperpolitical World

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