CREATING AND EXECUTING AN EFFECTIVE GR STRATEGY IN THE HOST COUNTRY

An effective government relations strategy starts early. The first step is information gathering: The company analyzes the political, economic, and social landscape of the host country and identifies key players that can influence the success of the project. Subsequently the company uses this knowledge to create an overall strategic plan that will guide its actions. The company begins executing its government relations strategy by implementing a series of detailed action plans designed to support objectives, address specific risks, and meet the government’s expectations.

First, the company needs a detailed and comprehensive understanding of the political environment (legislative and executive structure, political parties and key players, major trends and possible implications), the business climate (security, corruption, employment law and practices, environmental standards), and social conditions (education, health, infrastructure, level of economic development, NGOs). In-depth knowledge of government policy and economic development goals is essential, along with an appreciation of how the project affects that agenda. Though a company’s previous experience in the host country or the surrounding region may provide helpful insights, it’s no substitute for direct, thorough research drawing information from a wide range of sources. This research forms the basis for informed decision making throughout the company’s local operations. Too often companies entering new countries assume they know what they are getting into rather than take a fresh and unbiased outside-in perspective of what the real issues, challenges, and opportunities are. With this knowledge, the company can identify key local stakeholders: who matters in the host country and why. The stakeholder map should note important decision makers such as government officials, executives, community groups, and NGOs and trace their connections. Companies also should identify stakeholders outside the current power structure, such as the political opposition, that might gain influence if conditions in the host country change. An effective government relations strategy connects the company with all levels of government, other important institutions, and the major segments of society. This extended web of relationships can provide the influence needed to achieve short-term goals, and the ballast to withstand long-term changes.

Defining the Government Relations Strategy

Once the decision to invest has been made, and ideally even earlier, the company  uses the information and analysis from the first phase to create a comprehensive planning document for government relations in the host country. It is crucial that the company has the broad support of its joint venture partners in this matter.

The Strategic Plan should include the following components:

• Objectives and measures: The plan should state the goals of company and joint venture partners (such as delivering the project on time and on budget, protecting the value of a major investment) and those of the government. Quantifiable measures of progress help the company and the government see one, factual version of the truth. In some cases, depending on the host-country situation and ambitions, a much broader plan may include considerations with regard to developing the local industrial sector.
• Position on key topics: For each key topic of government engagement identified in the first phase, the plan should articulate the company’s ideal outcome, the government’s expectations, and an acceptable compromise position.
• Scope: The plan should list all aspects of the project that require government engagement, and identify the company’s activities and departments that will be affected by the government relations strategy. Taken broadly, these will range from human resources to the supply chain. A narrower approach might seem more expedient but can undermine the coherence of the strategy.
• Resources and capabilities: The plan should outline a detailed organizational structure and identify the key capabilities required to implement the strategy, along with any recruiting or training needed to secure those capabilities.
• Anticipated main risks: For each significant government relations risk identified in the first phase, the plan should lay out a mitigation strategy.
• Business case: The complete set of activities, expected outcomes, and associated costs should be brought together in a business case that ensures that, in the end, sound economic principles underlie the government relations strategy, and against which execution of all the plans can be managed.

Executing the Government Relations Strategy

Planning meets reality when the overarching strategic document is translated into a series of action plans and organizational adjustments focused on short-term project goals while advancing the company’s long-term objectives in the country.

1. Action plans name the individuals responsible for achieving each goal, set deadlines, and establish mechanisms for cross-functional communications, decision making, monitoring of progress, measuring success, and responding to changes and setbacks. At a minimum, the action plans should cover local supplier and local workforce development (recruitment and training), communications, and stakeholder management. A more integrated strategy also will encompass social/community investment, infrastructure investment (e.g., schools, hospitals, roads), and environmental sustainability.
2. A successful plan draws on the skills, experience, and insight of people throughout the company. Therefore, all those who will be called on to help implement the plan should have a voice in its development. The government relations department should be the company’s hub for information and expertise, and should be consulted on any government engagement activities. But the government relations or business development team alone should not be held responsible for achieving objectives that require support from other departments. Rather, the company should integrate the plan fully into its business processes and make any changes in its organizational structure that may be needed to carry out the government relations strategy. The latter approach is more rigorous and opens the door to genuine value creation through effective strategy execution.
3. Finding the right people for government strategy is crucial. Planners should seek the best talent available, inside or outside the company. While expatriate staffers have valuable operating experience and know the company’s “ways of working,” they’re outsiders in the host country. Hiring locals for government relations jobs brings the company deeper knowledge of the country and access to a broader network of local contacts.
4. Executives should consider the action plans part of a dynamic process of continuously assessing, updating, and improving the company’s government relations. Flexible action plans covering the full range of goals, constraints, and contingencies propel the project toward its goals, while managing setbacks along the way Using a “do-learn-improve” approach, the company should actively monitor progress and risks through formal, quantitative tracking systems and through informal feedback from government officials and others. These conversations provide an opportunity to discuss issues and address concerns before they lead to explosive surprises.
5. Company officials implementing action plans should remember that a government relations strategy is about more than just delivering the project; it also should advance the company’s broader objectives, such as access to new resources in the host country or enhancing its relationship with the local company (e.g., creating a partnership to bid for new projects).

The importance of influence

Influence is the lifeblood of government relations, affecting every stage of a company’s activities in the host country. It can help the company win permits, negotiate production agreements, and smooth out the inevitable bumps in its relationships with various host-country constituencies, be it at the national, regional, or local level. Winning and retaining influence requires strong stakeholder management and effective communications. Stakeholder management means developing one-on-one relationships between the company  representatives and the key players identified in the stakeholder map created in the first phase, which should be continuously updated to reflect changes in the power structure. Communication works at two levels: advancing the goals of the project and improving the company’s image in the host country. Companies should develop messages on relevant topics, tailoring them to the interests of local audiences and choosing the most appropriate media channels to tell their story. It is of great importance that the company and joint venture partners are consistent and speak with one voice.