Authors: Bonini, Sheila M. J.; Mendonca, Lenny T.; Oppenheim, Jeremy M.
Source: McKinsey Quarterly
Executives with lingering doubts about the importance of sociopolitical issues to business will surely be convinced by this year's eye-catching McKinsey Quarterly survey on the topic. Generally, participants in the poll saw environmental concerns, the offshoring debate, data protection, and other sensitive matters as potential threats to the creation of value and frankly conceded that their companies handled these issues poorly. Business leaders must become involved in sociopolitical debate not only because their companies have so much to add but also because they have a strategic interest in doing so. Social and political forces, after all, can alter an industry's strategic landscape fundamentally; they can torpedo the reputations of businesses that have been caught unawares and are seen as being culpable; and they can create valuable market opportunities by highlighting unmet social needs and new consumer preferences. The challenge is to find a way for companies to incorporate an awareness of sociopolitical issues more systematically into their core strategic decision-making processes. Companies must see the social and political dimensions not just as risks - areas for damage limitation - but also as opportunities. They should scan the horizon for emerging trends and integrate their responses across the organization, so that the resulting initiatives are coherent rather than piecemeal.