Political Risk: How Businesses and Organizations Can Anticipate Global Insecurity

by Condoleezza Rice, Amy B. Zegart

Overview

From New York Times bestselling author and former U.S. secretary of state Condoleezza Rice and Stanford University professor Amy B. Zegart comes an examination of the rapidly evolving state of political risk, and how to navigate it.

The world is changing fast. Political risk-the probability that a political action could significantly impact a company's business-is affecting more businesses in more ways than ever before. A generation ago, political risk mostly involved a handful of industries dealing with governments in a few frontier markets. Today, political risk stems from a widening array of actors, including Twitter users, local officials, activists, terrorists, hackers, and more. The very institutions and laws that were supposed to reduce business uncertainty and risk are often having the opposite effect. In today's globalized world, there are no "safe" bets.

POLITICAL RISK investigates and analyzes this evolving landscape, what businesses can do to navigate it, and what all of us can learn about how to better understand and grapple with these rapidly changing global political dynamics. Drawing on lessons from the successes and failures of companies across multiple industries as well as examples from aircraft carrier operations, NASA missions, and other unusual places, POLITICAL RISK offers a first-of-its-kind framework that can be deployed in any organization, from startups to Fortune 500 companies.

Organizations that take a serious, systematic approach to political risk management are likely to be surprised less often and recover better. Companies that don't get these basics right are more likely to get blindsided.

Product Details

ISBN-13:	9781455542369
Publisher:	Grand Central Publishing
Publication date:	05/01/2018
Sold by:	Hachette Digital, Inc.
Format:	eBook
File size:	22 MB
Note:	This product may take a few minutes to download.

About the Author

Condoleezza Rice is a professor of Political Economy in the Stanford Graduate School of Business and a professor of Political Science at Stanford University. From 2005-2009, Rice served as the 66th Secretary of State of the United States and also served as President George W. Bush's Assistant to the President for National Security Affairs from 2001-2005. Rice has authored and co-authored numerous books, including three bestsellers: Democracy: Stories from the Long Road to Freedom, No Higher Honor: A Memoir of My Years in Washington, and Extraordinary, Ordinary People: A Memoir of Family.

Amy Zegart is the Davies Family Senior Fellow at the Hoover Institution; Senior Fellow and Co-Director of Stanford University's Center for International Security and Cooperation; and professor of Political Science, by courtesy. She is the author of three books about U.S. intelligence challenges: Flawed by Design: The Evolution of the CIA, JCS, and NSC; Spying Blind: The CIA, the FBI, and the Origins of 9/11; and Eyes on Spies: Congress and the United States Intelligence Community.

Table of Contents

1 The Blackfish Effect: Twenty-First-Century Political Risk 1

2 Move Over, Hugo Chávez 14

3 How We Got Here: Megatrends in Business, Technology, and Politics Since the Cold War 55

4 Mind Games and Groupthink: Why Good Political Risk Management Is So Hard 78

5 Moving Beyond Intuition: Our Political Risk Framework 105

6 The Art of Boat Spotting: Understanding Political Risks 126

7 Analyzing Risks Like a Physicist 153

8 The Nuclear Triad, the Empty Plane, and Other Ways to Mitigate Risks 188

9 Zulu Time: Responding to Crises 223

10 Strengthening Your Political Risk Muscles 257

Acknowledgments 263

Notes 267

Index 309

Editorial Reviews

03/12/2018
Rice (Democracy), the former U.S. secretary of state and a political economy professor at Stanford's business school, and Zegart (Eyes on Spies), senior fellow at Stanford's Center for International Security and Cooperation, and the Hoover Institution, distill the advice they convey to M.B.A. students on how companies should handle political risks ranging from indignant activists on Twitter to hostile foreign states with teams of dedicated hackers. The text offers a detailed framework for responding, illustrated with true stories of corporate nightmares (including those of SeaWorld, which failed to properly respond to a critical documentary film and related viral tweets, and Sony Pictures, which had internal emails stolen, allegedly by North Korea) and risk-management exemplars (notably FedEx, which employs "a bevy of meteorologists working around the clock"). The framework's steps-understand, analyze, mitigate, and respond-are broken down in separate chapters, with useful questions business leaders must ask ("How can we limit the damage if something bad happens?") and actions they should take (forming a crisis team ahead of time with defined roles). Clearly written and timely, this book will interest not only current and future business executives but also would-be whistle-blowers and corporate watchdogs. Agent: Wayne S. Kabak, WSK Management. (May)

Publishers Weekly

"Rice and Zegart's POLITICAL RISK should be read by every business leader. Any company that fails to learn and apply the lessons of this wise and practical book can quickly find itself in rapid decline. But equally, those who become skilled at its application can do more than merely mitigate such risks; they can thrive upon them. Well-written and chock-full of compelling case stories wrapped inside a coherent conceptual framework, POLITICAL RISK gets and keeps your attention, page after page. We cannot predict the future, but — with the help of this marvelous masterwork— we can prepare for it."—Jim Collins, author of Good to Great and co-author of Great by Choice and Built to Last

"Smart. Informative. Overdue. Will completely change the way you think about political risk."—Eric Schmidt, former CEO of Google and Alphabet, Inc.

"Secretary Rice and Dr. Zegart have melded their professional experiences of managing political risk at the highest levels with other case studies into a uniquely useful and profound book."—Frederick W. Smith, chairman & CEO, FedEx Corporation

"Political risk was once centered on honest-to-goodness political actors — governments, central banks and the like. But as Rice and Zegart clearly show, technology has forever changed who counts as a 'political actor.' This book is truly excellent, both for tracing how far the political risk field has come in the last two decades, and how much further it has left to go."—Ian Bremmer, president, Eurasia Group

"Clearly written and timely, this book will interest not only current and future business executives but also would-be-whistle-blowers and corporate watchdogs."—Publishers Weekly

Praise for Democracy: Stories from the Long Road to Freedom


"Condoleezza Rice serves as an able and insightful guide in this journey through democracy across the globe. Her knowledge and clear-eyed assessment of the challenges facing this system of government make this book an important contribution to a pressing debate on democracy today."—Kofi Annan, former secretary-general of the United Nations

"[An] accessibly written study of that imperfect but ideal form of government...[One that] deserves a broad audience, especially in our current political climate."—Kirkus Starred Review

"[A] ringing call for democracy promotion...Ms. Rice should be commended."—Max Boot, The Wall Street Journal

"Working daily alongside Condi at the White House and State Department, I witnessed firsthand her foundational belief in the power of human freedom and the crucial need for democratic institutions to protect it. This book, full of fascinating anecdotes and insights, is a sweeping view of the global struggle for democracy and a must-read for all who care about the future peace of the world and its people."—Karen Hughes, former under secretary of state for public diplomacy and public affairs

From the Publisher

Developed from a Stanford MBA course, this well-crafted analysis is made even more accessible by narrator Grace Angela Henry’s audible connection with the authors’ ideas. Her serious tone fits the topic—global threats to business security and economic stability—but her warm and comfortable delivery keeps the weighty subject matter from sounding too heavy. Political scientists Rice (former secretary of state) and Zegart provide a cogent framework for anticipating, managing, and recovering from business disruptions, which they say can come from grassroots movements—against SeaWorld for its treatment of whales, for example—and from both government and impromptu political forces—such as Venezuela’s banning of Coke Zero and the Charlie Hebdo attack. The audio is a shining example of how well-developed thinking and the right narrator can make a complex subject sound immensely absorbing. T.W. © AudioFile 2018, Portland, Maine

APRIL 2018 - AudioFile

★ 2018-03-05
Former Secretary of State Rice (Democracy: Stories from the Long Road to Freedom, 2017, etc.) and Zegart (Eyes on Spies: Congress and the United States Intelligence Community, 2011, etc.), both Stanford political scientists, describe how political risk can affect businesses—and what to do about it.SeaWorld is devastated by online social activism over its mistreatment of killer whales. Sony Entertainment loses trade secrets to hackers. Kazakhstan becomes independent, and Chevron faces a nightmare over an oil-and-gas concession in the dissolving Soviet Republic. Such are the new dangers—from geopolitics to cyberthreats and terrorism—facing corporations in the turbulent global landscape of "unprecedented" economic opportunities and political risks of the past 30 years. During this period, societal changes—e.g., supply chain innovations, the communications revolution, and post-Cold War politics—have given rise to potentially harmful actions by individuals with cellphones, local officials using city ordinances, terrorists using truck bombs, and the U.N. imposing sanctions. Now, write the authors, "anyone armed with a cell phone or a Twitter or Facebook account can create political risks." Based on a Stanford seminar taught by the authors, the book examines the "notoriously difficult" job of managing the countless political risks that businesses face. Some firms excel, notably FedEx, Marriott, Disney, and the Lego Group as well as many cruise lines, chemical companies, law firms, tech companies, and others. Some have even created "mini-CIAs." Drawing on research, interviews, and their own experiences, Rice and Zegart provide detailed examples of companies that have succeeded or failed in meeting the new challenges and outline key ways to approach risks: Get good information. Build trusting relationships. Analyze continually. Integrate political risk analysis into business decision-making. As the authors write in closing, "the most effective organizations have three big things in common: They take political risk seriously, they approach it systematically, and they lead from the top."A carefully assembled, thorough book that should be required reading for corporate leaders.

Kirkus Reviews