Why small businesses should care about politics
The new Cabinet has just concluded a three-day retreat and every entrepreneur and micro, small and medium-size enterprise (MSME) should take a keen interest in the decisions and announcements that will emerge pertaining to our national affairs. Unfortunately, in my experience as a business trainer and coach, many of these enterprises and their leadership take no interest at all in these matters, to their detriment.
There are two common mistakes that I see entrepreneurs and small business owners make when it comes to business and politics: the first is believing that politics is irrelevant to their operations, and the second is becoming too engrossed in it. In other words, when it comes to business, there's as much danger in ignoring politics as there is in being too politically charged.
WHY POLITICS MATTERS
Entrepreneurs should always be concerned with politics because those who hold power in government, or have influence over government, play a major role in shaping and managing the business environment in which they operate. Business environmental factors such as the economy, ease of doing business, consumer buying power, competition, the legal framework, labour force, environment, security, education and health, and many others. Disregarding politics is akin to turning a blind eye to one of the most critical success factors for any business, organisation or profession for that matter. Understanding and helping
to shape political party perspectives and policies on industry/business development should be essential for any serious business owner.
Well-established and well-run companies so appreciate the profound impact of politics on their fortunes that the highest levels of management will proactively study and manage political risk in every market in which they operate. Political risk is the extent to which a company's performance may be impacted by political changes, policies, decisions or general instability.
Political risks are typically categorised by country level and firm level. At the country level, the primary concerns are legislative or regulatory changes, national policy changes, transparency and fairness, bureaucracy, corruption. Specifically for Jamaica this would certainly include the country's economic reform programme, our relationship with and commitments to various multilaterals and foreign and local debt holders, the growth agenda, among several others. Firm-level risks generally relate to discriminatory policies, industry, specific taxation and regulations, for example, new or revised licensing regimes, tariffs, business registration and certifications changes, to name a few.
Very important, but often overlooked, is the fact that government is the largest purchaser of goods and services and can make or break businesses. Political power brokers can, and have been known to, help build wealth for individuals and companies through the award of contracts or hire arrangements. Or in the alternative, political influence can exclude MSMEs from lucrative opportunities which should ideally be accessible to them but are, instead, earmarked for the well-connected. The point is, everyone who operates a business should be interested in how government procures goods and services and, where possible, put themselves in a position to bid for contracts where they are qualified and capable of delivering value for money.
AVOIDING POLITICAL BIAS
The rule of thumb in business is to avoid taking political sides and becoming involved in political controversy of any kind. Some entrepreneurs go out on a limb to support or bankroll a particular party in anticipation of payback after an election win. It's a risky and impractical approach I don't recommend. It should also become a more challenging business growth/profitability/
wealth-creation strategy as the country strengthens campaign finance reform, improves anti-corruption mechanisms, and civil society demands better, more transparent governance.
In an ideal world, the business community should be free to share, if they so choose, their political preferences and affiliations, as well as commendations and criticisms of political organisations. Such disclosures and utterances should have no impact on the fortunes of their enterprises or their ability to compete fairly in the marketplace. In reality, this is not so. Who you support and what you say in the public domain, particularly on social media, matters. While we have a Constitution that guarantees the freedom to express one's political opinions without being discriminated against, the nature of our politics is tribal and divisive, and there may be unexpected and undesirable consequences. You will notice that most of the private sector entities that disclose campaign donations give equally to each party. Neutrality, especially in the public domain, is the name of the game.
n Yaneek Page is an entrepreneur and trainer in entrepreneurship & workforce innovation. She's also the creator & executive producer of 'The Innovators' TV series. Email: email@example.com Twitter: @yaneekpage, Website: www.yaneekpage.com