Disruptive Innovation as a Catalyst for Collective Action

Welcome to Inside Corporate Affairs, where we discuss the latest developments and best practices in achieving corporate affairs excellence. In this edition, BlackRock overhauls its public policy team amid scrutiny and political pressure - when should you start thinking about restructuring your public affairs function too? InfluenceMap study reveals a disconnect between lobbying and climate commitments - but what role does consistency, credibility and balance play in climate communications? And with OpenAI in meltdown following the removal and reinstatement of Sam Altman as CEO, what can we learn about corporate governance and investor relations? All of this and more, with our focus of the week - disruptive innovation as a catalyst for collective action.

This Week in Corporate Affairs

• BlackRock Overhauls Policy Team Amid Scrutiny and Political Pressure
• InfluenceMap Study Reveals Disconnect in Lobbying and Climate Commitments
• OpenAI in Meltdown

BlackRock Overhauls Policy Team Amid Scrutiny and Political Pressure

BlackRock is undergoing a significant transformation in its public affairs and lobbying unit as it grapples with intensified scrutiny and political pressures. In response to a shifting landscape and a complex political environment, the asset management giant is revamping its public affairs team. The company is actively seeking to fill new roles with a strong focus on US and state government affairs, recognising the paramount importance of these positions in light of the upcoming US presidential election year. John Kelly, BlackRock's global head of corporate affairs, has emphasised the necessity of these changes, citing the mounting pressures on the firm's reputation and the constantly evolving policy terrain.

The firm's response to these challenges holds valuable lessons for corporate affairs leaders facing similar circumstances. It underscores the need for proactive adaptation to anticipate and address changing political and regulatory landscapes. Furthermore, strategic resource allocation is crucial for effectively managing immediate threats and long-term policy challenges. Transparent communication is key, both internally and externally, throughout the restructuring process. Finally, maintaining an organisational structure that can adapt swiftly to emerging policy and reputation issues is essential. BlackRock's proactive steps serve as a reminder of the critical role of an agile and adaptable public affairs function in navigating today's fast-paced political climate. These changes are not only indicative of the evolving landscape but also offer valuable insights into the strategies and tactics needed to thrive amidst growing scrutiny and political complexity.

InfluenceMap Study Reveals Disconnect in Lobbying and Climate Commitments

A recent study by non-profit think tank InfluenceMap has revealed a significant inconsistency between the climate commitments made by major corporations and their lobbying efforts. Glencore, ExxonMobil, and Stellantis, among others, have been found to actively support policies that undermine their own pledges to reduce carbon emissions. The report analysed 293 companies from the Forbes 2000 list and found that nearly 60% of those with net-zero emissions or similar climate targets were at risk of greenwashing due to their lobbying activity. InfluenceMap's study aligns with the UN's guidance on aligning lobbying with climate commitments, and emphasises the importance of transparency and coherence in climate action.

Corporate affairs leaders should remember that consistency is key. The study highlights the importance of aligning lobbying efforts with public climate commitments and leaders should do more to ensure their company's actions are consistent with their stated sustainability goals. Moreover, credibility is on the line. Inconsistencies between climate pledges and lobbying actions can damage a company's reputation and trustworthiness, locking them out of the policymaking process. Leaders should recognise that credibility is at stake and act accordingly. Balancing stakeholder interests is another critical lesson. While advocating for climate action is essential, leaders must also consider the needs and interests of various stakeholders. Striking a balance between environmental goals and other business objectives is challenging but necessary. Altogether, the study serves as a wake-up call for businesses to ensure their climate commitments are not just empty promises. It highlights the importance of aligning actions with words, maintaining transparency, and considering the broader impact of lobbying on climate policy.

OpenAI in Meltdown

In a dramatic turn of events, OpenAI was left fighting for survival after the sudden removal of CEO Sam Altman. Prominent investors, including Microsoft, stepped in and were finally successful in reversing the board's decision, but the incident has highlighted the impact of poor governance structures. OpenAI employees reacted strongly to Altman's removal, with hundreds signing a letter demanding the board's resignation. Microsoft, a key partner of OpenAI, quickly announced that Altman would join the tech giant as part of a new AI research group. With many OpenAI employees contemplating a move to Microsoft to work with their former CEO, pressure mounted on OpenAI's board and they finally agreed to resign. Altman is now returning to OpenAI as CEO with a new board in place.

The recent events have raised questions about the effectiveness of OpenAI's governance model. As corporate affairs leaders consider this situation, it becomes clear that governance structures, even in non-profit organisations, must be robust, transparent, and responsive to stakeholders' concerns. Effective communication, transparency in decision-making, and stakeholder engagement are critical components of governance. OpenAI now faces the challenge of re-evaluating its governance structure to address the concerns raised by employees and investors. The case also serves as a reminder that governance and leadership transitions require careful planning and execution to maintain trust and stability.

Taking Strategic Action in Corporate Affairs

Taking strategic action is essential in corporate affairs. It empowers leaders to proactively respond to challenges and opportunities, and helps to ensure organisations remain agile in and responsive to a dynamic policyscape. It enables professionals to navigate complex regulatory change, manage crises effectively, and position themselves as industry leaders. Are you ready to take your corporate affairs leadership to the next level? If so my Corporate Affairs Senior Leader Coaching Programme may be a good fit for you.

This is a high-level coaching programme for global and regional heads of corporate affairs, public policy and related roles. Delivered remotely, and with the first cohort beginning in Q1 2024, you will develop your skills through one-to-one coaching with me in the six competence areas of 1) corporate affairs leadership 2) taking strategic action 3) powerbase development 4) influencing stakeholders 5) leading global teams and 6) managing risk and reputation. Together, these form the foundation of what it takes to excel in corporate affairs. Places are limited, but to find out more and apply, contact me now at [email protected].

Disruptive Innovation as a Catalyst for Collective Action

Disruptive innovation is a transformative force that reshapes industries, challenges conventional norms and pressures organisations to adapt. In this context, the role of public affairs in building and mobilising coalitions has gained significant prominence – where public affairs serves as a bridge between new technologies and the regulatory frameworks that seek to govern them. In this article, I’ll discuss how disruptive technology pressures policymakers to act and highlight the impact of this on the formation of new coalitions. I’ll also explore how coalitions can be built and optimised for engagement in a disruptive space. This exploration unveils not only the challenges but also the immense potential for innovative companies and emerging industries to establish their voice and influence in the process of policy change.

How Disruptive Technology Pressures Policymakers

Disruptive innovation poses a significant challenge for policymaking. New technologies take time to understand and policymakers are pressured into unfamiliar terrain where traditional regulatory frameworks falter. The rapid evolution of disruptive technologies further heightens this urgency, as policymakers grapple to make sense of technology change and its far-reaching impacts on society.

In this environment, policymakers must navigate a delicate balance between fostering innovation and managing risks. The accelerated pace of technological advancements adds complexity to the challenge but adaptive regulatory approaches are key. Policymakers must re-evaluate and adapt existing regulatory frameworks, collaborating closely with industry stakeholders to craft forward-looking and responsive regulation. This demands flexibility in policymaking to accommodate the evolving technological landscape.

The tug-of-war between the dynamic nature of disruptive technologies and the need for stable regulatory frameworks becomes evident. Amid these challenges, coalitions emerge where stakeholders from various sectors, including technology companies, advocacy groups, research institutions, and academia, recognise the importance of collective action in influencing the policyscape. These coalitions represent shared interests and facilitate cross-sector collaboration to shape regulatory frameworks and offer a collective voice in a world marked by disruption.

How Regulatory Pressures Give Rise to New Coalitions

Regulatory uncertainty often emerges as a catalyst, driving diverse stakeholders to converge and advocate for policy changes that reflect the unique dynamics of emerging technologies. In this context, new coalitions are established, as powerful vehicles for collective action. Organisations with common goals and interests unite their efforts to address regulatory gaps, advocate for informed policy decisions, and provide a unified voice to policymakers. These coalitions represent a convergence of perspectives that span across industries, highlighting the interconnectedness of contemporary challenges posed by disruptive innovation.

The changing policyscape and the formation of coalitions underscore how the trajectory of innovation is tied to the evolution of policy. These alliances, as we will explore further, bring together stakeholders that may be new to public policy engagement, reshaping traditional dynamics of advocacy in the process.

The Nature of New Coalitions

Interestingly, the coalitions that emerge in response to disruptive innovation often encompass a diverse array of members, including organisations that are relatively new to public policy and possess nascent public affairs capabilities. Startups, innovative tech firms, and emerging players in non-traditional industries may lack the established expertise and experience required to navigate the intricacies of policy advocacy effectively.

For these members, participation in a coalition becomes a transformative learning experience. The collaborative environment offers a platform for knowledge-sharing, capacity-building, and skill enhancement. The coalition structure allows novices to leverage the collective wisdom of more experienced stakeholders, facilitating a rapid learning curve in what can be a complex policyscape. This convergence of fresh perspectives and seasoned insights fosters a dynamic exchange that redefines the boundaries of public policy engagement, ultimately contributing to a more inclusive and informed regulatory discourse.

The interplay between seasoned advocacy veterans and newcomers to the public affairs landscape is a testament to the democratising potential of coalitions. It underscores the principle that shaping regulation should not just be the responsibility of incumbent players, but should instead reflect the collective interests of diverse stakeholders.

Building Coalitions in Tech and Innovation

The formation of coalitions in response to disruptive innovation requires a strategic and collaborative approach. Companies seeking to establish effective coalitions can benefit from adopting best practices that maximise impact and drive meaningful change.

Strategy Development: Effective strategy development is vital because it provides a clear roadmap for coalition activities, ensuring that objectives are met, resources are used efficiently, and the coalition can adapt to changing circumstances in the disruptive technology landscape.

• Define Clear Objectives: Clearly articulate the specific policy goals and outcomes your coalition aims to achieve. Ensure that these objectives align with the unique challenges and opportunities presented by disruptive technology. Being specific will help maintain focus and garner support.
• Resource Sharing: Pool not only financial resources but also knowledge, research, and networks. For new coalitions with limited resources, this collaborative approach can help you to amplify your impact and navigate regulatory challenges.
• Adaptive Approach: Embrace flexibility in your coalition's strategies and adapt to the evolving policyscape. The coalition's strategies should align with changing circumstances and emerging priorities. Given the fast-paced nature of disruptive technology, staying responsive is crucial for success.

Diversity and Inclusivity: Embracing diversity and inclusivity is essential as it brings together a broad range of expertise and perspectives, enabling coalitions to anticipate and address regulatory challenges comprehensively. This also helps to foster innovation.

• Diverse Membership: Assemble a coalition that includes a wide range of stakeholders, not just from your industry but also from related fields. Diversity of perspectives and expertise is even more crucial in the disruptive technology space, as it can help anticipate and address various regulatory challenges.
• Inclusive Engagement: Create an inclusive environment where every coalition member's voice is heard and valued. Encourage active participation and collaboration. For newcomers, this can be a valuable platform for learning from more experienced stakeholders.
• Cross-Industry Partnerships: Seek partnerships and alliances not only within your industry but also across various sectors impacted by this disruptive technology. These cross-industry collaborations can provide a broader perspective on regulatory challenges and facilitate innovative solutions.

Communication and Engagement: Strong communication and engagement strategies are crucial for coalitions, as they help convey the coalition's goals, engage a diverse set of stakeholders, build international collaborations, generate public support, and enhance the visibility and influence of the coalition.

• Strategic Messaging: Craft messages that not only convey your coalition's goals but also highlight the broader benefits of your technology to society. Make sure your messaging resonates with policymakers by emphasising innovation, economic growth, and job creation. Unified communication increases the coalition's visibility and impact.
• Engage Stakeholders: Beyond the coalition, reach out to external stakeholders, including industry associations, consumer groups, and research institutions. Broader support can enhance your coalition's credibility and strengthen its advocacy efforts. Public engagement campaigns can generate awareness and build momentum for technology adoption.
• Global Collaboration: Recognise the interconnectedness of the global technology landscape and seek opportunities for international collaboration. Partner with organisations and stakeholders from different countries to influence global regulatory frameworks and ensure a harmonised approach to disruptive technology policy.

Knowledge and Expertise: Nurturing knowledge and expertise within a coalition is important because it empowers members with in-depth policy insights and a long-term vision, enabling them to effectively navigate a complex and disruptive technology-driven policyscape.

• Collaborative Learning: Establish mentorship or knowledge-sharing programs within the coalition. Pair newcomers with seasoned advocates to accelerate their learning curve. Novice participants can learn from experienced members, enhancing their public affairs capability.
• Policy Expertise: Invest in building a deep understanding of policy dynamics, legislative processes, and regulatory nuances related to disruptive technology. Consider hiring experts or consultants with specialised knowledge in this area to strengthen your coalition's effectiveness.
• Long-Term Vision: While addressing immediate regulatory challenges, maintain a long-term perspective. Focus on building relationships and advocating for policies that support the sustainable growth of disruptive technology over time, rather than pursuing short-term wins. Sustained advocacy can drive enduring policy change.

By following these practices, companies developing disruptive technologies can enhance their effectiveness and contribute to shaping regulatory policies that foster innovation and safeguard public interests.

Conclusion

As disruptive technologies continue to push boundaries, the need for agile and adaptive regulatory frameworks becomes increasingly evident. These frameworks, in turn, spur the emergence of new coalitions. The collaborative spirit of these coalitions demonstrates the power of collective action in influencing policy decisions that shape the trajectory of disruptive innovation. As newcomers to public policy find their voices alongside seasoned advocates, the notion of a level playing field takes on new dimensions, creating opportunities for diverse stakeholders to contribute to policy discourse. In a rapidly changing space, the rise of coalitions signifies a shift towards more inclusive and impactful public advocacy, with the potential to drive transformative outcomes that benefit industries and societies at large.

Leadership Takeaways

• Disruptive innovation reshapes industries, challenges norms, and necessitates adaptive leadership.
• Public affairs plays a crucial role in bridging the gap between disruptive technologies and regulatory frameworks.
• Policymakers face pressure to understand and regulate disruptive technologies due to their rapid evolution and societal impact.
• Policymakers must strike a balance between fostering innovation and managing risks posed by disruptive technologies.
• Adaptive regulatory approaches are essential to address the rapid changes in the technological landscape.
• The tension between dynamic technologies and stable regulations underscores the challenge policymakers face in finding the right balance.
• Regulatory uncertainty catalyses the formation of coalitions, enabling collective action for policy change.
• Effective coalitions embrace diversity and inclusivity, bringing together a wide range of expertise and perspectives.
• Strong communication and engagement strategies are essential for coalitions to convey their goals and gain public support.
• Coalitions should foster collaborative learning and policy expertise to navigate complex regulatory landscapes effectively.
• While addressing immediate challenges, maintain a long-term perspective to advocate for sustainable solutions in a disruptive policy space.

That's it for this week's edition of Inside Corporate Affairs. Subscribe now, and if you like what you read today, please like and share it with your network to help me reach a wider audience. Have a good day, a great week, and I'll see you again soon.