Opinion: In business, channel your inner diplomat - Spear's magazine

How does your portfolio of geopolitical interests affect your real portfolio?

How does your portfolio of geopolitical interests affect your real portfolio?

In business, it’s often important to channel ones ‘inner diplomat’. Geopolitics has its own balance sheet, P&L and cash flow, argues former diplomat David Landsman

What happened at the G7 Summit? How’s Biden shaping up? Or new Israeli Prime Minister Naftali Bennett? What’s going to happen when Ebrahim Raisi takes over as Iranian President?  What is China going to do next in Hong Kong, or Russia in Crimea? Whatever it is, does it matter for my business, investments or pending lawsuit?  

It can be hard to make sense of today’s complex, multi-polar world. There are no crystal balls. We can’t be sure whether there’s a global policeman and, if so, whether he’s on duty or taking an extended lunch break.

Of course, I’d recommend that you get good professional advice. But I’m a firm believer that advice is only as good as the instincts of the person receiving it. Even if you don’t want to be an accountant (I never did), you wouldn’t try to run a business without the ability to read a balance sheet.  

It makes sense to read the ‘global balance sheet’ too. How does your portfolio of geopolitical interests affect your real portfolio? I call that ‘channelling your inner diplomat’.

I don’t mean testing your capacity for G&T or Ferrero Rocher, or how good you are at concealing your true feelings behind polite conversation. More prosaically, it comes down to having a feel for the EBITDA of geopolitics: interests, ideologies, trends and triggers.

First, interests. And first of all, your own. Be honest about them, at least to yourself. How do you come across to the people you need to influence? As part of the problem or part of the solution? Does the country you come from or the business you’re in make you susceptible to stereotypes? The ‘greenest’ business from a country with a poor record on the environment is going to have a hard time, and you’ll have to work twice as hard. Who should you try to persuade? How?

How about their interests? There’s the old story of the diplomat who ‘goes native’, becoming more attached to the country he’s living in than the one who pays his salary. It doesn’t happen very often in my experience, even if you’re lucky to be living somewhere idyllic.

But you won’t succeed in advancing your country’s interests if you don’t remember that the other guy has interests too – and that they can play to your advantage. Whatever you’re trying to achieve, the aim is to get your concerns moved higher up the intray of someone who might be helpful to you. 

That means watching and listening carefully and looking for the win-win. But who to listen to? Diplomats talk to lots of people (hence all those cocktail parties), but they don’t trust everyone equally. One of my favourite pieces of diplomatic advice is not to assume that the person in the room who has the smartest suit and speaks the best English is the smartest, most reputable and most reasonable.

The one who says the least might well be the most influential, or it might be they’re just trying to hide that they can’t understand the conversation. Either is possible. Don’t assume.

Second is ideologies or other motives. Another favourite piece of advice is don’t assume that your counterpart is mad or bad until you’ve exhausted all other options. In my diplomatic career, it’s fair to say I met a fair few who neatly fitted into both categories.

You always need to be careful. But being dismissive doesn’t help. Assume they’re acting rationally and try to work out what they want to achieve. Even if you conclude that you’ve got a big problem, you’ll have likely found a way to deal with it.

If you’re a hard-nosed business person, it’s worth remembering that some people really are motivated by ideologies. Start by trying to understand, even if you’ve got no intention of believing. They may be so fanatical as to be impossible to deal with. But most people want something, and it’s by no means always what it says on the tin and it’s often negotiable.

How about those environmental campaigners? Is their real interest nature, or something else? Who owns the newspaper campaigning about workers’ rights? What else does he own? In my view, it always pays to be sceptical earlier, or else you’ll certainly end up cynical later.  

Thirdly, fascinating though people are, you need also to look at the trends: the graphs of geopolitics. Who’s getting stronger? Who’s getting more stuck into the geography you’re invested in? Who’s losing interest? And even if you think you can unearth the ‘reality’, perception matters too. In economics, we know that inflation expectations are “a thing” in their own right.

In geopolitics, ‘power expectations’ are a thing too. Take the Middle East in 2021. What happens next will be down in part not to what President Biden does but to what the regional players believe the US will do. So ask the question – though don’t of course automatically believe the answer.

Finally, triggers. Diplomats know the risks of being put on the spot by being asked to predict what will happen. Who will win the election? Will there be a war? Will the army seize power? Sometimes you can stick out your neck – and you should. In Greece during the early years of the debt crisis, I surprised some colleagues with my confidence that the country wouldn’t quit the Euro. But you can’t always be sure. In that case, split the problem up into more manageable chunks and examine the sequence of events: if Mr X wins the elections, then event Y is more likely.  What do you really want to know? What other questions might help?

Geopolitics has its own balance sheet, P&L and cash flow. Call in the experts for a full audit but take a read first.

Photo: Shutterstock/tsyhun

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