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Political Risk: How Businesses and Organizations Can Anticipate Global Insecurity
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.
Runtime: 8 hours, 34 minutes.
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.
Runtime: 8 hours, 34 minutes.
9 pages, Audiobook
First published May 1, 2018
123 people are currently reading
783 people want to read
About the author
Condoleezza Rice
31 books281 followersCondoleezza Rice is the 66th United States Secretary of State, and the second in the administration of President George W. Bush to hold the office. Rice is the first black woman, second African American (after her predecessor Colin Powell, who served from 2001 to 2005), and the second woman (after Madeleine Albright, who served from 1997 to 2001 in the Clinton Administration) to serve as Secretary of State. Rice was President Bush's National Security Advisor during his first term. Before joining the Bush administration, she was a professor of political science at Stanford University where she served as Provost from 1993 to 1999. During the administration of George H.W. Bush, Rice served as the Soviet and East European Affairs Advisor during the dissolution of the Soviet Union and German reunification.
When beginning as Secretary of State, Rice pioneered a policy of Transformational Diplomacy, with a focus on democracy in the greater Middle East. Her emphasis on supporting democratically elected governments faced challenges as Hamas captured a popular majority in Palestine yet supported Islamist terror, and influential countries including Saudi Arabia and Egypt maintained authoritarian systems with US support. She chairs the Millennium Challenge Corporation's board of directors.
In addition to English, she speaks, with varying degrees of fluency, Russian, German, French, and Spanish.
When beginning as Secretary of State, Rice pioneered a policy of Transformational Diplomacy, with a focus on democracy in the greater Middle East. Her emphasis on supporting democratically elected governments faced challenges as Hamas captured a popular majority in Palestine yet supported Islamist terror, and influential countries including Saudi Arabia and Egypt maintained authoritarian systems with US support. She chairs the Millennium Challenge Corporation's board of directors.
In addition to English, she speaks, with varying degrees of fluency, Russian, German, French, and Spanish.
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Displaying 1 - 30 of 61 reviews
July 29, 2018
I had high hopes for a deep dive into political risk, its implications and suggested solutions. Sadly, this book proved highly disappointing. Rice and Zegart return time and again to the same tired examples and sources. How many times do you want to lean on quoting Marc Andreessen about risk or regurgitating the travails of SeaWorld and FedEx in chapter after chapter?
The authors write that this work is intended for their Stanford MBA students (ah, yes, the tried and true technique of professors writing books, then forcing their students to buy them). The material here is so simplistic, however, that it is better suited to an introductory undergraduate course, if that.
I made it to the end of the book only in hopes that the authors would offer some concrete solutions in later chapters. They at best skirted around any action steps. I'm sure that former Secretary of State Rice has much more to offer given her practical experience in addressing political risk. It is, unfortunately, not found in this volume.
On a technical note, the authors would be better served by a new publisher. The paper quality of the copy I read was flimsy. Hard to imagine it would survive the rigors of a flock of MBA students. Also, the design looked amateurish. The pull quotes, for example, looked like a last second throwaway addition.
I was eager to read this as a resource for a book I'm working on that covers, among other things, reputational risk. I wish I could say I found this book useful, but it won't even make it into the recommended reading section.
There is no questioning Rice's expertise. Just don't expect to find much of it in "Political Risk."
The authors write that this work is intended for their Stanford MBA students (ah, yes, the tried and true technique of professors writing books, then forcing their students to buy them). The material here is so simplistic, however, that it is better suited to an introductory undergraduate course, if that.
I made it to the end of the book only in hopes that the authors would offer some concrete solutions in later chapters. They at best skirted around any action steps. I'm sure that former Secretary of State Rice has much more to offer given her practical experience in addressing political risk. It is, unfortunately, not found in this volume.
On a technical note, the authors would be better served by a new publisher. The paper quality of the copy I read was flimsy. Hard to imagine it would survive the rigors of a flock of MBA students. Also, the design looked amateurish. The pull quotes, for example, looked like a last second throwaway addition.
I was eager to read this as a resource for a book I'm working on that covers, among other things, reputational risk. I wish I could say I found this book useful, but it won't even make it into the recommended reading section.
There is no questioning Rice's expertise. Just don't expect to find much of it in "Political Risk."
August 2, 2018
If you want to learn about how LEGO and FedEx handle political risk, this is your book. Otherwise, I wouldn’t bother reading. Interesting nuggets of knowledge and anecdotes scattered across but there are few are far between. Both authors are clearly smart and knowledgeable but this book is just not worth reading—there are too many other better books out there.
March 29, 2025
What a great read, worth rereading. Make sure to read some other books on risk before getting into this one, since it focuses on a specific kind of risk.
July 8, 2025
This book was really interesting and helpful. Def inspired me to pivot my career in a direction where I can implement what they discuss into my work.
November 26, 2018
My response to this book is a bit of a shrug. It does a good job of providing a framework to digest and manage political risk but probably did not need to be a book. The examples were too repetitive. If they had added mostly new examples during each chapter, as opposed to recycling the old, this would be much more pleasant and engaging to read.
In my opinion, read the first couple chapters and the last chapter (where Condi/Amy talk about the biggest political risks facing companies these days) if you are just trying to get a basic understanding of political risk.
If you are developing a strategy for managing political risk for an organization then it's probably worth the full read.
In my opinion, read the first couple chapters and the last chapter (where Condi/Amy talk about the biggest political risks facing companies these days) if you are just trying to get a basic understanding of political risk.
If you are developing a strategy for managing political risk for an organization then it's probably worth the full read.
May 13, 2018
Maybe title should be political risk AND reward. Shorting SeaWorld based on its exposure to political risk has been a very profitable trade.
LIke little reads that come from courses taught by Professors whose courses on campuses I will never attend.
LIke little reads that come from courses taught by Professors whose courses on campuses I will never attend.
May 14, 2018
This book surprised me. I thought it would be boring since it was designed for business professionals. I actually enjoyed it. The chapters each have a takeaway section summary at the end. I would recommend this book to anyone who owns their own business or works in the small business environment.
January 6, 2025
I really wanted to like this book :( it had all the ingredients to be interesting to me - politics, risk, Condi - but ultimately fell short of expectations as it lacked depth. The low signal to noise ratio was quite disappointing as I don’t feel like I learnt many new or interesting things that could actually help me in risk management.
This could have been a 1 hour podcast episode instead of a book.
This could have been a 1 hour podcast episode instead of a book.
May 28, 2021
“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”, according to former U.S. secretary of state Condoleezza Rice and Stanford University professor Dr. Amy B. Zegart, who co-authored POLITICAL RISK: HOW BUSINESSES AND ORGANIZATIONS CAN ANTICIPATE GLOBAL INSECURITY, a 336-page book released May 2018 in hardcover and a year later in paperback by Hachette Book Group’s Twelve imprint. Page numbers cited refer to the hardcover edition.
This book remains timely because of the political climate in our nation, and offers a framework for collecting data on risks organizations and people face, analyzing that data and then acting in prudent ways. “The goal of political risk analysis is not to predict the future. Nobody can do that. The goal is to create better decisions for your organization by developing insight about key drivers and possibilities” (pg. 169). “Good political risk management mostly comes down to focus” (pg. 75).
There are some leaders who have obtained their positions through a careful vetting of candidates for the job, by stress testing in activities designed to measure their cognitive abilities, independence or interdependence on others, communication skills, and other relevant criteria. They may have tried two or three times to get to that place, but the vicissitudes of life and prevailing circumstances kept hobbling them, sidelining them.
Others with charisma and serial entrepreneurial experience have amassed a coalition of people willing to follow them, to overlook certain — or many — glaring deficiencies, and by domination or manipulation of trusted communication channels, they ignited a chain reaction that propelled them over the finish line in first place. Character is magnified, not just made, following a promotion with more responsibility, visibility and power. Whatever you were lacking when you arrived, will still be lacking unless you have people around you to help identify areas improvements can be made, and you and the team compensate for weaknesses and major on strengths, with as much effort and humility as you can.
“Tripwires are systems that identify what information to look for in advance. Protocols make clear what steps should be taken by whom when the tripwire gets crossed…(pg. 207). In the most general sense, tripwires may include laws, policy statements, common-sense expressions of best practices, and combinations of physical and online technologies that set the protocols into motion. When somebody sets off one of these, or crosses that line in the proverbial sand, depending on the severity of the occasion, consequences more resolute than a slap on the hand must occur if a lesson is to be learned and loss to the property or organization is to be avoided.
Forward deployment means working closely with each business unit, understanding its priorities, pain points, and communicating political risk perspectives to executive audiences so the political risk is baked in, not bolted onto decision-making as an after-thought (pg. 183). A component baked in is blended and fused with the other components, whereas one bolted on is auxiliary, considered an outsider and less central to the functioning of the system.
There are numerous news clipping services and intelligence briefings compiled from analysts and consultants in various disciplines that may be subscribed to. “Companies on the front lines of managing global political risk have developed in-house threat assessment units staffed with former intelligence and law enforcement professionals” (pg. 205). Think of them as private mini-CIAs that gather and interpret massive amounts of rapidly changing information for their executives to absorb and act on. The authors mentioned something that is public knowledge, that FedEx Corporation has a former NSA Deputy Director on its Board of Directors, who is on three committees, including Information Technology Oversight.
The authors of this book are uniquely qualified to speak to the issue of how political actions affect business. As a former U.S. National Security Adviser and U.S. Secretary of State who impacted thousands, if not millions of people, as she analyzed and acted on classified intelligence, Condoleezza Rice also has thirty years of academic association with Stanford University. She now serves as the Denning Professor in Global Business and the Economy and teaches political science courses at Stanford, as well as being the Thomas and Barbara Stephenson Senior Fellow on Public Policy at the Hoover Institution.
Dr. Zegart was a management consultant at McKinsey and Company before serving as the co-director of the Center for International Security and Cooperation, the Davies Family Senior Fellow at the Hoover Institution, and a senior fellow at the Freeman Spogli Institute for International Studies at Stanford University.
The authors say that risk management is a cost center that sometimes is hard to justify to executives and shareholders. “Cyber protection measures, legal teams, risk officers — these functions produce no revenues” (pg. 84), so this begs the question: was Benjamin Franklin right about a penny saved being the same as a penny earned?
“People who don’t pay attention to political risk who have any vulnerability to it, ignore it at their peril,” warns Frederick W. Smith, Chairman and CEO of FedEx Corporation (pg. 12). “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,” Smith said in praise of POLITICAL RISK (quote on back cover).
Providing assurances using probability theory is the work and plaything of insurance actuaries, betting bookies in Las Vegas, and meteorologists, who will crunch the numbers and throw the dotted bones to discern the likelihood of everything, from what horse or dog to bet on, who are profitable choices for marketing health, property and life insurance to, to whether freezing rain or clouds with meatballs are in the weather forecast this coming weekend. It is part art, part science, with arguably some alchemy mixed in.
Leadership of any sized organization, whether public- or private-sector, whether a government or a family, must manage their risk exposure. Operational, public relations, legal, human resources, and every other stakeholder group must be proactive in identifying new and changing threats and opportunities. This matrix with three questions related to each of the four steps an organization must take in regard to political risk is found on page 107 [hardcover], and also on https://imgur.com/a/8tn4CDJ.
After failure, [business] postmortems reveal all sorts of information that could have been shared beforehand but wasn’t…A 2009 survey by [Darcy Steeg Morris and] the Cornell University Survey Research Institute found that 53 percent of respondents admitted they never spoke up about an idea or problem. When asked why, many said they thought it would be a waste of time or could hurt their careers” (pg. 236, 237).
Having an anonymous reporting system for whistle blowers to use, can provide organizations with valuable information located in blind spots or held in fiefdoms’ information silos, while protecting the individual sounding the alarm on some questionable or heinous activity. Some people want things to get better but do not want their names attached to new initiatives or bold ideas that feel counter-cultural, so to avoid political baggage, they lobby from the shadows. A lot of good can happen if you’re not too particular about who gets the credit, it has been said.
Many companies are part of industries with associated non-profit bodies that gather feedback from all levels of companies, their vendors and customers, and produce insightful reports. More than one employee has run afoul of bosses and reputational management types in their company when given the task of responding to one of these third-party surveys. They were given a time and place to do it, known to management, and video and snag-it images from the employees’ sessions on company computers were retained. Anything that looked like a rant against existing conditions or was a middling rather than strong positive candid evaluation, would be frowned on by higher-ups and decisions would be made to selectively enforce certain rules and regulations governing the employees’ conduct.
H.R. may be directed to set speed traps, if you will, and be ready to document those ill-favored people all the way onto the street with signed severance, non-compete and non-disclosure forms, thank you very much! Sometimes sexual temptations and items of value were made available in an entrapment fashion, and if wrong choices were made, leverage against employees was gained, where people could be “owned” or disowned with quick quiet exits obtained. While still within the companies, those employees kept overhearing conversations designed to provoke a fight-or-flight response, or “information” and water cooler gossip that would help discredit whoever repeated it.
Remaining average, like an unlabeled commodity, without distinctive characteristics or passion for one’s work, seems to me more likely to get somebody passed over for promotion, or facing a cut in hours or a work layoff. “If a man is called to be a street sweeper,” Dr. Martin Luther King Jr. told us, “he should sweep streets even as a Michelangelo painted, or Beethoven composed music or Shakespeare wrote poetry. He should sweep streets so well that all the hosts of heaven and earth will pause to say, ‘Here lived a great street sweeper who did his job well.’”
“Rewarding courageous acts fosters a premortem culture — encouraging people in the organization to volunteer information about what could go wrong before it does go wrong” (pg. 236, 237). Hindsight is 20/20, they say. To think critically about opportunities and problems in front of us, where we add value and energy rather than drain it out of the room, will distinguish us from practitioners of mediocrity and bring us to the attention of those in charge (Proverbs 22:29).
Chances are excellent the Company knows everything about what its employees, customers and vendors are doing on its equipment and networks, especially if they brush up against one of the tripwires. At that point, the relevant protocols will be started and somebody will get schooled about using best practices on work-related computing devices, or receive discipline that could involve loss of responsibilities, dismissal or legal action.
FedEx’s entrepreneurial Mr. Smith is generally considered to have an above-average appetite for risk in making business decisions, enabling some groundbreaking, even gravity-defying innovations along the way. Just as he was ahead of many companies in investing in IT infrastructure and the means to protect the Company assets it connects, he invested in the school-to-work pipeline in Memphis, partnering with the University of Memphis to create the FedEx Institute of Technology. Students — some with advanced degrees — work on many emerging technologies across scientific and technical disciplines, and FedEx’s sponsorship gives it the right of first refusal in licensing deals for patents and trademarks developed.
Americans should be proud of the robust rights we now enjoy. Some have arguably been under siege within the past five years; non-profits and governmental agencies alike have documented many abuses within our country, especially in regard to freedom of the press and of speech and the freedom of assembly. Reform in police practices remains needed, as seen by the numerous unarmed people, especially those of color, injured or killed with little or no provocation.
Authoritarian leaders in numerous other countries rule with gloved fists, and there are little to no separation of powers in their governments to keep their ambitions in check. A citizen may create a satirical cartoon or make a joke about an unpopular leader in power, and the cabal in power will then reflexively come after that individual with extreme prejudice, smearing reputations, doxxing and holding relatives and friends hostage, etc. The dictator’s appetite for “risk” of this kind is sadly lacking.
Too many people in some countries find themselves suddenly unemployed and ostracized, before a judge, facing fines, imprisonment, or may just be “disappeared” — extraordinarily rendered to the backside of the desert or tundra — with no justification or information given to grieving loved ones. If they don’t succumb, they may be returned to polite society months of years later in poor physical and mental shape as examples of why those who make the rules are not to be opposed. I am thankful most of our leaders have a thick skin and can take well-deserved criticisms without resorting to lawsuits, intimidation or worse extralegal means of retribution.
The authors of POLITICAL RISK have written a definitive work on how organizations and people alike can anticipate and manage during global insecurity. Understanding how to prioritize, grade sources of information, and execute your plan, will make a crucial difference in your future.
Quotations noted as such, and tables of information are Copyright © 2018 by Condoleezza Rice and Amy Zegart.
All other commentary is Copyright © 2018, 2020 Darin Allen Newberry and shared under the terms of https://creativecommons.org/licenses/...
###
NOTE: This article does not necessarily reflect opinions of the FedEx Corporation or my fellow employees; I wrote it in a personal capacity on my own time as a business writing sample.
This book remains timely because of the political climate in our nation, and offers a framework for collecting data on risks organizations and people face, analyzing that data and then acting in prudent ways. “The goal of political risk analysis is not to predict the future. Nobody can do that. The goal is to create better decisions for your organization by developing insight about key drivers and possibilities” (pg. 169). “Good political risk management mostly comes down to focus” (pg. 75).
There are some leaders who have obtained their positions through a careful vetting of candidates for the job, by stress testing in activities designed to measure their cognitive abilities, independence or interdependence on others, communication skills, and other relevant criteria. They may have tried two or three times to get to that place, but the vicissitudes of life and prevailing circumstances kept hobbling them, sidelining them.
Others with charisma and serial entrepreneurial experience have amassed a coalition of people willing to follow them, to overlook certain — or many — glaring deficiencies, and by domination or manipulation of trusted communication channels, they ignited a chain reaction that propelled them over the finish line in first place. Character is magnified, not just made, following a promotion with more responsibility, visibility and power. Whatever you were lacking when you arrived, will still be lacking unless you have people around you to help identify areas improvements can be made, and you and the team compensate for weaknesses and major on strengths, with as much effort and humility as you can.
“Tripwires are systems that identify what information to look for in advance. Protocols make clear what steps should be taken by whom when the tripwire gets crossed…(pg. 207). In the most general sense, tripwires may include laws, policy statements, common-sense expressions of best practices, and combinations of physical and online technologies that set the protocols into motion. When somebody sets off one of these, or crosses that line in the proverbial sand, depending on the severity of the occasion, consequences more resolute than a slap on the hand must occur if a lesson is to be learned and loss to the property or organization is to be avoided.
Forward deployment means working closely with each business unit, understanding its priorities, pain points, and communicating political risk perspectives to executive audiences so the political risk is baked in, not bolted onto decision-making as an after-thought (pg. 183). A component baked in is blended and fused with the other components, whereas one bolted on is auxiliary, considered an outsider and less central to the functioning of the system.
There are numerous news clipping services and intelligence briefings compiled from analysts and consultants in various disciplines that may be subscribed to. “Companies on the front lines of managing global political risk have developed in-house threat assessment units staffed with former intelligence and law enforcement professionals” (pg. 205). Think of them as private mini-CIAs that gather and interpret massive amounts of rapidly changing information for their executives to absorb and act on. The authors mentioned something that is public knowledge, that FedEx Corporation has a former NSA Deputy Director on its Board of Directors, who is on three committees, including Information Technology Oversight.
The authors of this book are uniquely qualified to speak to the issue of how political actions affect business. As a former U.S. National Security Adviser and U.S. Secretary of State who impacted thousands, if not millions of people, as she analyzed and acted on classified intelligence, Condoleezza Rice also has thirty years of academic association with Stanford University. She now serves as the Denning Professor in Global Business and the Economy and teaches political science courses at Stanford, as well as being the Thomas and Barbara Stephenson Senior Fellow on Public Policy at the Hoover Institution.
Dr. Zegart was a management consultant at McKinsey and Company before serving as the co-director of the Center for International Security and Cooperation, the Davies Family Senior Fellow at the Hoover Institution, and a senior fellow at the Freeman Spogli Institute for International Studies at Stanford University.
The authors say that risk management is a cost center that sometimes is hard to justify to executives and shareholders. “Cyber protection measures, legal teams, risk officers — these functions produce no revenues” (pg. 84), so this begs the question: was Benjamin Franklin right about a penny saved being the same as a penny earned?
“People who don’t pay attention to political risk who have any vulnerability to it, ignore it at their peril,” warns Frederick W. Smith, Chairman and CEO of FedEx Corporation (pg. 12). “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,” Smith said in praise of POLITICAL RISK (quote on back cover).
Providing assurances using probability theory is the work and plaything of insurance actuaries, betting bookies in Las Vegas, and meteorologists, who will crunch the numbers and throw the dotted bones to discern the likelihood of everything, from what horse or dog to bet on, who are profitable choices for marketing health, property and life insurance to, to whether freezing rain or clouds with meatballs are in the weather forecast this coming weekend. It is part art, part science, with arguably some alchemy mixed in.
Leadership of any sized organization, whether public- or private-sector, whether a government or a family, must manage their risk exposure. Operational, public relations, legal, human resources, and every other stakeholder group must be proactive in identifying new and changing threats and opportunities. This matrix with three questions related to each of the four steps an organization must take in regard to political risk is found on page 107 [hardcover], and also on https://imgur.com/a/8tn4CDJ.
After failure, [business] postmortems reveal all sorts of information that could have been shared beforehand but wasn’t…A 2009 survey by [Darcy Steeg Morris and] the Cornell University Survey Research Institute found that 53 percent of respondents admitted they never spoke up about an idea or problem. When asked why, many said they thought it would be a waste of time or could hurt their careers” (pg. 236, 237).
Having an anonymous reporting system for whistle blowers to use, can provide organizations with valuable information located in blind spots or held in fiefdoms’ information silos, while protecting the individual sounding the alarm on some questionable or heinous activity. Some people want things to get better but do not want their names attached to new initiatives or bold ideas that feel counter-cultural, so to avoid political baggage, they lobby from the shadows. A lot of good can happen if you’re not too particular about who gets the credit, it has been said.
Many companies are part of industries with associated non-profit bodies that gather feedback from all levels of companies, their vendors and customers, and produce insightful reports. More than one employee has run afoul of bosses and reputational management types in their company when given the task of responding to one of these third-party surveys. They were given a time and place to do it, known to management, and video and snag-it images from the employees’ sessions on company computers were retained. Anything that looked like a rant against existing conditions or was a middling rather than strong positive candid evaluation, would be frowned on by higher-ups and decisions would be made to selectively enforce certain rules and regulations governing the employees’ conduct.
H.R. may be directed to set speed traps, if you will, and be ready to document those ill-favored people all the way onto the street with signed severance, non-compete and non-disclosure forms, thank you very much! Sometimes sexual temptations and items of value were made available in an entrapment fashion, and if wrong choices were made, leverage against employees was gained, where people could be “owned” or disowned with quick quiet exits obtained. While still within the companies, those employees kept overhearing conversations designed to provoke a fight-or-flight response, or “information” and water cooler gossip that would help discredit whoever repeated it.
Remaining average, like an unlabeled commodity, without distinctive characteristics or passion for one’s work, seems to me more likely to get somebody passed over for promotion, or facing a cut in hours or a work layoff. “If a man is called to be a street sweeper,” Dr. Martin Luther King Jr. told us, “he should sweep streets even as a Michelangelo painted, or Beethoven composed music or Shakespeare wrote poetry. He should sweep streets so well that all the hosts of heaven and earth will pause to say, ‘Here lived a great street sweeper who did his job well.’”
“Rewarding courageous acts fosters a premortem culture — encouraging people in the organization to volunteer information about what could go wrong before it does go wrong” (pg. 236, 237). Hindsight is 20/20, they say. To think critically about opportunities and problems in front of us, where we add value and energy rather than drain it out of the room, will distinguish us from practitioners of mediocrity and bring us to the attention of those in charge (Proverbs 22:29).
Chances are excellent the Company knows everything about what its employees, customers and vendors are doing on its equipment and networks, especially if they brush up against one of the tripwires. At that point, the relevant protocols will be started and somebody will get schooled about using best practices on work-related computing devices, or receive discipline that could involve loss of responsibilities, dismissal or legal action.
FedEx’s entrepreneurial Mr. Smith is generally considered to have an above-average appetite for risk in making business decisions, enabling some groundbreaking, even gravity-defying innovations along the way. Just as he was ahead of many companies in investing in IT infrastructure and the means to protect the Company assets it connects, he invested in the school-to-work pipeline in Memphis, partnering with the University of Memphis to create the FedEx Institute of Technology. Students — some with advanced degrees — work on many emerging technologies across scientific and technical disciplines, and FedEx’s sponsorship gives it the right of first refusal in licensing deals for patents and trademarks developed.
Americans should be proud of the robust rights we now enjoy. Some have arguably been under siege within the past five years; non-profits and governmental agencies alike have documented many abuses within our country, especially in regard to freedom of the press and of speech and the freedom of assembly. Reform in police practices remains needed, as seen by the numerous unarmed people, especially those of color, injured or killed with little or no provocation.
Authoritarian leaders in numerous other countries rule with gloved fists, and there are little to no separation of powers in their governments to keep their ambitions in check. A citizen may create a satirical cartoon or make a joke about an unpopular leader in power, and the cabal in power will then reflexively come after that individual with extreme prejudice, smearing reputations, doxxing and holding relatives and friends hostage, etc. The dictator’s appetite for “risk” of this kind is sadly lacking.
Too many people in some countries find themselves suddenly unemployed and ostracized, before a judge, facing fines, imprisonment, or may just be “disappeared” — extraordinarily rendered to the backside of the desert or tundra — with no justification or information given to grieving loved ones. If they don’t succumb, they may be returned to polite society months of years later in poor physical and mental shape as examples of why those who make the rules are not to be opposed. I am thankful most of our leaders have a thick skin and can take well-deserved criticisms without resorting to lawsuits, intimidation or worse extralegal means of retribution.
The authors of POLITICAL RISK have written a definitive work on how organizations and people alike can anticipate and manage during global insecurity. Understanding how to prioritize, grade sources of information, and execute your plan, will make a crucial difference in your future.
Quotations noted as such, and tables of information are Copyright © 2018 by Condoleezza Rice and Amy Zegart.
All other commentary is Copyright © 2018, 2020 Darin Allen Newberry and shared under the terms of https://creativecommons.org/licenses/...
###
NOTE: This article does not necessarily reflect opinions of the FedEx Corporation or my fellow employees; I wrote it in a personal capacity on my own time as a business writing sample.
March 10, 2019
Risk analysis is an elusive discipline. Politics is pervasive but equally hard to predict. Political risk analysis is thus expected to be simply incomprehensible. United States former National Security Advisor and Secretary of State Condoleeza Rice teaches a course at Stanford University along with her colleague Amy Zegart who actually is a scholar of US Intelligence. The course however is not for students of politics or security for Business. Who else has more at stake if the political environment turns out to be chaotic, unpredictable and damaging generally as well as specifically? The Book , Political Risk ; How businesses and Organizations can anticipate Insecurity, is a product of the course taught to MBA students. Its utility however extends to anyone interested or related in the business of predicting and preparing for future uncertainties in future , be it states , government agencies , political parties and of course business entities.
The word ‘Political’ is deceptive due to its simplicity and common use. In fact it is not restricted to the politics but includes all public. Same has been the dilemma of Political Science. The Political risk is thus the “probability that a political action could significantly affect a company’s business”. The distinction of political action and government action is to be noted also. The government actions are just a segment of political actions which now span the fields of journalism , civil society and now social media , action which can be of effect directly or through publicity. In short to quote the philosopher sage of our time Hebermas, “publicity continues to be organizational principle of our political order”. All these actions thus take place within the public sphere , comprising of all those who can affect the public behavior. The analysis itself has dual objectives; to predict the time and extent of a certain political action, simple enough to state, not so in practice.
The framework of political risk analysis is simple and well understood. It comprises of four phases of understanding, analyzing, mitigating and responding. The understanding concerns the systems’, the organization’s and businesses’ reflection and risk appetite. This is an introspection part where the stakeholders have to see where they stand in comprehending the political risk. Mostly this reveals huge blind spots. Next comes analysis part. This concerns the external factors; the risk drivers, general and specific information, the knowledge of country/sector/field/factors. Then the action part; avoiding the risk without compromising the task in hand. The best risk mitigating strategy is of course flight , not do anything and to avoid bad news. Both governments and businesses do not have that choice though. The final phase comes into plan when the bad wishes come true and the crises strikes. Even then the learning does not stop. Simply because the show has to go on and big organizations and businesses have to scramble again.
Who cause political risk ? There are five types of actors. Firstly there are individuals who are more empowered through social media , twitter and facebook. There was one individual who kicked off Arab spring, one journalist who broke Panama scandal and one assassin who unleashed neo-extremism by sh0ot down a governor. Then there are local organizations , the NGOs and civil society , the religious and ethnic groups. The MeToo movement has spread from local links. Now businesses have to pay attention to such issues. No business can survive without developing ant-harassment and anti-discrimination apparatus. If they don’t, they run huge risk of being in the face of firing line any time. The national governments and their institutions are a big source of political risk. Modern state is a regulatory state and the regulations are not driven by economic factors. Then there are transnational groups, both positive and negative. There are terrorists with their nefarious agendas and there are environment activists with aim to make world a better place. Finally there are supranational and multilateral institutions like UN, EU, IMF and OECD. We are seeing the impact of FATF and its actions in response to money laundering. The businesses have to see the kind of risk various outcomes from these actions.
Next, what are the various possibilities of political risk ? One can ask what worse can happen. Well, plenty. To start with there can be wars, and not just wars but build up to wars. We have seen that too recently. Then there can be internal disturbances ranging from social unrest to ethnic violence, and revolution to coups. On the legal side, the law and regulations keep on changing, and not for the legal reasons most of time. Even if the laws and rules are changed, they can be broken and contracts reneged, even assets expropriated. Corruption is a big risk driver, a source of uncertainty about cost and time. Many countries have now extraterritorial jurisdictions and companies do not know which law being breached at an unrelated territory. Any business related with natural resources comes with distinct sets of risk. The political actions arise out of collective action when events “go viral”. The United Airlines paid huge price for dragging just one Chinese passenger off the plane. Many ads go wrong and hurt businesses. The subversion be it in the form of terrorism or cyber attacks is also a constant risk.
Political risk management is hard to reward, hard to understand , hard to measure, hard to update and hard to communicate. So what to do ? . There are two options , either leave the future to chance or manage the risk. Individuals have liberty to be fatalists but not the businesses and organizations. Analysis is the essential part of risk management - again easier said than done. The key is to get ‘good’ information and that does not come from Google , or even the usual suspects like country or sector reports , or the data by world bank and IMF. Good information comes from asking good questions which result in specific answers which in turn not only contain facts but perceptions as well. Good information forms the basis of rigorous analysis which is all about avoiding traps , developing tools and forming teams. The last being the devils advocates but those coming up with reason and not just flying arrows in air. There is also scenario planning and backward thinking. The tools can also be qualitative as well as quantitive. The objective is not scaring but better decision making.
Most of the decision-making in the corporate as well as public sector is based on economic risks without realizing that non-economic and non-quantifying factors are biggest source of uncertainty. Many qualified and suave managers struggle , falter and fail when it comes to acknowledging political risks. Public sector is more confident and more dismal in risk management. Those responsible for the well-being of societies and future generations are no less than fire fighters and even bad at that. Political risk management is an evolving and crucial field and the work by Condi and Amy shows the direction. It is not at all exhaustive, even repetitive but framework is important and the concepts are relevant and necessary for any decision maker.
October 16, 2020
4/10
The fact that Rice is a stalwart fan of the Cleveland Browns will always bias me towards her to some degree, her writing, unfortunately, does not.
To be fair, this was not actually written by Rice, as most of the 'writing' was done by Amy B. Zegart based on conversations with Rice, and Rice's political risk course. You can sort of tell that this was adapted, especially considering how often the reference the course, which can be a little jarring, as if the book was an afterthought.
Essentially the point of the book is to evaluate changing political, especially geo-political landscapes, when looking at businesses plans. Rice contends that this is an aspect of risk that has been traditionally, an afterthought. She seeks to rectify this with examples of its importance from case studies. In using Sea world however, she rather misses the mark in my opinion, as the negative response was primarily based on a public relations fiasco rather then any political maneuvering. The public tanked Sea World for a time, not any political action. Still, the effect that government has on business cannot be understated, and is often taken as a given, rather then a dynamic and changing foundation. It is this perspective that Rice and Zegart attempt to give their audience.
The fact that Rice is a stalwart fan of the Cleveland Browns will always bias me towards her to some degree, her writing, unfortunately, does not.
To be fair, this was not actually written by Rice, as most of the 'writing' was done by Amy B. Zegart based on conversations with Rice, and Rice's political risk course. You can sort of tell that this was adapted, especially considering how often the reference the course, which can be a little jarring, as if the book was an afterthought.
Essentially the point of the book is to evaluate changing political, especially geo-political landscapes, when looking at businesses plans. Rice contends that this is an aspect of risk that has been traditionally, an afterthought. She seeks to rectify this with examples of its importance from case studies. In using Sea world however, she rather misses the mark in my opinion, as the negative response was primarily based on a public relations fiasco rather then any political maneuvering. The public tanked Sea World for a time, not any political action. Still, the effect that government has on business cannot be understated, and is often taken as a given, rather then a dynamic and changing foundation. It is this perspective that Rice and Zegart attempt to give their audience.
May 23, 2018
A master class in analyzing and mitigating risk. A must read for political professionals as well as C-suite executives. Brilliant work.
May 14, 2018
Soectacular book!! Must read if you are in management and/or work with governments. Much to learn from these amazing authors!!
April 1, 2021
I enjoyed this work co-authored by former Secretary of State Dr. Condoleezza Rice and Dr. Amy Zegart of Stanford University. This work, published in 2018, grew out of a course they co-taught for MBA students on the matter of political risk. I appreciate how they used the phrase “political action” and not “government action” to highlight the increasing role of drivers far beyond the Cold War horizon scanning of actions in military barracks and within a party headquarters that delivered shocks to markets. The discussion of company culture within firms who were deemed sound in approaching political risk and those that fell short was interesting. Investing in this function within a business certainly brings cost and does not generate revenue, but when done systemically it can help a company avoid mistakes that bring tremendous risk to their reputation and bottom line. The various cases were fascinating throughout the book from revisiting the Congressional reaction that made the DP World acquisition of the British firm P&O untenable despite it clearing the CFIUS process to the early adopters of scenario planning at Royal Dutch Shell to adapt to the oil shocks of the 1970s.
March 29, 2019
A brilliant business and organizational case study offering by two powerhouse Stanford Hoover Institution scholars, Condi Rice and Amy Zegart. In setting out to research cases on political risk, particularly from Harvard Business School and elsewhere, they found a dearth of info and decided to do their own as grist for a course for the Stanford Business School. Well researched with solid and easily followed frameworks, they methodically apply several cases (BP Deepwater Horizon, Sea World trainer deaths (remember Blackfish?), United Airlines dragging off a passenger, Tylenol tampering scare, etc.) to their framework. If nothing else the framework and cases demonstrate the need for effective scenario risk planning and strategies to hedge against the possible and to react to the potentially inevitable negative publicity no organization is immune. An excellent read!
March 27, 2022
I came to this book with high expectations given that claims to offer "a first-of-its-kind framework that can be deployed in any organization, from startups to Fortune 500 companies", but found the overall result somewhat disappointing. The book is well structured with key takeaways from each chapter and I enjoyed the emphatical call it makes for businesses to take political risk seriously. However, the examples are quite repetitive and the analytical framework lacks rigor. Large parts of the book are dedicated citations of executives talking about how well their company does in addressing political risk, and it would benefit from more diverse examples of political risk, especially beyond security and cybercrime issues. Overall, an interesting read that provided some new insight and anecdotes about political risk, but definitely targetted to a more casual business audience.
October 10, 2018
This is an interesting book that introduces the subject well, beginning with understanding political risk and then how to analyse it. It concludes with mitigants and response mechanisms. Examples used to highlight the concepts come from the hospitality, entertainment/ theme park and logistics industries. Overall, it could have been better as some examples were used over and over again for a greatbportion of the book. The best parts were later when other case studies such as the BP spillage, the Tylenol poisoning episode and the NASA disasters were cited. More theory could have been worked into the chapter on analysing political risk with numerical examples to demonstrate how some companies quantify political risk. Otherwise, its well worth the read.
January 10, 2020
A solid overview of the way geopolitics and social activism can impact businesses and organizations. The book centers a handful of companies including FedEx, United Airlines, SeaWorld, Royal Caribbean, and Lego, treating particular events as running case studies throughout the book. While this can make the text repetitive at times, the focus also allows Rice and Zegart to explore the different ways political risk played out in each company's crisis moments. Recommended for students or newcomers to the topic of political risk, but those already in the field might find it simplistic and repetitive.
3.5/5 stars
3.5/5 stars
August 16, 2018
An excellent survey course on political risk management, how governments and other politically motivated actors can impact a business. Secretary Rice provides case studies which include Fed Ex, BP Petroleum, Sea World, the US State Department, and a variety of other companies and businesses, operating domestically and abroad. There was even an anecdote about Ms Rice playing piano accompaniment to Aretha Franklin and how Ms. Rice had to improvise. I look forward to reading more from her and hoping that she re-enters public life in the future.
June 8, 2019
This book has little to do with anything in my own immediate sphere of life and work. Despite that fact I found it to be an interesting book. I like knowing how things work, especially when I don’t know much about the “thing.” In this case, businesses large enough to encounter political risk are out of my range, but I find it fascinating to read about problem/solutions that arise in the global world. So, while I’m not going to Stamford for an MBA, I thought this book was a fairly straightforward and informative read.
March 27, 2020
Drs. Rice and Zegart do not fail in capturing and keeping a readers attention. There is a lot to consider, not just amid the political landscape most have come to picture, but amid generalized management considerations as well. If, after reading this book, a manager doesn't feel the need to consider the "political" ramifications of not tuning into overall strategic implications something is wrong with his thinking. Given that, this book is a good read for an array of disciplines. Well worth the time spent page after page.
September 24, 2020
The P of a PESTEL analysis seldom carries weight beyond generic one sliders, but it actually an important part of determining Country Risk.
A not so technical book, it is a brief primer on what constitutes Political Risk. You wouldn’t learn what goes in assessing sovereign ratings, but may just garner a broad understanding on how political risk impacts broader corporate strategies.
Few good examples, although the same examples are quoted like scriptures again and again, without much variation.
A not so technical book, it is a brief primer on what constitutes Political Risk. You wouldn’t learn what goes in assessing sovereign ratings, but may just garner a broad understanding on how political risk impacts broader corporate strategies.
Few good examples, although the same examples are quoted like scriptures again and again, without much variation.
Read
May 17, 2023I read this book as assigned reading for a grad school class on political risk. This book was interesting in its use of case studies but felt repetitive by the end. I did appreciate that although the writing is approachable it is well written. Not always the case with a self-help type book.
It was thought provoking and a great primer on the types of risks and concerns companies and policy makers should take into account to mitigate risk. Worth the read if that subject is of professional or academic interest.
It was thought provoking and a great primer on the types of risks and concerns companies and policy makers should take into account to mitigate risk. Worth the read if that subject is of professional or academic interest.
July 5, 2018
This book grew out of a short course taught for Stanford MBA students. The two authors are not from the business faculty, but experts (and for Professor Condoleezza Rice, a former practitioner) in international relations. Through a series of recent incidents, they explain why it is vital for organisations need to monitor and be prepared to deal with political risk, and introduce a framework and pointers for being prepared. Necessary reading.
May 28, 2018
I found the material extremely informative even though I'm slightly familiar with the domain from government and corporate professional experiences with disaster and business continuity planning. Some of the repetition reminded me this book came out of graduate level teaching experiences.
All in all, it kept my interest and gave me much to reflect and ponder on.
All in all, it kept my interest and gave me much to reflect and ponder on.
September 26, 2019
Caught somewhere mid-way between textbook and memoir and not entirely satisfying on either level, a flaw compounded by frequent lapses into an overly chatty, millennial-style prose. Contains some good insights but also, in common with much of this kind of writing, a fair bit of stating the bleedin obvious at excessive length.
May 25, 2022
Covering some of the bigger scandals in the political/PR realm, the book offers business personnel a chance to adapt strategies. However the book is short of examples, and I think is better paired alongside the promoted course it stems from. Still a nice review at the last tens years of pr political nightmares.
July 6, 2025
The only reason that this book is popular is because it has Condi’s name on it. I’m still not sure if they meant for this to be a book of case studies or a “how to guide” to manage political risks. Seems like they were torn between the two which made the book seem less cohesive and lack a wow factor.
June 13, 2018
The book's definition of political risk is too wide, eg almost everything outside of business risk. It's like a primer on non business risk by a consultant. It's a decent book but when i picked it up, i was hoping for a more focus on the real political risk in a narrow sense.
October 23, 2018
A must read for leaders
How do you prepare your company for the unknown? By reading this book and taking its advice to heart. The better one understands risk, the better one can prepare for it and respond to it.
How do you prepare your company for the unknown? By reading this book and taking its advice to heart. The better one understands risk, the better one can prepare for it and respond to it.
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