Innovation - A Regulatory Strategy
Why Innovation Matters
Public affairs is becoming increasingly complex. Today, professionals can choose from a suite of direct and indirect methods to communicate their message and influence policy proposals (1). This comes at a time when regulation is having a stronger impact on what an organisation can do and how they can make it happen. So what does innovation have to do with public affairs? In that respect, is innovation not just a reaction to the changing political environment – a way to stay ahead of the curve? Why does innovation matter?
The pace of innovation is increasing. Disruptive technology is driving every organisation to be stronger, more agile and competitive. So how does it work? How can organisations use innovation itself as a regulatory strategy? Well it boils down to this. Firstly, innovation encourages organisations to gather political intelligence. Secondly, innovation helps with the development of policy goods. Thirdly, innovation leads to collaboration and the strengthening of coalitions. And fourthly, the pace of innovation trumps the pace of policy change. It is these four elements that are now explored.
1. Gathering Political Intelligence
Let’s start with political intelligence. Innovation systems need an intelligence function. R&D is fundamental to the process and CTOs recognise the importance of this. Understanding the external environment, from market trends to competitive forces, is essential. What does the market need and how can we deliver on this, better than anyone else? These are questions we ask ourselves to encourage innovation.
But regulation is a component of this. When it comes to product design and new service offerings, we must ask ourselves what are the legal requirements? How is the law changing and how can we take advantage of this? These questions are critical to public affairs (2).
Innovation drives organisations to gather political intelligence and a review of the political environment should be integrated into the innovation process. Indeed, this is the starting point of any regulatory strategy. Assessing the political environment puts you in a position to determine your approach and develop your policy position. So let innovation work for you in every respect of the process.
2. Developing Policy Goods
A policy good is information that can be traded for access to policymakers (3). Regulation is complicated and while bureaucrats often understand political priorities, technical information is needed to develop and implement policy proposals.
Innovation puts you in a position of thought leadership, with access to the latest thinking. This positions you as an expert, whose technical understanding and know-how is critical to the process of policy development. Through this, by working as part of a consultative committee or by publishing a position paper, you can leverage your knowledge to help set the political agenda and to influence the policy process (4). Innovation empowers this approach.
3. Communication and Collaboration
Innovation is a collaborative process. It brings people together, who combine skill-sets and resources to make the process work. Often this involves establishing strategic alliances with other organisations and developing partnerships up and down the logistical chain. Through this, ideas are shared and mutual interests are reinforced.
Public affairs is also about communication and collaboration. While individual strategies can be pursued, the development of coalitions around a policy issue help a position to gain traction (5). Policymakers listen to facts, but they listen harder to voices – and when there are many voices in the room, that’s when they really pay attention. The process of innovation increases stakeholder communication and helps to strengthen coalitions as they emerge.
4. The Pace of Policy Change
The world is changing and it’s changing fast. Innovation helps organisations to stay competitive, while policymakers try to regulate for the ever-changing environment. Indeed policymakers are under pressure to keep up and they are finding it increasingly difficult to do so (6). All things considered, the pace of innovation trumps the pace of policy change. Organisations can take advantage of this – using innovation-cycles to outpace regulation. To quote Charles Darwin:
“It is not the strongest of the species that survive, nor the most intelligent, but the one most responsive to change.”
The implementation of regulation is also a lengthy process, giving organisations time to plan in advance. Greenfield projects offer advantages in this regard.
Applying an Innovation Strategy
To harness this approach there are a number of considerations to make. What is your approach to innovation and what is your understanding of the political environment? How does this fit with your overall give year plan?
In essence, making this strategy work is about finding the nexus between corporate strategy, innovation and public affairs – and capitalising on the union between the three. This requires strong communication at the C-suite level and an integrated approach. Ultimately, innovation and public affairs can both be viewed from the perspective of competition and while innovation can lead to new opportunities, policy can change the game.
References
Hanegraaff, M., Beyers, J. & De Bruycker, I., 2016. Balancing Inside and Outside Lobbying: The Political Strategies of Lobbyists at Global Diplomatic Conferences. European Journal of Political Research.
Rasmussen, M.K., 2015. The Battle for Influence: The Politics of Business Lobbying in the European Parliament. Journal of Common Market Studies, 53(2), pp.365–382.
Broscheid, A. & Coen, D., 2007. Lobbying Activity and Fora Creation in the EU: Empirically Exploring the Nature of the Policy Good. Journal of European Public Policy, 14(3), pp.37–41.
Bouwen, P., 2002. Corporate Lobbying in the European Union: The Logic of Access. Journal of European Public Policy, 9(3), pp.365-390.
Klüver, H., 2012. Lobbying as a Collective Enterprise: Winners and Losers of Policy Formulation in the European Union. Journal of European Public Policy, 20(1), pp.59-76.
Drüner, D. et al., 2016. The Core of the Winset? Explaining Decision-Making Duration and Policy Change in the European Union. Comparative European Politics, pp.1–19.