Shaping Policy as a Competitive Advantage
There was a time when businesses could afford to treat government as something happening somewhere else - regulators made the rules, politicians debated them, civil servants implemented them, and businesses responded.
That model is becoming increasingly difficult to sustain.
For companies operating at global scale, policy is no longer a framework within which business happens, policy is increasingly part of the competitive landscape itself.
A change to regulation can determine which technologies reach market, a new industrial strategy can redirect billions in investment, a change to planning policy can determine where infrastructure is built, trade restrictions can reshape supply chains overnight, tax policy can alter the economics of an entire sector, and environmental regulation can create entirely new markets while making existing business models unviable.
The consequence is uncomfortable but increasingly difficult to ignore, for the companies that understand how to shape the policy environment may gain an advantage over those that merely respond to it.
This is not an argument for opaque influence or regulatory capture, quite the opposite. Legitimate lobbying and stakeholder engagement are recognised as part of democratic policymaking, provided they operate within appropriate standards of transparency and integrity. The OECD's latest work continues to distinguish between legitimate corporate engagement, which can provide policymakers with valuable expertise, and undue influence that can distort competition and public decision-making.
The distinction matters, because corporate public affairs should not be about getting a company what it wants, it should be about ensuring that the people making consequential decisions understand what those decisions actually mean. The result? Influence.
The traditional corporate strategy model tends to focus on familiar sources of competitive advantage. Whether that be capital, technology talent, brand, distribution, or scale.
There is another variable sitting outside the traditional strategy deck - the regulatory environment.
Governments increasingly use regulation not to police markets but to shape them. Industrial policy, national security, energy transition, artificial intelligence, semiconductor manufacturing, infrastructure, data, financial services, healthcare and critical minerals are all examples of areas where government decisions can actively determine the direction of markets.
The OECD has noted that regulation can materially affect cost competitiveness, innovation and international competitiveness. Its recent work also argues that as governments make greater use of industrial policy, the quality and integrity of interactions between policymakers and interest groups becomes increasingly important to maintaining competitive markets. That changes the strategic equation.
If government policy can influence the economics of your industry, then understanding government policy is part of understanding your market, and if policy is part of your market, public affairs cannot remain a peripheral communications function.
It belongs much closer to strategy.
Undoubtedly, the word lobbying still carries baggage.
For some, it conjures images of closed rooms, expensive dinners and well-connected intermediaries whispering into the ears of politicians, but that is an increasingly inadequate description of modern influence.
Policy is shaped through a much broader ecosystem. Parliamentarians, ministers, civil servants, regulators, trade associations, think tanks, academics, NGOs, industry coalitions, journalists, communities, customers, and of course, public opinion.
The OECD explicitly recognises that modern lobbying and influence extends beyond direct communication with public officials, encompassing public communications, social media, research organisations, think tanks, expert groups and other channels capable of shaping the policy debate.
The sophisticated organisation therefore doesn't ask: “Who do we need to lobby?”
It asks: “What is the system through which this decision will be made, and where can legitimate influence be exerted within it?”
That is a much more strategic question.
One of the most persistent failures in corporate public affairs is timing.
A government announces a consultation, or a company discovers that proposed legislation could materially affect its business. A policy team is assembled, meetings are requested, a response is submitted, and an organisation begins lobbying.
By then, much of the argument has already been shaped. The language, the political narrative, the stakeholder positions, and the available options narrow. Now, the organisation is no longer helping shape the question, it is attempting to change the answer.
The most valuable influence happens before there is anything to lobby against.
That means identifying emerging policy before it becomes legislation. It means understanding political priorities before they become government announcements. It means contributing evidence while options are still being developed.
It means being present at the point where the problem is being defined, not when the solution is being presented.
That requires intelligence, and intelligence is where public affairs becomes strategic.
The most effective public affairs operation is not necessarily the one with the largest network of political contacts, it is the one that understands the environment most accurately.
Who has formal authority? Who has informal influence? Who is driving the policy? Who is resisting it? What evidence is shaping the debate? Who creates this evidence? What does the government need to demonstrate? What political pressures are operating behind the scenes? Which stakeholders are aligned or opposed?
Perhaps most importantly: What does success actually look like?
These are intelligence questions before they are lobbying questions. A company that understands the system can make better interventions, and a company that does not understand the system can spend enormous amounts of money being visible without being influential.
Access is not influence. Getting into the room is not the same as changing what happens in the room.
There is another misconception worth challenging.
Many businesses assume that effective public affairs means making their position impossible to ignore, it doesn't.
Policymakers are not waiting for another company to tell them what it wants, they are trying to solve problems.
The most valuable corporate contribution is therefore not: “This policy is bad for us."
It is: "Here is what this policy is trying to achieve. Here is the evidence about what will happen in practice. Here are the unintended consequences. Here are the people affected. Here are the alternatives. Here is a solution that could achieve the same objective more effectively."
That is a completely different proposition, and it moves the organisation from interest group to source of intelligence.
This is where credibility becomes an asset, where a company that consistently provides policymakers with useful, credible information earns something more valuable than a meeting.
This is also where corporate reputation and public affairs increasingly converge.
A company cannot spend years behaving irresponsibly and then expect policymakers to treat its intervention as authoritative when a major regulation threatens its interests. Both influence and relationships are cumulative.
The companies that are taken seriously during a crisis or major policy debate are often the companies that have spent years demonstrating that they understand the wider environment in which they operate.
That means public affairs cannot be switched on when legislation arrives, it has to be built beforehand. The same principle applies to coalitions.
One company arguing for something can be dismissed as self-interest, but an industry, workforce, academic community, consumer group and regional economy presenting a coherent evidence base is considerably harder to ignore.
This is why sophisticated public affairs is increasingly about coalition architecture.
There is an important line here. Influence without integrity becomes a liability.
If influence becomes an attempt to distort policymaking, conceal interests or secure advantages unavailable to competitors, it stops being strategic public affairs and becomes a governance problem.
The OECD's 2026 analysis is particularly clear that lobbying can provide valuable expertise to governments while inadequate safeguards can create opportunities for undue influence, distort competition and undermine trust.
For major corporations, that distinction matters more than ever. The bigger the company, the greater the scrutiny, and the more politically consequential the sector, the greater the reputational exposure.
The more successful the public-affairs operation becomes, the more important its governance needs to be.
The future of influence therefore cannot be about more access, it has to be about better evidence, greater transparency, stronger integrity and a clearer understanding of the public interest.
That is not a constraint on effective public affairs, it is what makes effective public affairs sustainable.
Policy is very much becoming part of the competitive battlefield.
For a corporation, they have to understand government early enough to incorporate political and regulatory dynamics into its commercial strategy.
Imagine a technology company that knows a major AI regulation is likely to emerge but does not understand the government's underlying concerns, or a pharmaceutical company that only begins engaging policymakers once the framework governing its market has effectively been designed.
In each case, the company may still have excellent lawyers, communications teams and government relations professionals, but it is still operating reactively, and reactive influence is expensive.
The strategic advantage belongs to the organisation that sees the policy trajectory early enough to adapt its business strategy - and, where appropriate, contribute meaningfully to the direction of travel.
So the boardroom must ask: Who is shaping the rules of our market?
It forces executives to look beyond competitors and customers towards policymakers, regulators, political priorities, public sentiment and emerging legislation. It turns government from an external stakeholder into part of the strategic environment, and it reframes public affairs from a communications activity into a form of competitive intelligence.
This is the shift we believe businesses need to make, a shift towards understanding how power moves and flows.
Who influences whom, when decisions become vulnerable to change, which arguments carry weight, when a policy window opens and when it closes.
The greatest strategic mistake a company can make is assuming that the rules of its market are fixed, they are not. Rules are written, rules are amended, rules are challenged, and sometimes, rules are rewritten entirely.
The companies that wait for that process to finish will spend their time adapting to decisions made by others, but the companies that understand the machinery of influence can contribute to what comes next. That does not mean buying influence, it means earning the credibility to participate in the conversation, and for businesses operating at global scale, that distinction may become one of the most important competitive advantages of the next decade.