During any election season, results can have vastly different outcomes, any of which may have a huge impact on the business environment due to potential changes in policies, regulations, and economic conditions. This year, the two US presidential candidates represent a political environment that seems more polarized than ever. On top of that, recent developments in the presidential campaigns are causing even more volatility. Because of the upheaval election outcomes can cause, there are five considerations for preparedness that your business should take to adapt to potential changes in the business landscape during and after an election season:
1. Monitor Candidate Policy Proposals
It may go without saying: because national policies can affect costs, operational requirements, compliance requirements, and market conditions, businesses of all sizes should stay informed about the policy proposals of candidates, especially policies related to taxes, trade, labor laws, healthcare, and industry-specific regulations.
2. Conduct Scenario Planning
Scenario planning, always a valuable exercise, is more important now than in recent months. Companies should develop different business scenarios based on potential election outcomes. The primary focus should be on flexibility and adaptability. Gone are the days when a strategic plan was “set in stone” to drive decision-making for 10 years. Although strategic planning should be done regularly and should envision the long term, rigidity is a mistake. For years, strategists have advised about making strategic plans adaptable and flexible.
In your organization’s scenario planning, include an analysis of market strategy. How might an election outcome shift consumer sentiment or market trends. Scenario planning should include marketing and sales strategies and how your organization will align to potential, changing consumer behaviors.
This year, since strategies and plans may need to be adapted quickly once election results are known, scenario planning is vital for responding to new policies or economic conditions.
3. Ensure Risk Mitigation and Financial Preparedness
A comprehensive risk assessment considering potential political, economic, and social changes is important for enhancing resilience in the face of unforeseen challenges. Risk mitigation strategies may need to be updated. Included in this risk assessment is a thorough evaluation of financial preparedness, making sure your organization has a financial cushion to weather uncertainties and market fluctuations. Review financial strategies to ensure liquidity and manage risks. Consider diversifying investments and building cash reserves to navigate potential economic volatility.
4. Anticipate Possible Changes to Regulatory Compliance
A different administration may dictate a vastly different regulatory environment, while a continuing administration may dig in much deeper to continue an evolution to its desired future state. Businesses need to deepen their understanding of current compliance frameworks as well as candidates’ future plans, studying anticipated changes in regulations proposed by both candidates. Depending upon which political party emerges stronger, the compliance landscape may be strikingly different post-election, increasing the risk of non-compliance and associated penalties.
Many of my client organizations have found it valuable to engage with various industry associations, including the associations in industries of their key customers and suppliers. Because these associations not only understand potential regulatory shifts and their implications, but also engage in advocacy and participate in industry coalitions, your company can save time and resources by engaging in them.
5. Assess Supply Chain Management
Perhaps one of the most powerful challenges from the COVID pandemic was its impact to supply chains. As a result of those lessons learned, any organization’s supply chain is likely more resilient now than in 2020. Even so, I recommend evaluating supply chain vulnerability since policy changes, taxes, and tariffs can disrupt supply chains. Are there alternative suppliers with whom you can develop deeper relationships? Are there critical inventory items that should be stockpiled? Supply chain flexibility is a vital link in mitigating risks and keeping costs in check.
This is a volatile election year, perhaps becoming even more volatile this week. By proactively addressing these areas, businesses can position themselves for success regardless of the outcome of the election season. To schedule a complimentary 60-minute session on developing a resilient strategy, please email me or message me in LinkedIn.