The Resolution

How to deal with the government when everything goes wrong

There is a huge gulf between politics and business. As someone who’s lived in both worlds it sometimes feels like I’m an interpreter, trying to bridge the gap between two mutually incomprehensible languages.

Get an unfair advantage

The best from The Resolution, delivered to your inbox every month.

There is a huge gulf between politics and business. As someone who’s lived in both worlds it sometimes feels like I’m an interpreter, trying to bridge the gap between two mutually incomprehensible languages.

In countries such as the US, there’s a lot of cross pollination between the two sectors so there’s less need to build a bridge between them, but in Australia we haven’t even begun to build the piled foundations. Both have been dealing with each other at a very superficial level for too long.

The reality is that directors and politicians have a lot more in common than they realise. They’re both responding to pressures from a diverse group of stakeholders and trying to do the right thing for them all.

To get the best result both parties need to work together and understand each other’s perspectives. Here’s some tips based on my time straddling the worlds of business and government.

1. Strong relationships are built on mutual respect

To engage politicians it’s important that the company opens up a regular dialogue, not just approach them when it’s in their immediate interests. When you’re deep in damage control, it’s too late to start scrambling to get politicians on side.

The real opportunity to manage your risk comes much earlier. It comes by building a relationship with politicians that is built on mutual respect. Mutual respect between the boardroom and parliament is built on the same foundations as every other professional relationship. It’s about sharing information and taking time to understand each other’s perspectives.

2. Don’t preach politics to politicians

By far the biggest mistake that Australian companies have made when dealing with government is trying to preach politics to politicians, or worse, employing grubby tactics. Trying to win over a politician by wining and dining them or telling them what will win them more votes is a superficial and transactional way of approaching them.

Remember that politicians are experts in understanding the political implications of their actions. It’s not always evident, but there are political dimensions to almost everything, and the core responsibility of every politician is to make a judgement about what’s right for our country.

Ultimately, as a business leader your job is to persuade me on the merits of what you want me to do. And as a political leader, my job is to worry about the political implications of that and whether I can get away with it.

Whatever you do, don’t condescend to anyone in politics by telling them that your course of action will lead to "more votes".

3. Share information to create a depth of understanding

Boards have access to information and knowledge that politicians don’t, so share these resources and help them understand your perspective.

Similarly, it’s important for boards to understand the perspective of politicians. There aren’t too many serious board members living in Charters Towers or Kalgoorlie, but politicians are accountable to these areas as well and they must take their perspective into account when making policy decisions. Keeping this in mind and putting yourself in the shoes of politicians can give you another perspective on what shapes their decisions.

Explain why your proposed course of action is a good thing. If the proposal you’re pursuing will be good for wealth creation, for jobs, for the standard of living of the wider community, then articulate that clearly. As a business leader your role is to identify ways to make money, create wealth, and employ people. The politician’s expertise is in dealing with these and determining what the broader political implications will be.

4. Never be shy about self interest

In approaching government you should never be shy about self-interest. There is nothing wrong with self-interest as long as it’s transparent.

I would often say to corporate leaders when I was Finance Minister, “Just because the proposal you’re putting to me is in your self-interest does not mean it’s wrong. When I’m reviewing the proposal I will deal with it on a basis of whether I think it’s right or wrong, not discount it because it’s in your self-interest”.

So don’t be frightened by self-interest, as long as it’s disclosed and explicit. Rather than worrying about appearing self-interested, it’s much better for business to focus on ''is this the right thing to do?''

5. It’s much easier to build relationships with individuals in Opposition

Overlook those in Opposition at your own risk. The people you think are hopeless and irrelevant today could actually be running the show in a few years. History has shown this to be true many times over. The reason why it’s best to get their attention while they’re in opposition is because they’ve got the time and interest to hear about your issues.

The more they know about your industry and the challenges it faces now, the better they will deal with you and your issues when their time in the driver’s seat comes. I remember saying to some directors in Melbourne and Sydney just before we won office in 2007, ''I intend to treat people in Government the way they treated me in Opposition,” and I could almost see the shivers running up spines when they processed that comment.

6. If you can get the Opposition to support your proposal, the Government can take action with limited political cost

The other reason why it’s important to treat the Opposition seriously is because that’s exactly what the Government is doing. They’re continually asking themselves ''what is the Opposition going to do?”

So if you’re trying to influence policy and the legislative agenda, understand that the response to your proposal will be heavily influenced by what the Opposition is saying.

If the Opposition is going to support it, then the Government can also do it with limited political cost. But if their opponents are going to blow it up into a giant issue, then they know that there may be a heavy political price to pay and look the other way. That’s why investing in the Opposition can be just as important as working with the government of the day.

You can’t always expect to agree

There will always be times when you don’t agree with the way government is doing things, after all, we’re all answerable to a range of different stakeholders. But by maximising politicians’ exposure to things that matter to you, and by understanding their position, any disagreement will not happen because of ignorance or lack of understanding.