The Urgency of Political Diplomacy for Today’s Executives

The strength of any strategy depends on the quality of the relationships that surround it. How does political diplomacy build the bridges that sustain long-term progress under pressure?

Business strategy used to feel largely self-contained. Today, it unfolds in full view of political pressure, public scrutiny, and regulatory constraint. Decisions made far outside the organization now determine market access, pace of growth, and room to maneuver, while geopolitical tensions reshape supply chains, talent flows, and capital allocation. 

Hisham El-Badawy, Managing Partner at Signium in GCC and Egypt, offers his insights, saying,

“For many executive teams, these dynamics are still treated as external complications, issues to be managed by legal or government affairs teams once they materialize. But this tends to be a reactive approach, which is proving insufficient.” 

Political diplomacy now sits squarely within leadership itself. Leaders who can read political currents, convene credible coalitions, and negotiate ethically with public actors are better positioned not only to protect their organizations but to open up strategic conversations that might otherwise remain out of reach. 

When does political context alter strategy? 

As companies expand across borders, innovate in regulated spaces, or introduce disruptive business models, they often encounter political friction that directly restricts growth. In many markets, moving fast without political grounding creates resistance rather than advantage.  

“The consequences of ignoring political diplomacy are becoming more profound,” says El-Badawy. “Traditional execution excellence is still essential, but it’s not enough on its own. Leaders now have to be comfortable operating where business, policy, and public interest overlap. This is where influence develops over time, and mistakes carry real consequences.” 

For executive teams, political diplomacy as a capability is now a real challenge. Engaging with political forces thoughtfully and constructively has become part of how leadership is practiced, not an issue to be managed on the sidelines. 

Defining political diplomacy in a leadership context 

Political diplomacy is often misunderstood or assumed to be the same as “lobbying”. However, lobbying is transactional, and typically focused on a specific outcome: a rule changed, a policy delayed, a decision influenced. It usually occurs via formal channels and often late in the policy process. 

Political diplomacy takes a longer view. It’s about building relationships, establishing legitimacy, and maintaining trust and access to decision-makers over time, rather than securing short-term wins.  

In a leadership context, political diplomacy can be understood as the capacity to: 

• Read political signals early 

Leaders pay attention to emerging regulatory and political signals before they turn into hard constraints, giving the organization time to respond thoughtfully rather than react under pressure. 

• Engage the full stakeholder landscape 

Political diplomacy means engaging well beyond government alone, including regulators, civil society groups, industry peers, and the media, to understand concerns and build credibility across the ecosystem. 

• Frame decisions in public terms 

Effective leaders explain their positions in ways that acknowledge broader public trade-offs, not just commercial logic, helping stakeholders see how business decisions connect to societal outcomes. 

• Negotiate for long-term trust 

According to the Edelman Trust Barometer, business continues to rank as the most trusted institution globally, ahead of government and media. This places greater expectations on corporate leaders to engage responsibly in public and policy debates. Rather than pushing for quick wins, diplomatic leaders focus on outcomes that preserve trust, credibility, and the organization’s license to operate over time.  

“Diplomacy isn’t about being agreeable or risk-averse,” says El-Badawy. “It’s about being effective in situations where authority overlaps, is sometimes unclear, and constantly changing.” 

Why should political diplomacy matter now? 

Several structural shifts have elevated political diplomacy from a peripheral concern to a core leadership requirement. In a recent Harvard Business Review podcast on political diplomacy in business, leadership experts argued that executives can no longer treat government engagement as a specialist function. Instead, political awareness and cross-sector fluency are becoming core leadership skills, particularly in industries shaped by regulation, national security concerns, and rapid technological change. 

Regulatory speed and fragmentation 

Regulation is moving faster and becoming more localized. In areas such as AI, data privacy, climate transition, and labor standards, leaders face overlapping national and regional rules that evolve in parallel rather than in sequence. Waiting for clarity often means falling behind. 

Rising reputational and activist pressure 

Investors, employees, NGOs, and consumers now exert meaningful influence on policy agendas. More political decisions are being shaped by public narratives rather than technical merit alone. Leaders who engage late – or defensively – often find the narrative already set. 

Geopolitical friction and shifting market access 

Trade restrictions, sanctions, and national security considerations can reshape market access almost overnight. While geopolitics once felt like a distant risk, it’s now become a board-level variable for global organizations. 

“Political engagement isn’t an occasional task anymore,” says El-Badawy. “It’s part of how leaders think, decide, and act. Choosing not to participate now means giving up the right to have any influence on policy decisions at all. In a sense, it means choosing to remain powerless.” 

Three leadership capabilities that enable political diplomacy 

American statesman Colin Powell once said, “Diplomacy is listening to what the other guy needs. Preserving your own position but listening to the other guy. You have to develop relationships with other people so when the tough times come, you can work together.” 

Political diplomacy is not an abstract trait. It’s a strategic discipline built through specific, observable actions and abilities. 

1. Political sensing and scenario planning 

Diplomatic leaders invest in understanding the political environment with the same rigor they apply to financial or competitor analysis. 

This includes: 

• Horizon scanning for emerging regulatory debates 

• Mapping key actors, incentives, and decision timelines 

• Identifying where political risk intersects with strategic priorities 

• Running scenarios that anticipate the ripple effects of political and regulatory decisions 

“It’s not that we have to be able to predict the future,” says El- Badawy. “But by practicing political sensing and scenario planning, leaders prepare their organizations for multiple possible outcomes. In doing so, they give themselves a head start when risks do arise.” 

2. Coalition playbooks and convening legitimacy 

Most organizations don’t have the influence to shape policy on their own. When leaders work with others and speak as part of a broader coalition, their views carry more credibility and are more likely to be heard. 

Effective coalition-building involves: 

• Creating repeatable formats for cross-sector engagement 

• Working with peers, academics, NGOs, and industry bodies 

• Using voluntary standards or shared principles to shape policy before it hardens 

Coalitions demonstrate seriousness and reduce the perception of narrow self-interest. They give leaders a voice early in the process, instead of leaving them to react once decisions have already been made. 

3. Building credibility through clear communication 

Political engagement is not only about facts and policy details. It’s also about how decisions are explained and understood. 

Leaders who shape the conversation well are able to: 

• Explain complex trade-offs in clear, everyday language 

• Speak openly about risks and limitations, rather than glossing over them 

• Draw on independent voices, such as academics or industry experts, to reinforce credibility 

• Ensure that their actions align with what they have said publicly 

“Over time, this kind of consistency builds trust,” says El-Badawy. “When leaders communicate clearly and act in line with what they’ve said, their teams feel more confident about the future, especially when decisions are difficult or outcomes are imperfect.” 

How can leaders turn political diplomacy into practice? 

Political diplomacy makes sense in theory. The challenge is putting it into practice: shaping governance, developing leaders, and building the right habits across the organization. 

Governance and executive ownership 

Political and regulatory risk needs a clear place at the top table. Boards should review it with the same discipline applied to financial or operational risk. 

That often means: 

• Placing political and regulatory risk firmly on the board agenda 

• Ensuring senior executives take direct responsibility for political engagement, rather than leaving it solely to advisors 

• Creating small cross-functional groups that align strategy, legal, communications, and risk leaders around emerging issues 

Talent and leadership development 

True political diplomacy grows through shared intentions, and it should be reflected in how leadership potential is identified and developed. 

In practice, this can include: 

• Assessing leaders on their ability to engage across sectors and manage complex stakeholder environments 

• Giving high-potential leaders exposure beyond their industry, including work with regulators or NGOs 

• Giving leaders real-world exposure through temporary placements, cross-sector projects, or coalition work 

Processes and resourcing 

Agility is important, especially in fast-moving situations. However, political engagement depends on structure and discipline as much as it does on improvization. 

Organizations that take it seriously: 

• Allocate deliberate funding for stakeholder engagement and coalition work 

• Define clear lines of escalation when political risk begins to affect strategy 

• Bring political insight into strategic planning discussions early, not after plans are already set 

El-Badawy adds: “The common thread across all these functions is intentionality. Political diplomacy is treated as a capability to be built, not a fire to be fought.” 

Lessons from Uber: The cost of late engagement 

Uber’s early international expansion offers a clear illustration of what can happen when political diplomacy lags behind innovation. As the company entered cities across Europe, its business model collided with existing transport laws.  

• In Germany, courts banned UberPop in 2014 for violating passenger transport regulations that required professional licensing.  

• In London, regulators refused to renew Uber’s license in 2017, citing concerns around safety reporting and corporate responsibility.  

• Similar tensions unfolded in France, where legal battles escalated into public protests. 

Uber’s strategy at the time prioritized rapid market entry, assuming regulatory frameworks would adapt to consumer demand. In several cases, the opposite occurred. Authorities responded with legal challenges, service suspensions, and stricter scrutiny. Market access became conditional, and expansion slowed. 

Under later leadership, Uber shifted its approach, engaging more directly with regulators, adjusting elements of its model, and investing in local relationships. The company regained licenses and rebuilt credibility in key markets, but only after absorbing high reputational and strategic costs. 

“Uber shows us something important,” says El-Badawy. “It’s not that disruption invites resistance. It’s that you can’t simply bolt compliance on as an afterthought. If you wait until there’s friction to start engaging, you’re already on the back foot.” 

Establishing guardrails for when political diplomacy backfires 

Sometimes, political engagement doesn’t deliver the intended result. When it is handled carelessly, it can quickly erode credibility and trust. The issue is rarely engagement itself, but the intent, consistency, and follow-through behind it. 

Leaders should watch for several warning signs: 

• Coalitions that exist primarily to protect narrow interests rather than address shared concerns 

• Engagement that’s visible but not supported by meaningful commitments 

• Heavy reliance on intermediaries, leaving senior leaders distant from the conversation 

• Communication that satisfies legal requirements but fails to build genuine trust 

Diplomacy can strengthen a company’s position, but it also raises expectations and attracts closer scrutiny. Once an organization steps into the political arena, its actions are judged on a far wider scale. 

Leadership in a political age 

Political diplomacy has become part of modern leadership practice. For executive teams, three priorities stand out: 

1. Map political risk with the same discipline applied to other traditional risks, and ensure it receives board-level attention. 

2. Develop leaders who are comfortable engaging across sectors through real exposure and responsibility, not just theory. 

3. Treat coalition-building as a strategic capability, supported and led by senior executives rather than delegated entirely to functional teams. 

El-Badawy concludes:

“Although political diplomacy doesn’t remove uncertainty, it allows leaders to navigate it with greater foresight and flexibility. It also builds a support network across industry stakeholders and allies, and we know we’re always stronger when we work together.”  

Organizations that invest in this capability can proactively protect market access, contribute constructively to policy discussions, and sustain credibility over time. As authority overlaps and expectations rise, the ability to engage thoughtfully – early, ethically, and with intent – has become a defining element of effective leadership.