America’s chief executive officers and many other people in the country are trying to predict what life will be like under the Trump administration. However, if the last couple of weeks are any indication, businesses should pick up.
Of course, Trump promises tax cuts, eliminating demanding regulations and a base spending spree that has many business owners excited. However, his lewd attacks on individual companies has many CEO’s on edge. The president-elect bribed Carrier into keeping several hundred jobs in Indiana, while Trump’s tweets took billions from Lockheed and Boeing’s market funding. The pattern has become predictable; hedge funds are making trading algorithms to cash in in case Trump lashes out.
CEO’s across the nation are on high alert. In the past month, many are asking their teams what they should do if he comes after them. While the president-elect’s behavior is unconventional according to U.S. standards, many global companies have seen this before. In many countries, especially fast-growing markets where U.S. firms are focusing their attention, one critical factor of success is being close with those in power.
Critics of the Carrier deal confronted protagonists for engaging in “crony capitalism,” they purposely used a concept made famous by the economic rise of the Asian Tigers and their consecutive economic crash in the Asian financial crisis. However, crony capitalism is still alive and remains prevalent in the primary markets across Eurasia, Africa, and Latin America.
What Does The “Crony Capitalist” Playbook Look Like?
First, develop personal relationships with those in power, or their close advisers and family members. Second, know their personal and political interests. Be sure not to work against them and, more importantly, find ways to promote them. Third, participate in symbolic acts that will please those in power. Fourth, praise them whenever you can. And lastly, never cross those in power, especially in public. China’s richest man, Wang Jianlin, summarized the key to his success saying: Be friends with governments, but stay out of politics.
Soon, Republicans may control every federal branch of power. However, many sources of oversight remain, from state attorney generals to the media and non-governmental watchdogs. Trump’s approval ratings have increased since the election, and six out of ten survey respondents agree with the Carrier deal. As the country remains deeply divided, our 45th president will take office with much less popularity compared to his modern peers. In this unstable and highly contradictive environment, companies need stable political strategies now more than ever.
Many successful U.S. companies have long dealt with crony capitalists by adding a premium to their reputation, planning long-term and aligning their operations with public interest rather than the powerful’s personal preferences. The next four years will be a test for democratic institutions and businesses as well.