HBR IdeaCast: Why Business Leaders Need Political Diplomacy Skills Now
Date: November 18, 2025
Host(s): Alison Beard, Adi Ignatius
Guest: Srividya Jayantiala, Associate Professor at ESEC Business School, Author of The Great: How Geopolitics is Changing Companies, Managers and Work
Overview of the Episode
In this thought-provoking episode, hosts Alison Beard and Adi Ignatius dive into why today's business leaders must develop political and diplomatic skills previously considered outside their remit. Interviewing Srividya Jayantiala—a global researcher and academic—the conversation explores how shifting geopolitics and economic policies are turning what used to be global market tailwinds into challenging headwinds, making it necessary for organizations of all sizes to adopt a “corporate diplomacy” mindset.
Key Discussion Points & Insights
1. Geopolitical Shifts: From Tailwinds to Headwinds
- Geopolitics, once an enabler, is now often a barrier to business:
- “Twenty years ago for many companies... geopolitics was actually a driving force, a tailwind... opening new markets, creating new opportunities. What many companies are now discovering is that that’s actually becoming a headwind.” — Srividya Jayantiala [02:41]
- The U.S. is no longer the uncontested center; economic gravity has shifted, with the rise of China and “middle powers” reshaping competition, supply chains, and security concerns, often tied to new protectionist policies. [03:46]
2. The Expanding Reach of Geopolitics
- Geopolitical impacts go beyond traditional sectors:
- “Traditionally we used to think of geopolitics as affecting companies in defense, oil... What we’re seeing today is a slightly different landscape... toy companies, Hollywood movies, any kind of paint manufacturing.” — Srividya Jayantiala [09:29]
- Even small businesses—like shrimp farmers in India—face unexpected disadvantages due to changing tariffs and trade wars. [05:37-06:33]
- Corporate nationality influences advantage/disadvantage:
- “We are seeing now that [the playing field is] becoming more uneven based on where the company is located, or what I call the corporate nationality of the company.” — Srividya Jayantiala [05:37]
3. Leadership Skills: The Need for Corporate Diplomacy
- Adjusting to constant uncertainty:
- Leaders must respond to both immediate policy shifts and anticipate longer-term changes in global market access, investment safety, and operating costs.
- Jenga analogy: Companies can “knock out” blocks (institutions, standards) and function for a while—until the structure collapses. [08:43]
- Advises scenario planning and adaptability:
- “Scanning the environment is probably the first step, but a lot of the work comes after you scan the environment... personalized to your company.” — Srividya Jayantiala [12:18]
4. Learning from Diplomats
- Bringing diplomatic skills into the boardroom:
- “What [former diplomats] bring are their ability to break down the policy process... identify which way the winds are blowing, advise... get the right people in the room.” — Srividya Jayantiala [13:09]
- Example: Nvidia CEO Jensen Huang found himself acting as a corporate diplomat, despite having no prior interest in politics. [13:39]
5. Lobbying and Resource Allocation
- Smaller companies face an uphill battle in policy advocacy:
- Larger firms can employ top diplomats and lobbyists; smaller companies must be strategic, as resources devoted to lobbying detract from product innovation and customer focus. [15:22-16:33]
- Managerial attention is a limited resource:
- “When companies are distracted by other things, their regular operations tend to be negatively impacted.” — Srividya Jayantiala [16:33]
6. Building Internal Capacity for Strategic Adaptation
- Beyond scanning: Making sense of the data and acting on it is internal work.
- Scenario planning, risk management, and quantitative analysis are increasingly critical skills.
- “Really being imaginative... breaking down what we see on the outside into interpreting how is this going to impact my operations… those are the kinds of challenges companies would have to invest in.” — Srividya Jayantiala [18:08]
- Integration of political analysis and strategy:
- Government affairs teams can no longer operate in silos; they must be part of strategic decision-making. [19:09-20:08]
7. Structural Changes in Organizations
- Rethinking global footprints and team locations:
- Companies face tough choices on where to place offices, R&D labs, and supply chains due to rising security and regulatory risks. [20:20-21:48]
- Geopolitics is reshaping remote work:
- “The promise of you can work from anywhere—the technology might allow it, but the geopolitics probably won’t.” — Srividya Jayantiala [21:50]
8. Leveraging Technology for Political Risk Analysis
- Rise of quantitative analysts and large language models (LLMs):
- AI and big data tools are now central for quantifying geopolitical risk.
- “We are going from deeply contextual knowledge... to a way of thinking about risk which is much more quantifiable, which is using data from non-traditional sources.” — Srividya Jayantiala [22:55]
- Examples of data sources:
- Social media sentiment, satellite imagery, and machine learning for scenario modeling. [23:22-23:54]
9. Case Study: Shein and Navigating Corporate Nationality
- Shein’s strategic moves in the face of geopolitical risk:
- Though founded in China, Shein doesn’t sell there and “is slammed by all kinds of changes, including shipping [and] data collection… which is also exactly why they are finding themselves in the middle of this type of geopolitical conflict.” — Srividya Jayantiala [25:54]
- Moved headquarters from China to Singapore to “diversify the corporate nationality,” giving more flexibility and alleviating some risks tied to perceptions of origin. [27:08]
- Shifting and diversifying supply chains:
- Investments in Brazil, India, and Turkey are strategic hedges against a balkanizing world economy. [26:30-27:04]
Notable Quotes & Memorable Moments
-
“What many companies are now discovering is that [geopolitics is] actually becoming a headwind in some ways.”
— Srividya Jayantiala [02:41] -
“We are seeing now that [the playing field] is becoming more uneven based on... corporate nationality.”
— Srividya Jayantiala [05:37] -
“The analogy I like to use is that of a game of Jenga... you could start knocking out blocks one by one and the tower still stands... but at some point the tower will collapse.”
— Srividya Jayantiala [08:43] -
“What got [business leaders] to the top is not necessarily the same set of skills that they need to have today.”
— Srividya Jayantiala [13:39] -
“When companies are distracted by other things, their regular operations tend to be negatively impacted.”
— Srividya Jayantiala [16:33] -
“The promise of you can work from anywhere—the technology might allow it, but the geopolitics probably won’t.”
— Srividya Jayantiala [21:50] -
“[Shein] moved their headquarters from China to Singapore… diversifying the nationality of the company.”
— Srividya Jayantiala [27:08]
Timestamps for Important Segments
- [02:41] Geopolitics moves from opportunity to obstacle
- [05:37] Tariffs affecting small businesses and the concept of “corporate nationality”
- [08:43] Jenga analogy for institutional fragility
- [12:18] Steps for scenario planning and environmental scanning
- [13:09] Value of hiring former diplomats
- [15:22] Challenges and risks of lobbying for large vs. small companies
- [18:08] Internal adaptation: The challenge of making sense of risk
- [20:20] Rethinking office locations and R&D centers
- [21:50] Why “work from anywhere” is threatened by geopolitics
- [22:55] Leveraging LLMs and AI for political risk assessment
- [25:54] Shein as a case study in corporate nationality and geopolitical navigation
- [27:08] Shein moves headquarters to Singapore as a geopolitical hedge
Conclusion
This episode underscores that political and diplomatic acuity is now essential for business leaders, regardless of sector or company size. Srividya Jayantiala stresses that ongoing scenario planning, adaptability, and integration of government affairs into business strategy are vital. Leveraging both new talent—like former diplomats and quantitative analysts—and new technologies is crucial. Companies that can reimagine their structures, decision-making processes, and even their corporate identities will be best positioned to thrive in an era where political dynamics are as important as commercial ones.
Recommended for:
Executives, strategy professionals, business students, and anyone interested in understanding how geopolitics now shapes global business strategy and operations.