Business Strategy in an Age of Polarization
For three decades, companies in the United States and Europe operated in a remarkably stable environment. Free trade flourished, markets opened up, and corporations thrived on global reach and distributed value chains. The world felt like it was getting flatter. Ideological divides seemed to narrow, and centrist “third-way” governments dominated much of the West. It was, as former U.S. National Security Adviser H.R. McMaster called it, a “holiday from history.”
That era is over.
In today’s age of domestic and global polarization, strategy must extend beyond the market. While some business leaders see only volatility and risk, others recognize opportunity. Polarization doesn’t just shape politics – it increasingly defines corporate performance.
While most companies earn little or no economic profit, the top quintile is pulling away, delivering record returns. While their success is frequently pinned on their innovation, a closer look reveals that success often comes not just from market performance, but from mastery of forces beyond it.
The most successful brands don’t just deliver a strong value proposition – they also embody a clear values proposition. Lasting customer loyalty stems as much from shared beliefs as from the functional aspects of a product.
Regulatory moats can outlast technological ones, especially when they help define an industry’s structure. Expanding into new markets often requires reshaping outdated rules. It means aligning innovation with public policy. Staving off costly regulation can make the difference between superior returns and mediocre ones. The ability to mobilize collective action is now central to capturing value.
And when crisis strikes – as it inevitably does – credibility and stakeholder trust become priceless assets for protecting value.
Companies that skillfully navigate this beyond-market environment grow faster, earn higher margins, and consistently outperform their peers. The stakes are too high for this to be optional – beyond-market strategy is the new frontier of corporate value creation.
This Substack will explore how to master beyond-market strategy – and how to win in an age of polarization.
