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 stayed open, and corporations thrived on global reach and distributed value chains. The world felt like it was getting flatter. Ideological divides seemed to narrow. Technological progress was celebrated across the political spectrum. 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 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 defines performance. Most companies earn little or no economic profit. But the top quintile is pulling away, delivering record returns.
Their advantage? They’ve mastered forces beyond the market.
The most successful brands don’t just offer a great value proposition—they embody a powerful values proposition. The strongest customer loyalty is rooted in shared beliefs and emotional connection. Regulatory moats can be more enduring than technological ones, especially when they define the structure of an industry. Breaking into new markets often hinges on reshaping outdated rules, aligning innovation with public policy. The ability to drive collective action thus is crucial to capture value. And when crisis hits—as it inevitably does—credibility and stakeholder trust become priceless assets to protect value.
Companies that skillfully navigate their beyond-market environment grow faster, enjoy higher margins, and consistently outperform the market. With billions at stake, this is no longer optional—beyond-market strategy is the new frontier of corporate value creation.
This Substack is your guide to winning in an age of polarization.
