At a recent talk hosted by the Institute for Business in the Global Context and the Fletcher Political Risk Group, Longview Global Advisors President DJ Peterson discussed the value a clearly articulated global perspective brings to a career in political risk. Most importantly, he shared useful frameworks and ways of thinking about the world that he shares with his multinational clientele. Business leaders, often preoccupied with the particulars of their job or industry, benefit from someone “outside coming in and talking about today’s hotspots and their significance for economic decisions,” said Peterson.
Peterson outlined the step-by-step manner in which he analyzes the client’s problem. First is the “what”. In his role as an advisor, he “defines and puts his stake in the ground on an issue.” Clients may not always have a deep understanding, so there is a need to articulate the issue very clearly. Second is the “why”. Tens of thousands of refugees are pouring into Europe: What is the significance of this for business? To this he replied that, “The governance structure of Europe is flawed… and this influx is pointing this out. Schengen will probably be gone, but will market integration change? Is it going to cause other regulatory changes?” This step is all about bringing clients to the “OMG” moment where they realize: “Oh my god, this is a really big issue for me.” Next is the “when”. Peterson stated that understanding your client’s time horizon is crucial. “Markets think about today and tomorrow, businesses in months, and governments and policy makers in years.” “How much?” is the question the client cares about most – “How much is this [global event] going to cost [them]?” Finally, he tells clients how to “act” to respond these events in a way that will optimize their position. Peterson suggested that clear buy/sell or up/down recommendations are the most impactful.
Beyond this framework, Peterson stressed the importance of knowing your client. While he emphasized the merits of expertise, Peterson pointed out that agility in talking across a wide array of trends is what’s most important for future practitioners in the field. For him, political risk is not only “an analytic process, but a client process,” adding that, “we frame the issue; that’s the secret sauce.” The OMG moment for Fletcher students thinking about the political risk field?Peterson’s closing remark, “Somewhere between research and client relationships: that’s where you build your career.”
- James Kochien, F'17