In Uncertain Times, Social License to Operate is Earned, Not Given

Doing business in or with the United States today can feel like navigating a political minefield. Tariffs shift overnight. Social media storms erupt each and every hour. Policies zigzag across the federal landscape, and the ground under statehouses and city halls is no less volatile.

We are seeing companies respond with understandable fear and confusion in the face of this uncertainty. Many great organizations suddenly now do all they can to stay off radar screens, some even becoming paralyzed, their proactive engagement with government dropped to a trickle. Multi-national conglomerates, regional industry leaders and innovative start-ups alike are adopting “only speak when spoken to” attitudes towards the practice of public affairs.

That’s a mistake. And it could be an expensive one near- and long-term.

Here’s the truth: much of today’s chaos isn’t new. It’s just louder, faster, and happening in full view of a public that now consumes government process like a reality TV show. The stakes have always been high, but now corporate leaders have less time to make decisions. Everyone is watching every minute of the day and even the best policy, speech or quarterly result can be spun, deep-faked or filtered in negative ways.

In times like these, it’s tempting to retreat—to hunker down and wait for the next election or next news cycle. But in our experience, that’s the wrong move. Half the US is always waiting for the next election, and the next news cycle could be even worse than this one for companies who don’t take control of their own narrative. Passive and paralyzed does not win the day in public affairs.

The most successful organizations—those that grow, endure, and lead—are the ones that engage. Not just occasionally. Not just in D.C. But persistently, and at every level.

One of us has served in both chambers of state government, both of us have counseled national and international clients for decades. One thing has remained true across every session, budget negotiation, and policy pivot: all politics is still local. That’s not just a folksy phrase. It’s a practical framework for how public affairs should be approached — especially now.
 

The Social License to Operate

 
We are hearing a lot about the “social license to operate” (SLO) these days—and for good reason. This isn’t a regulatory permit or legal document. It’s the community’s permission, even expectation, for your business to exist and succeed. And like trust, it can’t be bought or rushed. It’s earned.

You build that license by showing up—at town halls, in state capitols, on the factory floor, and in city council chambers. When tariffs sow doubt among your customers, you remind them that you are in it with them. When regulations change and suppliers ask questions, you reassure them that the partnership still holds. You don’t chase headlines. You lead by being present, proactive, and transparent.

Companies work very hard over many years to carefully curate brands using multitudes of focus groups, advertising and product testing, the type of lighting in stores, the font on websites. But without an active social license strategy on key current issues, that Brand foundation can suffer substantial long-term damage. It is almost always damage that could have been avoided.

Consider the case of the retailer Target. This January the company (like others) announced a roll-back of its DEI policies that covered everything from employee advancement to supplier sourcing. The resulting consumer and political backlash has been substantial, including boycotts and a 26% decline in its stock price.

While we cannot pull the curtain back on Target’s research leading up to their January decision, it would appear they may have skipped a few steps. Given the reaction from so many different constituencies, it is hard to discern any conscious pursuit of social license to operate relative to the DEI policy change.

Specific to government relations, the LACK of relevant planning and engagement was brought into stark relief in June, when Target finally met with the influential Congressional Black Caucus. The headlines coming out of that meeting – happening six months after the DEI decision – were poor for Target. Caucus leaders pressed Target’s CEO for “clear answers” and demanded “accountability”.

There are no shortcuts to government affairs, no benefit in hoping to dodge hard topics. Target should have realized this following its prior missteps on the LGBTQ issue. If it had a government affairs plan before its January DEI announcement, it certainly wasn’t apparent.
 

The Government Affairs Continuum

 
As the Target case illustrates, by the time you get an inbound call from the Congressional Black Caucus, it is too late.

It is time to stop thinking about government relations as a set of emergencies to be managed and start recognizing it as a continuum. Government relations is not a static map riddled with landmines. It’s a stream—and like any stream, it must be navigated, monitored, and respected over time. Your success in that stream depends on the consistency and clarity of your effort.

Whether it’s the legal chaos around sweeping tariffs, the public fallout from online posts, or shifting poll numbers that show Americans souring on political leadership, the risks are real. But so are the opportunities. And importantly, these opportunities exist at every level of government, not just in Washington D.C.

Take the case of federal incentives under the JOBS Act and the competing state-level push to attract infrastructure projects to various states. Billions in federal funding have been announced for rail and road projects, but companies still face a maze of uncertainty—local permitting delays, NIMBYism, state-level pushback and even political backlash over foreign partnerships.

Major investments like the proposed Texas bullet train between Dallas and Houston, originally linked to Japanese ownership, triggered fierce local resistance and a cascade of shifting political support at county and state levels. What does this tell us?

Even with White House backing and robust federal dollars, a project can stumble—or stall entirely—if community concerns are ignored or if the company lacks a consistent presence on the ground. The lesson is clear: your license to operate doesn’t ultimately come from Washington, it comes from the people who live where you build.
 

Anticipation & Preparation

 
Success in today’s era also requires a willingness to use the data tools available to ensure proactive engagement is informed and measurable. In 2020 Dr. Rodrigo Navarro posited “Ten Myths About Government Relations” in the International Journal of Business Management. One of these myths was “It’s Very Difficult to Measure Results”.

Whether you credit or blame Karl Rove or James Carville, the political applications of data have helped bring us to this point. Companies must recognize this power and ensure a government affairs approach utilizes effective analytics to dissect key issues, profile stakeholders, game-plan options and set an effective path forward.

Armed in this manner, companies can (and should) establish clear KPIs in government relations as a foundation of securing what is now known as social license to operate. From real-time sentiment analysis and geo-targeted polling to AI-driven policy tracking and stakeholder mapping, understanding the local, regional, and national landscape is more possible than ever.

But tools are only as good as the strategy behind them. Companies must use the information effectively to ensure actionable outcomes. Reputation studies, polarization review, sentiment analysis by city – should all roll into an overall action plan that instill confidence. Whether the next meeting is in the White House or the Township office.
 

The Good News

 
Here’s the good news—and the challenging truth: this work doesn’t end. It’s like flossing or changing your oil. Neglect it, and you pay the price. Stay with it, and you extend the life and success of your operation.

The organizations that will emerge stronger from this period are those that return to fundamentals:

• What is your mission?
• Who are your clients, customers, and community stakeholders (including policymakers)?
• How are you engaging at every level now to earn their trust tomorrow?

These questions aren’t philosophical – they’re operational. And they are more relevant today than ever.

That’s why we urge leaders to think holistically: engagement is not just federal lobbying or crisis response. It’s community investment, employee communication, supplier alignment, and neighborhood trust. It’s bipartisan, multilevel, and continuous.

In the months ahead, as the political theater ramps up, the policy winds shift, and the headlines grow more dramatic, stay rooted in what works. Return to the basics. Recommit to your mission. Reconnect with the people you serve. That’s not just smart public affairs—it’s smart business.
 
 
Don Hunt
Corporate Affairs General Director, USA at LLYC.

John Proos
CEO at JP4 Government Solutions.