There are political upheavals that change the shape of the world.

Think of the Iranian Revolution,

the fall of the Berlin Wall,

the release of Nelson Mandela,

and there are other, less tumultuous events that still take people by surprise.

Take May the 7th, 2015, U.K. election day.

Investors were worried right up until the vote.

The polls were unanimous: no party would have an overall majority.

There would be weeks of haggling before a government was formed,

and there was every chance that Ed Miliband, leader of the Labor Party, would end up as Prime Minister.

Companies began laying plans for a dramatic move away from the policies of the Conservative-Liberal Democrat coalition government,

but, by the end of the day, contrary to all expectations, David Cameron's Conservatives looked as though they were heading for a big win,

and so it proved, his party ended up with an absolute majority in Parliament.

Investors were relieved, but soon started worrying about other things.

Would the Tories' victory and a promised referendum mean that Britain would withdraw from the European Union?

These rapid reversals in fortune show the difficult circumstances in which companies operate,

and how they need to master them in order to survive.

Companies can actually enter markets without taking political risk into consideration.

Sometimes entering Egypt or Argentina or uh Nigeria can be very seductive, you know.

Let's go to Nigeria, 180 million people,

but essentially, some organizations fail to capture a better understanding of political risk,

especially when there's terrorist attacks or when there is uh governments that are having regime change,

and as a result they come in and expropriate the asset.

Companies have to think beyond their immediate environment.

What is going to happen in Greece?

What will be the effect on the rest of the EU?

Will the EU itself begin to unravel?

What will happen in Ukraine, center of tension between Vladimir Putin's Russia and the West?

Will the U.S. reach a nuclear accord with Iran?

And what will the effect be on the oil market and on relations between the U.S. and Saudi Arabia?

Harold Wilson once said that a week was a long time in politics.

Companies have to plan over years.

The political environment is a constant in a company's life,

whether it's revolution or a surprising election result in one of the world's longest standing democracies.

How can companies make decisions in such an uncertain environment?

Political risk has changed fundamentally in the last few years.

Historically, it was kind of core issues about revolution, nationalization, seizure of assets,

the ability of the government to kind of fulfill its sovereign obligations.

Those things of course still exist, but for the kind of modern global corporation, it's taken on a much more amorphous aspect,

so for major international companies, frankly from all over the world, they see the world as a global marketplace,

and they plan their business strategy accordingly,

but for, for international governments and for individual countries,

their preoccupation now is increasingly insular, introspective, and nationalistic.

The idea that governments, kind of, reflect their position in the world seems to be behind us.

Governments have preoccupied by electorates or public opinion, that is increasingly inward-looking and very, very immediate,

so companies planning long-term in a global market are inherently at odds with governments

that is, whose interests are much, much more short-term,

and that abrasion between the two is where the modern form of political risk exists.

Many companies have got political risk drastically wrong,

but some, by careful planning, have managed to ensure their survival.

Microsoft is a great example of an organization that's very proactive in how it mitigates political risk.

They're very performance-driven.

They're driven by targets.

They're KPI driven, which is a fantastic example of how you measure political risk, how you mitigate it on an on-going basis,

and this company has invested a lot of effort and time to engage with the right conversation,

with the right capabilities in how they reduce that political risk,

but also actively investing in the right relationships at the same time.

Most companies die within a few years of their foundation.

Those that survive for decades, or even centuries, are the ones that are most alert to their environment.

That means their commercial environment, but it also means their political environment.

Michael Skapinker, Financial Times, London.