Why corporations can no longer avoid hot-button issues
Over the past few years, companies have been debating whether to speak out on social and policy issues. From Black Lives Matter to climate change, there has been no shortage of hot-button issues and employees, investors, and customers increasingly want to hear the company’s position.
In the past there was little debate about whether companies should weigh in on charged issues: They avoided it at all costs. But expectations have changed. Today, companies that don’t articulate where they stand on issues may face a backlash.
Let me explain.
In 2018, Nike took the calculated risk of featuring former San Francisco 49ers quarterback Colin Kaepernick, who led the “take a knee” protest against policy brutality and inequality, in an ad campaign. The slogan for the campaign was: “Believe in something. Even if it means sacrificing everything. Just Do It.” While some customers took to social media to protest, after just one week, Nike’s stock price hit an all-time high and within two weeks, brought in $6 billion. This wasn’t lost on corporate brand executives or boards.
Then came the unspeakably horrible death of George Floyd. The country was shocked into the realization that racism and hate is all around us. In droves, companies began speaking out against inequality and what they were doing to change it. Admittedly, taking a stand against something unquestionably wrong wasn’t risky, but it was an inflection point, nonetheless. Suddenly, many employees and investors concluded that by saying nothing, a company was saying everything. As a result, according to a recent Gartner report, 68% of employees would consider quitting their current job and working with an organization with a stronger viewpoint on social issues. In another report by Paradigm, more than half of Americans would consider leaving an organization if it did not speak out directly against racial injustice. And three-quarters of employees expect their employer to take a stance on current societal or cultural issues, even if those issues have nothing to do with their employer.
Plus, employees whose employer has taken a strong stance on current societal and cultural issues are twice as likely to report high job satisfaction.
So especially today when it is difficult to attract talent, companies who disappoint their employees, or perspective employees, by not taking a stand on issues face even more challenges.
The CEO’s role.
In many cases, employees not only want to hear from company, but they also want to hear from organization leaders themselves, and CEOs in particular.
54% of employees globally believe that CEOs should speak publicly on controversial political and social issues they care about. 82% of employees say it is important for them to know their CEO’s position on social issues like women’s reproductive rights, gun control, immigration policy, economic inequality, racial discrimination, and LGBTQ rights.
A new way of doing business is being written for CEOs, one that demands a strong, principled, respected voice amongst the social and political unrest.
Keeping it real.
The public can discern when a company undertakes an initiative because it reflects its values vs when it is looking for some good PR — and they have no problem broadcasting it for all the world to see and react. For example, when Pepsi ran a tone-deaf 2017 ad that showed supermodel Kendall Jenner cat walking through a crowd of protesters to give a Pepsi to a police officer, it was roundly criticized for portraying the opposite of what protestors face in the real world. And while Pepsi immediately apologized and took down the ad, this will serve as a cautionary tale for years to come.
That same year, Procter & Gamble released a video featuring black mothers discussing the racism their children face in American life called, “The Talk.” It rang hollow to many black parents who are forced to have difficult conservations with their children about the widespread inequalities that they will encounter or have already. The company received the most backlash they had ever before with more than 10,000 letters and calls in protest.
A new way of doing business.
Times have changed. It’s no longer enough for a company to provide quality goods and services at fair prices. People want to buy from, invest in, and work for organizations with values, purpose, a conscience, and sincerity. Corporate leaders must recognize that the debate is over, at least for now. It’s time to take a stand and speak your truth.
Since leaving his native Venezuela more than a decade ago, Danilo Diazgranados has been a successful independent investor, with a focus on the consumer goods, real estate, and financial sectors. With a deep sense of responsibility to “pay it forward,” Danilo mentors young entrepreneurs, supports vocational culinary/hospitality education programs, and contributes his time, expertise, and resources to a variety of other philanthropic pursuits.
Author: Danilo Diazgranados