August 05, 2019
How Do Companies Lead in an Age of Massacre and Politicization?
After a shocking weekend of domestic terrorism, where fatalities are listed like so many sports scores, and our collective sense of mourning is combined with a sense of tragic sameness, what does it take until we actually do something to change this perdition trajectory? We are left to mourn our dead, ponder solutions, and debate the politics of this divisive age.
Our job is not to join the exceptional columnists who have already written so beautifully and powerfully about the losses and choices ahead, but to help companies who increasingly face their own choices in an age of mercantile activism. How much communications is appropriate when everything is politicized?
Perhaps this morning or someday soon, your company is going to face the conundrum of when to speak and what to say about a controversial issue. Here is a brief summary of a few rules for these challenging times:
- Transparency: Chick-Fil-A has made no secret of its position on LGBTQ issues, but it is largely forgiven because it has been transparent about its religious reasons and minimized its advocacy as it expanded. Customers and shareholders will forgive a different point of view if there is honesty and transparency.
- Consistency: Patagonia’s support for national parks in the midst of a shutdown fight was viewed by the market as consistent with its corporate mission even though it was clearly a political position too.
- Materiality: Airbnb’s opposition to Brexit was viewed by the market as consistent with its business objectives.
- Sacrifice: When Dick’s Sporting Good’s banned the sale of guns, they understood that there would be a short-term sacrifice in profits and they were willing to take the financial hit. They planned for it and converted the shelf space previously dedicated to guns to other high-profit items, limiting the financial damage.
- Unanimity: Dick’s decision was unanimously approved by its Board of Directors and executive teams. This left no daylight for critics to harm the company further by alleging a split decision. The company spoke with one voice.
- Leadership: Uber’s failure to do more than “study” the President’s Business Council in the wake of the travel ban was seen as inconsistent with its disruption brand and further harmed the company’s industry-leading position. Lyft, by contrast, immediately donated $1 million to the ACLU and was recognized as a quiet leader. Political actions must match brand positioning.
- Selectivity: When WeWork banned employees from eating meat in its locations, it was trying to advocate a position its leadership saw as worthy, though when they sat silent after the Saudi assassination of Jamal Khashoggi it was viewed as hypocrisy (Saudi money is largely behind WeWork through its bank, SoftBank). Choose your issues carefully.
- Authenticity: When General Mills announced that Cheerios was going “GMO-free” it was met with substantial condemnation, including from other companies. There are no GMO oats.
There is a precedence for companies taking leadership over government. It happened a century ago when J.P. Morgan and other bankers created the Federal Reserve, a move that held off the Great Depression for over a decade. Increasingly, companies can and do take political positions. But it is a minefield, and it has the potential to offend large numbers of consumers, shareholders, and activists. There are enough experiences in the last few years to help guide us through the timing, reasoning, and effective execution. Ducking is increasingly a risky strategy.
In these difficult times, I hope these thoughts help.