Corporations are being told that silence equals violence.
So, it comes as no surprise that the leaders of Major League Baseball, Coca-Cola, and Delta, among others, took a public position a little while back, on Georgia voting legislation.
A recent survey shows that the American public now trusts corporations more than the media, government, or non-profits. With that in mind, CEOs need to tread lightly.
Polarization in this country shows no signs of easing up, even after voters swapped Trump for Biden and it is only natural that cultural forces pull the last trusted institution into the unwinnable war. The Business Roundtable has embraced the notion of stakeholder capitalism, uniting the largest firms behind the principle of doing well, by doing good, and finding purpose by replacing shareholder primacy with a broader constituency of “stakeholders.”
Brands that align
In fact, brands like Patagonia and Nike have seen positive Return on Investment from standing in support of progressive issues. Other brands like MyPillow or Black Rifle Coffee have benefited by aligning closely with right-wing audiences. This can be an effective strategy, but it is not right for every brand and is a double-edged sword. As David Ogilvy famously said, “The customer is not an idiot, she is your wife.” In other words, the public can smell pandering from a mile away, and they will penalize you for it.
Here we should pause to remember Keurig, the coffee maker who found themselves in hot water with conservatives and liberals when they were called out for advertising on Fox News in 2017. Objectors initially took to Twitter to question the brand’s values. Reflexively, Keurig announced the termination of their sponsorship of Sean Hannity. Suddenly they were met by an onslaught of viral videos where angry consumers took pleasure in smashing their Keurig machines. The Keurig skirmish left them an early casualty of our modern culture war, disproving the notion that all publicity is good publicity. Their CEO stepped in to disavow any intention of picking sides and committed to overhauling the firm’s communication policies.
CEOs’ newfound public trust is the typical overnight success, ten years in the making. Now that they have it, they must steward it wisely and sparingly. Companies content to attract customers from only one political ideology may be able to successfully exploit our fractured nation’s vulnerabilities for the moment. That may not bode so well for the Fortune 500, whose market capitalization requires buy-in from stakeholders among the 81 million Biden voters as well as the 74 million voters who supported Trump in November. Perhaps Coca-Cola might realize better returns by challenging Pepsi more than Brian Kemp.
CEOs must be prudent
Make no mistake; stakeholder capitalism is an essential strategy. To fight against it is to command the waves to come no further. However, practical realities must temper this effort. While the strategy is important, execution is everything. No CEO can effectively manage their business if they choose to debate every public policy matter, they are told they must address.
Not every troll or gaslighting journalist deserves a response, as these are almost never grassroots customer concerns. Instead, CEOs should think deeply about what issues are and are not genuinely within their scope and how long they can sustain efforts to engage in them. When pressured to weigh in on such matters, consider this meditation: “Does this truly need to be said? By us? Right now?”
If you have the good fortune of running a company in 2021, you are sitting on a lead in public trust. Do not let those who have squandered theirs, pull you into the trappings of increased polarization and convince you to alienate half of your customers.
Instead, consider seeking the serenity to accept the things you cannot change, to change the things you can, and the wisdom to know the difference. There is an infinite number of productive contributions your business can make to issues of stakeholder importance. Let your company be defined by what you do, not what you denounce.