The recent passage of a restrictive voting law in Georgia raises important questions on how, when, and why — or if — companies and organizations should take sides on this and other hot-button political and social issues of the day. Microsoft, Bank of America, and Patagonia are among the major companies who have voiced their opposition to the Georgia legislation.
After being criticized for their initial comments when the measure was enacted, today Coca-Cola issued a second statement in as many days opposing the law. A company spokesperson has not responded to a request for an explanation of why they released the new statement. Delta Airlines also changed course, and issued a statement critical of the new law.
While corporate activism has been around for decades, the increased polarization of the country and the tribal nature of politics has created fresh concerns about the consequences for businesses that speak up too early, too often or alienate or offend too many people.
Neeru Paharia is an associate professor at Georgetown University’s McDonough School of Business and an expert on consumer behavior and signaling through brands. He acknowledged that taking a political stance can be complicated for brands. “It depends on who your target consumers are—do they agree with this position? Have other companies taken positions on similar issues?,” he asked.
“Brands need to consider where they currently stand in the market. If you already have a large market share you may lose, but companies with a smaller share of the market may stand to win big by capitalizing on the right moment,’ he observed.
In Synch With Brand Identity
Kris Conesa is the senior director of media strategy for Roar Media, a strategic marketing and communications firm. He counseled that, “The most important thing a company should keep in mind when deciding whether or not to take up a political position or get involved in a controversial social issue is to determine if the position is in line with the company’s brand identity.
“Consumers have little tolerance for being caught off guard by a surprise move that does not meet with their expectations of how they perceive a company,” he said. “Conversely, if a company has a longstanding history of fighting for causes that are important to them, even if they are controversial, consumers are not going to balk at those choices.”
Patagonia’s Track Record
Conesa said, “A perfect example of this is the outdoor clothing company Patagonia. That company has a long track record of championing legislation that protects the environment, so when the former president announced legislation that eliminated protections for environmentally sensitive lands, people would have been shocked if Patagonia had not vociferously opposed that move.”
Facing Minimal Backlash
“On the other end of the spectrum, you have companies like Chick-fil-A and Hobby Lobby that have long made their religious beliefs a part of their brand. So, when they voice their positions on issues like gay marriage or refusing to cover contraception for their employees under Obamacare, they tend to escape with minimal backlash and few long-term consequences,” Conesa concluded.
The Employee Side Of The Equation
Whether and how corporations address issues such as social injustice and racial inequities can matter to employees.
Edie Goldberg is the president and CEO of E.L. Goldberg & Associates and an expert in talent strategy and organizational effectiveness. “It used to be that companies tried to stay out of taking political or public policy conversations,” she said. “However, today’s employees seek out employers that take a stand on issues of importance to them. It is one element of providing purpose and meaning at work. There will always be employees who disagree, but leaders need to stand up for their company’s values.”
A survey of 2,501 employees in the U.S. provided insights into what some workers think about the positions their companies have taken on recent hot button issues. According to the recently released Workforce Mindset Study from Alight Solutions, “…less than half of U.S. employees feel proud of how their organization responded to the demonstrations in 2020.
The study found that:
- During periods of social unrest, 51% of employees said their employer communicated about inclusion and diversity, but little action was taken afterward. A quarter of employees said their employer took no action at all. This disappointment runs counter to employee expectations when it comes to engaging and fostering support around social causes.
- 60% of employees said taking a stand on social justice and political issues is an opportunity for employers to separate themselves from the competition.
- 4 in 10 employees believed their employer needs to do more in response to social justice efforts—and that number jumps to 66% for Black employees.
Compare With Core Values
Rosalind M. Chow is an associate professor of organizational behavior and theory at Carnegie Mellon University’s Tepper School of Business. She said, “Companies should be looking to their values/mission statements to determine if a given policy/social issue is relevant. If it is, then it makes sense to speak to it. If it’s not relevant, then they are taking on potential risk that may not make sense.
“If they are going to speak to an issue, they should provide concrete actions that they plan to take to address how the policy does/does not align with their core values.”
“For example,” Chow said, “in the case of voting rights, it is not sufficient for corporate leaders to say that they are disturbed by the legislation. They should say what specific actions they will take so that their business is aligned with their stated values. That might mean no longer considering business opportunities within a given region, putting more resources into voting efforts on the ground, giving paid time off to employees so that they can vote without incurring a cost, etc. This is so that external audiences don’t perceive these statements as being completely hollow.’
Advice For Business Leaders
Nancy Halpern is the founder of consulting firm Political IQ. She recommended that CEOs keep the following advice in mind when deciding whether to take positions on or advocate for or against controversial political and social issues.
Time Is Not Your Friend
“It is better to come out early with a strong point of view than to leave people guessing (in which they can infer you don’t care) or too late to have an impact (e.g. Delta and Coca-Cola will be accused of ‘ playing it safe’ for their position on the Georgia election laws after the vote),” she noted.
Responsiveness Beats Reactivity
Halpern advised that, “ It’s better to come out immediately and demonstrate appropriate emotion (e.g. empathy, concern, etc.), identify your next step (e.g. talking with the greater community, making sure the position is aligned with your company’s values, etc.). Although many companies came out fast (i.e. reacted) after George Floyd’s murder, they were also heavily criticized for saying the right thing fast but [not] doing much else.”
Stakeholder Analysis Will Help Decide
“You’re not a fortune teller—you can’t predict how large or temporary any social or political issue is,” Halpern saiid. “But you do know where your own political power base is as a company. Board? Shareholders? Advertisers? Brand value and reputation?,” she asked.
Employees’ Voice Is Getting Louder
“Look at the recent resignation of the Teen Vogue editor— that was spearheaded by employees not by advertisers or the Board,” Halpern rccalled. “Younger employees are emboldened by social media to take a stand with less risk than they would have felt even 5 years ago. Will they support you or turn against you?”
Use Your Heart And Your Head
“Companies will fear alienating customers and suppliers no matter what they do. And that might happen,” according to Halpern. To make this decision, pull in not just your chief marketing officer and chief financial officer but [also] your chief human resource officer, your diversity people, and a few rising stars in the organization.
“The C-Suite is often in their own bubble, and open minds and hearts will broaden anyone’s thinking,” she concluded.