CEOs: Get Political at Your Own Risk

Note Taking at Event

A recent article in the Los Angeles Times featured the results of a Weber Shandwick study on the impact CEOs may have on their companies’ performance when they take public positions on political or controversial issues. The headline didn’t say it all, but it was pretty accurate: “CEOs are getting more political, but consumers aren’t buying it.”

Before getting into detail on the article and the study, it’s worth noting that no matter what a CEO does in terms of communication, there has to be a good business reason for doing it. Otherwise, the entire proposition is based on ego and not the principles of good business. It is also important to know that “doing the right thing” is never mutually exclusive from doing business the right way.

When an organization meshes social responsibility with other business initiatives, we call it corporate social responsibility. When marketing is driven by the same motivations, we sometimes call it cause-marketing. But when a CEO builds a communications program around his or her own positions on issues, it can get personal and now emerges as “CEO activism.”

The Weber Shandwick Takeaways

Here’s what Weber Shandwick found:

  • 36% of consumers polled said they felt media attention was the primary reason some CEOs take public positions on political or social issues. According to the LA Times piece, the three most recognized CEOs who do this were Starbucks’s Howard Schultz, Facebook’s Mark Zuckerberg, and Salesforce.com’s Marc Benioff.
  • 21% of those surveyed felt CEOs took public stands to build their own reputations.
  • 14% of the people questioned thought CEOs actually took public positions did so to “do what is right for society.”
  • 40% of survey participants said they were more inclined to buy something from a company if they agreed with the CEO’s views.
  • 45% of those questioned responded that they are less likely to make purchases from CEOs if they disagree with the sentiments.

The Weber Shandwick study polled 1,027 adults.

Lessons for Other CEOs and Companies

The questions a CEO of any company needs to ask when considering taking a public position on a political or controversial issue are:

  • What is the risk to sales?
  • What is the risk to existing and potential customer relationships?
  • Will not weighing in on the issue cost my business?
  • Is my position on the issue in sync with those of my customers, clients and other important stakeholders?
  • Do I and my organization have credibility on the issue? Or, put more bluntly, is this any of my business?
  • What do I have to gain?
  • What do I have to lose?
  • And perhaps, most importantly, is my position really the only way to go, or is it just one side of an issue … just my opinion?

The last question gets to the core of it. Controversies and political issues by nature can be polarizing. When a CEO takes a strong position on an issue, it can be assumed to alienate up to half or more of a company’s employees, customers, vendors and other stakeholders. Is it worth it?

How Should a CEO Use the “Bully Pulpit?”

Then there is the issue of the “bully pulpit.” This goes beyond simply trying to appeal to employees or risk alienating them. President Theodore Roosevelt used the term to describe how he used his position of power as president to push his agenda.

Power comes in three parts: compensatory, conditioning, and condign. A CEO has all three at his disposal. He can incentivize and reward those who agree with him through compensation. He can condition those who work for him through a range of persuasive techniques. And he can punish those who disagree with him. Employees at every level know this.

So the ultimate question becomes: Is advocating a particular position on an issue a wise use of a CEO’s leadership capital?

The question is inherently situation-specific, but there is no doubt that once a CEO does decide to venture into CEO activist waters, there is risk, and all too often there is no turning back.

If you have a specific question on this or would like to discuss, please feel free to get in touch.


Originally published at O’Brien Communications.