America’s CEOs: Now is The Time to Take a Stand
Edited op-ed originally published in the October 2, 2020 edition of Boston Business Journal
America’s new social awareness can mean big dollar signs for American companies, but there’s a thin line between leaning in and cashing in. There’s big rewards for those who can empower social progress, but big risks for those who simply exploit it.
Historically, for-profit companies have been afraid to take a stand on political and social issues out of a fear for how it would affect their bottom line. Now, they have reason to fear staying silent.
By mid-April 2020, over 65 percent of national brands started shifting marketing strategy to more mission and cause-based messages. Here in New England alone, Timberland pledged to plant 50 million trees, Dunkin’ is banning styrofoam, and Gillette is redefining masculinity. They all understand they have a moral responsibility to stand up for what they believe in. But just as importantly, they recognize a huge financial opportunity.
According to a recent study by Porter Novelli, 88 percent of consumers are more willing to shop at, 68 percent of employees are more willing to work at, and 54 percent of investors are more willing to fund businesses that demonstrate a commitment to shared values. Twenty years ago, morally responsible and financially responsible decisions were at odds; now they are often one in the same.
But even well-intended campaigns can fail in execution. How can CEOs and chief marketing officers be certain their social initiatives are going to do good, not harm, to their bottom lines and the world around them? There isn’t a clean answer in this era of heightened social awareness, but here are a few common sense suggestions.
- Doing nothing is still a decision. When Indiana discriminated against the gay community with its 2015 religious freedom bill and when North Carolina discriminated against the trans community with its bathroom bill in 2016, businesses like PayPal, Salesforce, Yelp, Apple, Angie’s List, Adidas, and Deutchse Bank all stopped investment in those states. They drew national attention and put pressure on state governments to repeal the discriminatory laws. These companies could have easily proceeded with business as usual, but they stood up for the LGBT community because they understood that the cost of doing nothing would be devastating.
- Inclusion at the leadership level is critical. Pepsi’s 2017 campaign featuring Kendall Jenner parading for social justice was a disaster. Compare that to Nike’s record-shattering 2018 campaign with Colin Kaepernick, who risked his personal safety and career to take a knee for Black Lives Matter. By building the campaign around his voice, Nike was rewarded with $163 million in free media, $6 billion in brand value and a 31 percent sales increase in a single year. Kaepernick demonstrated that he wasn’t just a face on a poster by later questioning Nike’s new star-spangled sneakers, causing them to discontinue the line immediately.
- Words must be backed by actions. Don’t participate in rainbow capitalism or green washing. If you support women, show it outside of Women’s History Month. Don’t run a commercial about how much you care for the front line workers and first responders in the coronavirus pandemic without offering real, meaningful, financially significant support for them.
- Consumer behaviors and opinions can change. Market tests are important, but often underestimate how many people will follow your leadership. For example, Burger King is among the last places one might expect a vegetarian to stop for lunch. Yet their meatless Impossible Whopper sparked the company’s 5 percent sales increase for Q3 of 2019 — their best quarter in four years. The result is a meal that is better for our health and for the environment, and most of all, better for Burger King’s bottom line.
Don’t let the fear of being cancelled stop you from doing what’s right. Just remember that there is a right way and a wrong way to “do what’s right.”
Concrete actions that promote social progress can be the key to meaningful publicity that drives lasting customer loyalty and real-world change.
Two decades ago, social causes would have been lucky to have your business backing them. Today, you need them as much as they need you.