Can a CEO activist win the culture wars? New data shows the way.
For most of my career, when a CEO asked if they should wade into a contentious public issue the correct answer was always “no.”
Today, the inactive CEO can be perceived as indifferent. Millennial employees and customers (in particular) admire companies that share their values and expect action. Meanwhile, large chunks of a CEO’s customer base often don’t agree on certain issues, nor do they think its appropriate for executives to enter the public square.
So what’s a CEO to do? Proceed carefully, and look at the data before you leap.
A recent article in the New York Times (Culture Warriors) sums up this new CEO quandary, and wonders aloud if we’re moving towards red/blue branding that reflects each company’s tribal affinity. Yikes!
And a Wall Street journal piece (CEOs and Politics) shows the intense heat that can be generated when a CEO’s activism/altruism is questioned, in this case Blackrock CEO Larry Fink. Ouch!
Both are cautionary tales and worth the read. Fortunately, a recent HBR article (The New CEO Activists) by Aaron K. Chatterji and Michael Toffel finally provides some much needed data and perspective to help CEO’s (and their high priced consultants) make better decisions.
Read the above article (slowly), but here are 3 quick takeaways:
1. The issue a CEO takes a stand on better be meaningful to them personally, and relevant to their business: CEO activism is not for the faint of heart, so strap in. In a Weber Shandwick survey 40% of respondents said they would be more likely to purchase from a company if they agreed with a CEO’s position, but 45% said they’d be less likely if they disagreed with a CEO’s view.
2. How a CEO frames their argument is the key to making friends as opposed to enemies: Pfizer’s climate pledge to reduce its own carbon footprint by 60% improved brand favorability from both Republicans (+37%) and Democrats (+52%), suggesting that “being the change” can be more effective than suggesting the change in others.
3. Championing less divisive issues is more likely to improve the brand image of a CEO’s company: Americans tend to approve of corporate activism on economic and public health issues more than activism on social issues. For example, 84% of respondents thought it appropriate to take a stand on minimum wage equality whereas 49% thought it appropriate to tackle gun control. And in terms of public health, when CVS quit selling tobacco products brand favorability rose nearly 24% — equally among Republications and Democrats, proving there are some things we agree on.
In the end these are tough issues made tougher by the fact our professional judgement is so often informed (whether we like it or not) by our own personal convictions. My suggestion for CEO’s tempted to wade in? Surround yourself with plenty of smart, opposing viewpoints and lots of data. And then tread carefully because these waters are deep.
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