Thursday, December 20, 2018

Corporate Activism and the End of Silence

Corporate activism is growing and ushering in a new era. Never before have corporations been more involved in activism or felt more compelled to engage. What corporate leaders say or don't say can have profound consequences for their personal reputations and the reputation of the brands they lead. Businesses are standing up for environmental issues, LGBTQ rights, immigration policies, sexual harassment, gun safety and climate action.

As they come to the realization that ethics are as important as cost and quality, businesses are doing more than just leveraging issues to sell their products and services. They are engaging in brand activism campaigns that build awareness and promote a message.

A Triple Pundit article declared: "Companies are increasingly adding their voices to these conversations and more as the trend of brands taking stands goes mainstream." The article cited the successful corporate activism of Bank of America, NASCAR, Nike, Patagonia, and REI. Stakeholders ranging from investors to consumers now expect companies to take a stand. A Shelton Group survey indicated 85 percent of consumers share this view. An Edelman's 2018 Trust Barometer report indicated that 64 percent of people think CEOs must lead on social issues and not wait for governments.

Global communications firm MSL has studied how corporate activism influences stakeholder behavior. "The days of being everything to everyone are gone. Brands may choose to take a stand on a controversial social or political issue, based on a very clear understanding of who they are and who their customers are," Ron Guirguis, CEO of MSL U.S. explained. "Today’s social activism requires companies to do more than just the right thing—it’s requiring a much deeper understanding of the organization’s obligation to help solve some of our most difficult and divisive social issues."

Silence is no longer an option. Companies see risks associated with being perceived as disconnected from their customer's values. Increasingly they are being forced to take a stand. In our polarized environment this entails identifying and aligning a company's values with those of their customers.

Being controversial was once avoided like the plague. This has changed, it can now contribute to viral marketing, which is a powerful low-cost way of gaining exposure and reaching consumers in an authentic and organic fashion.

In the past the risk equation almost always tipped the scales in favor of inaction, nowadays that scale is weighted in the opposite direction. There is now more risk associated with inaction. Communicating values that align with consumers can help to sell your products or services. The key is knowing your customer's values. The world has changed and corporations that want to stake a claim must change too. 

Consumers are increasingly looking at a firms values to decide where they spend their money. Social and environmental issues are at the forefront of public consciousness, public facing brands that ignore this fact risk alienating their consumers.

These movements have power. In the wake of the Arab Spring we have seen how these popular uprisings can topple governments. In places like Romania collective opposition to corruption has forced a government to bend. In the US there have been massive protests against gun violence that has weakened the NRA.  Corporate activism is coalescing around social issues  like the women's movement and Black Lives Matter. We have also seen unparalleled environmental activism and some of the largest climate demonstrations in history.

In a Forbes article, Patrick Quinlan writes about the change we have seen in corporate activism. Quinlan is Co-founder and CEO of Convercent, a technology company that enables brands to instill ethics at their core of their organizations. Quinlan points to Jamie Dimon, chairman and CEO of JPMorgan Chase who has spoken about the "moral obligation" of the private sector.
"Not long ago, 'lay low' was the appropriate CEO response to political and social debates. Business leaders felt they could (and in fact should) stay quiet. And consumers, for the most part, allowed it. Some of the old guard stand firm in the traditional apolitical approach, but acceptance of corporate silence has been waning for years. Sustained social and financial pressure from activists and consumers has forced brands to make a choice," Quinlan writes. "This is a tipping point in a much larger ethical transformation occurring in tech and across nearly every industry. Fueled by the rise of social media, unprecedented brand transparency and a greater consumer emphasis on corporate integrity, ethics are weighed more heavily than ever. Laying low is over -- the future will be built on the companies that do the right thing...Brands are quickly concluding they must proactively and intentionally step up -- or else risk even greater ire from a new generation of consumers. ...The scale has irrevocably tipped. There’s risk in standing up, but it’s far riskier to stay seated."
Corporations had once sailed under the radar on polarizing social issues but a new era has dawned where it is no longer possible to avoid public declarations.

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