TO TAKE A STAND OR NOT. WHAT IS A COMPANY TO DO?

Ken Makovsky

It has been a fact of life for some time that many employees want companies to take social stands on certain universal issues, and many companies do it. This is in contrast to not that long ago when companies would not touch a social issue with a ten foot pole. It was considered high risk and very controversial to do such.  Potential consumers and recruits could be turned off.  

Today, not only is the reverse true but employees are actually staging revolts to force a company to take a public stand.  There are many examples of this. Think Google and the employee revolt to get Google to publicly take a stand on Trump immigration policies, the employee revolt at Walmart to get the company to stop selling guns, and on the corporate initiated side, also supported by consumers, some banks won’t lend money to companies running immigration detention centers.

What changed from the days when taking a stand on a social or political issue was not acceptable? Several developments occurred.

Transparency became a watchword. It is the key to credibility, Not observing transparency is a violation of trust. Nothing works without integrity.  

Individual expression is practiced every minute of every day over the internet. We talk about how we really feel on every social channel. We go overboard to report on our actions and whereabouts all day long. We comment on likes and dislikes on minutiae.

What’s inside is outside. What we are thinking and feeling privately, if revealed to anyone, gets out publicly. It is hard to keep confidences. The privacy factor has been damaged. Mores have changed.

Researchers from Duke and Harvard say their research shows that “CEO activism can sway public opinion.” Other research reveals that millennials are significantly more likely to buy products as well as work for companies if the CEO takes stands on controversial issues that impact the company.

There is power in numbers.  Social movements build on the internet, exerting pressure on companies and other interest groups to take positions they might otherwise not take.

So what is the middle ground here?  Listen to your customers. Examine what they think before acting.  If you do take a stand, says the CEO of CyberAlert, do so only on public issues of real import to the company.

According to J.W. Smith, executive chair of the Futures Co., in Marketing News, “a political stance will not grow a brand or increase its stock value, but it can alienate consumers. Brands seek to increase sales by winning NEW customers.  They can’t afford to alienate a large percentage of their buyer base.

“Some think brands’ political stands can increase sales by strengthening loyalty of core audiences.  However, loyalty does not increase a brand’s sales, since loyal customers already regularly purchase its products. Instead, brands grow by gaining NEW customers.  Brands prefer to build their franchises on COMMON GROUND.”