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Brand Activism Matters Now More Than Ever...

Mon, 11/12/2018

Assessing how stakeholders respond to corporate activism and what happens when companies speak out or stay silent.

By Mary Mazzoni

Back in 2011, outdoor gear giant Patagonia shocked the country by taking out a full-page ad in the New York Times with the message “Don’t Buy This Jacket” emblazoned over its best-selling coat. The ad, which ran in advance of Black Friday, called on shoppers to “buy less and to reflect before you spend a dime on this jacket or anything else.”

Four years later, fellow outdoor label REI embarked on its own counter cultural Black Friday campaign. It shuttered stores, headquarters and distribution centers and paid its 12,000 employees to do what they love most—be outdoors. The hugely successful Opt Outside campaign quickly spread across social media and inspired thousands of Americans to ditch the mall in favor of their favorite outdoor activities.

In retrospect, these two examples represent the early beginnings of the now ubiquitous trend of corporate activism. Both Patagonia and REI took short-term financial hits - diminishing sales on the hottest shopping day of the year—in order to make a stand on issues their teams care about.

Fast forward to today, and both of these companies - and dozens more—have increased their activism ambitions even further. Mere hours after the Donald Trump administration announced plans to shrink the size of Bears Ears National Monument in Utah by up to 90 percent, Patagonia posted a brazen message on its homepage reading, “The president stole your land.” It also joined REI and other outdoor labels in a lawsuit against the administration to protect public lands.

Other well-known brands across multiple sectors have also jumped into the fray. Ben and Jerry’s released ice cream flavors to voice support for voting rights and racial equality. Companies including Bank of America, NASCAR, Lowe’s, and the NBA took public stands against North Carolina’s discriminatory “bathroom bill,” which required people to use public bathrooms that matched their gender assigned at birth, and their activism helped convince state lawmakers to rescind the legislation. When the Trump administration announced its “zero tolerance” immigration policy and separated thousands of children from their parents at the US-Mexico border, CEOs from top companies like Google, Airbnb and Chobani made their outrage loudly heard.

These cases and more represent what experts call a “sea change” in the private sector. Whereas companies could once stay silent during times of political and social upheaval, their stakeholders - from employees and customers to shareholders - now increasingly expect them to speak out.

Global communications firm MSL has keenly observed this growing trend from the start, and now it’s seeking more data to help business leaders understand what it means for them. This year, the company will complete a research study to assess how stakeholders respond to corporate activism and what happens when companies speak out or stay silent.

“We were noticing the activism of brands and CEOs taking stands, and we wanted to better understand consumer and employee expectations,” said Sheila McLean, senior vice president of MSL and director of its sustainability and social purpose practice. “In particular, we wanted to know what consumers and employees do when brands act—or fail to act. Do they reward them or punish them, and in what ways?”

Challenge and Benefit Go Hand-in-Hand

MSL’s primary question—how stakeholders reward or punish brands for their activism and why—is a poignant one. So far we’ve seen a groundswell of customer and employee support for outdoor gear labels and their quest to protect public lands. At the same time, firms often take flak for their opinions: Chobani founder Hamdi Ulukaya received death threats for his fierce stance on immigration, and companies from Dick’s Sporting Goods to Delta Airlines were threatened with boycotts for their positions on gun control.

This double-edged sword presents tough questions for business leaders, McLean said. “Our clients are definitely wrestling with how to navigate this environment,” she told TriplePundit. “They’re wondering how to decide when is the right time to take a stand and how to do that without alienating half the population, if you will. It's a very challenging time for brands in many ways - and for corporate leaders.”

As companies grapple with when and how to make their voices heard, time is a luxury few can afford. “The biggest challenge on this issue is speed,” McLean said simply.

“Social media can turn an issue into a crisis within hours. Take the Roseanne Barr incident: It was only about 12 hours from the time she sent that infamous tweet to the time when [ABC] fired her. That's very difficult for companies, because they have so many stakeholders to consider.”

Though MSL’s forthcoming research will offer new insight, the data we have so far indicates that companies must navigate these choppy waters if they hope to stay relevant in today’s economy.

Nearly 60 percent of employees at America’s largest firms (valued at $1 billion or more) think corporations should play a more active role in addressing social issues, according to a 2017 Povaddo survey. Roughly half said a failure to act would affect their decision to maintain or pursue employment with a company. On the consumer side, 77 percent of Americans say CEOs need to speak out when their companies’ values are threatened, according to a 2018 survey by Weber Shandwick, and roughly half believe CEO activism can influence government decisions.

“All the evidence we have seen suggests this is a lasting change,” McLean told us. “This movement is being driven as much by employees as it is by consumers. As the competition for talent heats up, most companies increasingly see social purpose as a critical piece of recruitment and retention. We have more clients coming to us to develop social purpose programs for those reasons than we do for consumer pressure.”

What To Expect Before You Speak Out

All of this being said, McLean warned business leaders to be cautious when considering an activist stance. Although the landscape around corporate and CEO activism is still evolving, she and the MSL team advise clients to stick with best practices that will likely be familiar to those with experience in values-driven business.

“Companies need to know and articulate on a regular basis what they stand for, and they also need to know where their stakeholder stand, including their customers, employees, shareholders and neighbors,” Mclean explained.

“This takes constant engagement, care and feeding,” she continued.

You can't just do a one-day workshop, figure out what your social purpose and values are, and then live with it for the next 20 years. It's something that is constantly evolving and has to be communicated on a constant basis to your internal and external stakeholders, so that if and when you decide to take action, it rings true and is authentic to who you are as an organization.

To put it simply: If your company is clear about its values, both internally and externally, you will be prepared to act quickly when issues arise - and you’ll be better equipped to defend your position when the naysayers inevitably chime in. “You can make a decision quickly,” McLean told us, “because everyone understands who you are as an organization, what you stand for and what you don’t. That makes those decisions a lot easier.”

The Bottom Line

Speaking out on controversial topics is uncharted territory for most business leaders, but the movement shows no signs of fading - meaning top brands and their executives will likely face increasing pressure to get used to it.

“Two things have happened that marked a sea change,” McLean explained. “One is that we've all seen the transformative power the private sector can have with technology, both the good and the bad. Secondly, there's a growing understanding that the problems we face are too big and complex for just government, individuals or NGOs to solve alone. We need the private sector to step up and contribute.”

Hundreds of business leaders came together together at the 2018 3BL Forum to discuss brands taking stands, what the trend means for business, and how companies can get involved. Along with MSL's research, 3BL Media and GlobeScan released their own study on corporate activism at the Forum. This type of information-sharing is in itself a sign that things are changing, McLean said.

“There's a lot less concern about competitive hoarding of information,” she concluded. “Companies realize that they can't go it alone. They need to work not only with other companies, suppliers and providers, but also with government and NGOs. These things are too complicated to fix with just one part of society.”

This article first appeared in the Autumn 2018 edition of the Corporate Responsibility magazine.

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