Moving from Corporate Responsibility to Corporate Action

I had the pleasure of presenting a rich and thought-provoking discussion around ‘moving from corporate responsibility to corporate action’ to the 3BL Association – an organization convening leaders and building peer-to-peer collaboration in CR and sustainability yesterday.  If you missed the presentation, here are the important points of the discussion.  Enjoy.

The corporate responsibility movement has grown out of the widespread skepticism and discontent with past corporate behavior.  In fact, in addition to the broad scandals of corporate abuse symbolized by the Enron case, it could be argued that business had been given tacit permission to transcend the moral code.  Today, pressures are being exerted by civil society, organized groups, and socially responsible investors. They have rallied and forced corporations to address things like inequity in pay scales, transparency,  sustainability, human rights, and labor practices.

Quickly these pressures spawned “best practices” in CSR – diversity programs; transparency initiatives and other efforts to share more performance data; environmental reports; social reports, and others.  But, such responses appear to have been too shallow when they were forced and not terribly distinctive.  Patching up the vulnerable parts of a company with a topical program is not the sign of an authentically integrated corporate citizen. Nor is philanthropy, per se, or so-called “cause-related marketing.”  What’s been missing for true credibility is consistent proof of authenticity.  And that comes from an understanding of the motives behind the company’s response to pressures and seeing those motives demonstrated in actions and a consistent presence of a set of values in all its decision-making.

This couldn’t be more important today as we live in morally charged times where a breakdown in the American social contract exists, where we’ve moved to a system where low wages are supposed to be made bearable by low consumer prices and a hodgepodge of government assistance programs, the polarization of media has left many skeptical of new from mainstream sources, and the social media echo chamber is shaping what people see based on their interests.  In this era of political polarization, in which we are increasingly sheltered in neighborhoods, social networks and workplaces, corporate neutrality is now outdated.

Increasingly today, we are now seeing companies channel the energy and passion of people’s beliefs to fill a moral gap and stand up and speak out to the injustices we are seeing in the world. The development of millennials populating companies, their expectations of how they want to dedicate their lives and how they want to spend their time — they don’t want to check their values at the door and just adopt a culture of whatever the company is they happen to work at; they want to live those values in the company in some way. They’re expecting more of their leaders – not just to lead the economics of the company but also to really promote the values of the company internally and externally. When they see the values of the company being violated, such as equality and diversity, in the societies in which they operate, they have an expectation that those CEOs will step forward and represent their values in the community.

The good news is that many have accepted the challenge.  CEOs of WeWork, Dick’s Sporting Goods and PayPal are good examples – from banning meat as a company expense to limit the company’s environmental footprint to banning the sale of guns in the face of rampant school shootings to cancelling economic investment in states that have discriminatory policies.  Political polarization in the U.S. is pushing corporate leaders to enter into controversial political and social debates.  Businesses have an obligation, and their CEOs as a result, to be a force for good.

The old conventional wisdom about getting involved in controversial political issues, around social issues in particular was to stay in the middle.  That has changed and much of the CEO and corporate activism we witnessed over the last couple of years has come in response to latest U.S. Administration’s announcements. Leading CEOs issued reactive statements on everything from the immigration ban to public lands legislation to the transgender military ban to white supremacy to the decision to withdraw from the Paris agreement.

We can expect more focused action because there’s an ongoing potential for technology innovation to make a meaningful difference in the quality of peoples’ lives, mobilization in the internet age will continue to provide new mechanisms for people to influence public policy which will continue to influence corporate agendas, and Millennials will continue to push their companies and leaders to action because a values-driven mindset is what they care about most.

Moving from responsibility to action is a natural evolution of the CSR and ESG programs that are transforming companies across the world. Previous efforts were identified as marketing-driven and corporate driven initiatives. Brand activism is emerging as a values-driven agenda for companies that care about the future of society and the planet’s health.

The underlying force for progress is a sense of justice and fairness for all. The role of corporate activism in society as a whole will only become more relevant. In a time where we face a deep and increasingly intractable tragedy of the commons in infrastructure, intellectual capital, and investment flows, corporate activism can be an important change agent. However, companies and their leaders would be wise to remember that values matter most when they are least convenient, and that the perception of convenience or inauthenticity can greatly undermine the engendering of consumer goodwill.

Here are 6 practical tips that I believe help companies better map to a goldmine vs a minefield:

  1. Know thyself.  Activism stems from your moral values. It should live through your company’s promise and internal behaviors.  It delivers on your social purpose. It’s part of your long-term strategy. It should be focused on the issues you are known to support.
  2. Know what your stakeholders expect and don’t let them down. You may think that your target market prefers that you steer clear of political topics, but do you really know? If your brand is either known for, or desires to be known for, making a difference in local or global communities, or if a policy directly impacts the people who are fans of your core product or service, you need to be seen and heard on the issue.
  3. Craft a message that aligns with your brand.  If consumers are becoming more focused on using their buying power to influence political change, they’re also becoming more sensitive to hypocrisy.  Stay true to the purpose and core competencies of the brand and make sure the message is 100 percent authentic. 
  4. Be sure your message is clear.  When President Trump called on the NFL to fire players who took a knee, Under Armor and Nike quickly came out with statements.  Nike’s responses were unequivocal and consistent with their brand platform, but Twitter was quick to target Under Armor for being wishy-washy with their statements and not walking their talk.  This current political climate, and the prevalence of social media, is forcing companies to have a political position as well as a marketing position.
  5. Know the end game.  How will you judge success?  Who are you trying to influence and what mindset are you trying to change?  Make sure you have the objectives clear before ‘taking a stand’ as a company or a brand.  Remember, long-term return-on-investment (ROI) is important but don’t forget about short-term benefits like salience and earned attention.
  6. Consider your motives.  Today’s consumers are constantly inundated with advertising, and they’ve become experts at spotting a fake.  Taking a political stand in an attempt to increase profits is a misguided plan that’s likely to backfire.  On the other hand, if you feel genuinely moved toward taking a stand, your customers will sense your sincerity.  The ones who agree will rally behind you, while those who don’t can at least respect your integrity.

Politics and business have historically been like oil and water.  In the past, companies kept them separated largely out of fear that saying the wrong thing could cost a fortune.  Now, times have changed, and customers are looking for companies that stay up-to-date on what’s happening in the world.  All stakeholders today want their dollars to go to businesses they believe in, companies will have to get used to taking a stand and, more importantly, knowing when to do so.