The Next Business Drivers: Corporate Character And Social Capitalism
By Rick Murray, Managing Partner
One brand, two brands, red brands, blue brands.
It’s come to this: I’ve noticed that brand marketers, who have long sought to plant inspirational and aspirational images in our heads, are now ensnared in partisan politics. Boycotts have been announced against companies whose recent decisions to do what their leadership believes are the right things aren’t landing well with those who believe that it most assuredly is not.
Just as is the case with every elected official, CEOs have constituents they report to. Senators are accountable to the millions of residents of their states. The CEOs of Coca-Cola, United Airlines and Delta Airlines are each accountable to exponentially more with their vast, global bases of employees, customers, consumers, investors and more. The consequences of poor decision-making, however, are the same: You lose your job.
Leaders across corporate America don’t take an oath of office, but they do sign a contract. Most businesses have a well-defined set of values that establish their principles and codes of conduct that set behavior expectations for their employees, partners and suppliers. Most also now have well-articulated policies, plans and programs to promote diversity, equity, inclusion and belonging in their businesses and the communities in which they operate. Corporate action and progress against these and other social capitalism initiatives are increasingly under the microscope.
The Role of Brand Character In Social Capitalism
The difference between words and actions in any company comes down to character. This is not the character of the company per see. It’s the character of the C-suite and each member of the Board to which they report. We all have different values and beliefs. We all think and respond differently when faced with the same situation. Ideally, every decision made by the C-suite lands well with the vast majority, but none will ever make everyone happy. And that’s as it has always been.
Today, CEOs and their leadership teams are under intense pressure. Not just to grow, but to grow while doing right by society and the planet. The challenge they face is that the standard of what is “right” isn’t defined at a global, national or corporate level. It’s innately personal. As well as heavily influenced by media and self-selected networks on social media as many people seek out, consume and share news that aligns with their beliefs.
It should be no surprise to anyone that there are alternate points of view held by people in every company on almost every societal, political and economic issue facing us today. There always have been and, quite frankly, always will be. But it’s only within the past 10 years or so that individuals have felt empowered to leverage their personal points of view to help effect the kinds of change that they want to see, even at the corporate/brand level.
Marketing For A Demand In Conscious Business
A study conducted by my company last month surveyed American consumers and found 60% of respondents expect companies to weigh in on social issues. Two-thirds of that group want to see a formal statement or press release announcing the company’s position. But doing so is a game of reputational chicken. More than one-half (53%) of consumers claim to have switched brand loyalties because of a position a brand took (or didn’t take) on a social issue. This number grows to 60% among the prime 35-44 demographic.
As marketers, our goal is to capture the greatest possible share of wallet from the broadest possible audience. Going forward, the size of that audience will be impacted by the positions a company’s leadership takes (or doesn’t take) on the issues of the day, the polarity of popular opinion on those issues and the actions taken to support its position inside and outside the company.
The current environment is steering us toward a market in which brands big and small choose to be defined by their audiences’ values and beliefs. Are they red brands, blue brands, purple brands and/or green brands? For marketers, and especially those leading brands with mass-market appeal, this presents a real dilemma.
Ultimately, leaders need to take control of the decision-making as to whether to weigh in on social issues or not. While knowing that whatever decision they make may well put the reputation and financial performance of the brand(s) and organization at risk. They must also lead their organizations in recognizing and seizing the imperative of operating and marketing with a conscience. These are the kind of brands and companies that earn the public’s trust and respect every day. Not just when it’s convenient or opportunistic to do so.
I believe people with a conscience will soon be supporting companies (and leaders) with a conscience, those embracing and practicing social capitalism. In the end, the choice of what to do and when comes down to one of moral character. Start there.
Note: This article first published on Forbes.com on May 4, 2021.
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