Thanks to MultiView Association Management for supplying this article.
by Leslie Gaines-Ross
The unpredictability of our current political environment, in the U.S. and around the globe, has drawn company leaders into a maelstrom. CEOs don’t know whether a presidential tweet will bring their company into the limelight, or whether a controversial policy will pressure them to speak out. For example, there was anxiety among CEOs about how to respond to President Trump’s recent executive order restricting immigration. There’s even an app that notifies users when the president tweets about a particular company.
Should executives respond when a tweet or unexpected event touches their business or rouses their employees and customers? There are risks and rewards to CEO activism. Weber Shandwick, where I serve as chief reputation officer, and KRC Research surveyed 1,050 senior executives and 2,100 consumers across 21 markets worldwide to find out what people expect from corporate brands.
Our research shows that the two biggest factors that influence respondents’ opinions about companies are what customers say about them (88%) and how they react in crisis (85%). In fact, how a company responds to a controversy, including how quickly, is more important in driving public perception about the company than what is said about that company in the media (76%), by employees (76%), on the company’s website (68%), by spokespeople (61%), or in the company’s advertising (61%).
Some of the insights we learned offer guidelines for how CEOs should act to preserve their companies’ reputations in today’s highly politicized environment.
Staying quiet about issues may no longer be an option. CEOs are being pressured by several stakeholder groups to speak up on controversial issues. We found that 46% of executives from large companies around the world prefer that companies speak out on issues such as climate change, gun control, immigration, and LGBT rights. This has gone up from 2014, when 36% of global executives we surveyed said that it was important for CEOs to publicly take positions on policy and political issues.
Among executives who reported working in companies with world-class reputations, it was even more pronounced: 63% of these leaders favored companies taking a public stance. While fewer consumers (41%) said companies should speak out on controversial issues, it’s clear that there is outside pressure for CEOs to use their voices.
So it is not surprising that more than 100 CEOs, mostly of leading technology companies, publicly opposed the executive order on immigration by filing an amicus brief, arguing that the order jeopardized their workforce diversity and their corporate values. Such speaking out isn’t specific to the new administration. Last spring several of these CEOs opposed state legislation that was perceived as undermining LGBT rights.
Of course, not every company needs to publicly weigh in on every social issue or political action. In our study, 20% of global consumers reported not being in favor of companies speaking out on controversial issues, while 34% said speaking out “depends,” presumably on the issue and how closely it aligns with the company’s business. The remaining 5% said they did not know.
It is critical for executives to be prepared to make a decision about taking a public stand. Although no one has quantified the risk of not speaking out, the pressures to take a stand from employees, industry peers, and customers seem to increasing. At Oracle, for example, hundreds of employees signed a petition for the company to join the aforementioned amicus brief.
Be ready to respond. CEOs should anticipate potential threats to their companies’ reputation and prepare responses. Weber Shandwick’s research has found that the average time it takes companies to activate a social media plan to respond to a crisis is 38 hours. But a lot can change in a day and a half.
Crisis simulation training is one way companies can prepare for any unexpected political publicity. Here’s one example of a scenario that Weber Shandwick uses with clients: Say your company needs to ship a small allotment of goods to Boston from outside the U.S. to meet sudden demand. A few hours later, a fake news site publishes an article about how your company is moving production outside the U.S. to take advantage of U.S. tax laws and is cheating American workers out of jobs. Before long, the fake news leaks into mainstream publications and social networks, hackers demand money before exposing customer data online, an angry employee rants about the company on social media, media calls start asking for an official comment, and a competitor or government official tweets something negative.
Simulations like this force leaders to think about not just what to say, but how to say it and to whom. CEOs and their teams should seek to understand what their stakeholders expect of them and build a playbook that lays out what they can and can’t do when facing a reputation crisis.
Personalize your narrative. Leaders know they have to tailor a message or narrative to their audience. Taking a stand on a public issue is no different. When speaking out, CEOs should establish a storyline that connects the issue to their employees’ and customers’ everyday lives.
In responding to the executive order on immigration, for example, some CEOs made their messages very personal. In a Facebook post, Mark Zuckerberg talked about his family’s history with immigration and explained that “these issues are personal for [him] behind [his] family” and that “we are a nation of immigrants.” Apple CEO Tim Cook talked about how the executive order affected both Apple employees and society as a whole and explained that Apple cofounder Steve Jobs was a child of immigrants. Cook said, “Our company depends on diversity…of thought, and people generally have diverse views…. It’s the tapestry of getting people with all different backgrounds and all different point of views that are able to create the best products.” This kind of personalization resonates with his various audiences, including employees, customers, vendors, and even job candidates.
Remember: There is strength in numbers. CEOs who find themselves having to respond to a political or controversial issue should consider working closely with industry peers or trade organizations to establish and present a common front. It demonstrates a show of force and increases clout. Moreover, it’s harder for opponents to question or criticize the motives of a sizable group of leaders when they release a joint statement.
Last spring, for example, over 80 CEOs and business leaders signed a petition seeking the repeal of the North Carolina “bathroom bill,” legislation widely considered to infringe on LGBT rights. In November the National Association of Manufacturers released a letter from more than 1,100 manufacturing and business leaders pledging to help bring the country together after the divisive presidential election and asking the president to make manufacturing a top priority. Even more recent, on February 1, 2017, 100 trade groups and retailers joined together in a campaign, Americans for Affordable Products, to oppose the Trump administration’s border-adjusted tax plan that some critics say would contribute to higher consumer prices.
Be consistent. Whatever position CEOs take should be consistent with their companies’ values. Many employees identify and internalize such values. When several CEOs took direct action after the immigration executive order, they were seen as acting consistently with their companies’ values systems. Some companies have demonstrated that they share employee values by matching employee donations to specific charities.
Sticking to these values matters for a company’s reputation. What a company stands for means just as much to job seekers as what the company makes and sells. The vast majority of respondents in our study, 77% of consumers and 95% of executives, reported that if they were looking for a new job today, the reputation of the employer would make a difference in their decision. Millennial consumers are particularly influenced by company reputation when looking for a new job (85%), which could mean they’re more likely to seek out an employer that shares their values.
In today’s environment, CEOs may find themselves under pressure to speak out on an issue. Should they decide to take a public stand, having a strong reputation will lend them extra credibility and influence. These guidelines can help them preserve their reputations in the face of extreme politicization.