Dorothy Crenshaw May 10, 2016 | 01:08:16
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When The CEO Takes A Stand

There was a time when good public relations dictated that a CEO shouldn’t take a position on a controversial issue. A public stand, of course, can risk backlash among customers or employees.

Conventional PR wisdom may be changing. Starbucks chief Howard Schultz is known for his willingness to wade into treacherous waters – from healthcare reform to race relations. Apple’s Tim Cook slammed Indiana’s “religious freedom” laws last year. Salesforce CEO Marc Benioff has galvanized C-level opposition to similar laws that many see as discriminatory, including the infamous North Carolina “bathroom bill.”

But should a public company CEO take a stand? Some studies say yes — with caveats. According to research by Global Strategy Group, public opinion favors corporate engagement on political and social issues. Some 78% of Americans believe that corporations should actively engage on important social and political issues, and 88% say companies can influence social change.

Yet, as the study notes, we view issues through a partisan lens, and some are more polarizing than others. The 2016 GSG survey lists those with the top three “polarization scores” as Donald Trump’s immigration position, marriage equality, and the Confederate flag. Yikes.

CEO Visibility Can Drive Polarization…Or Not

Polarization is magnified when CEOs get involved. A Penn State study measuring responses to three divisive topics (marriage equality, health care reform and emergency contraception) confirms that C-level involvement leads to a real bottom-line impact – for better or worse. Most PR professionals recall – and still debate – whether Chick-fil-A CEO Dan Cathy’s stance against gay marriage was good or bad for the company. It usually boils down to how aligned the position is with a customer’s own view.
But there are many things that can drive reaction among customers and others. Here are some key factors from a PR perspective.

Knowing the audience.  When Whole Foods founder John Mackey bylined an op-ed against healthcare reform in The Wall Street Journal, it left a bad taste with many customers. The reaction was probably due to the disconnect between Mackey’s libertarian views and the progressive mindset of a typical Whole Foods shopper. A deep understanding of customer values should precede a decision to go public on a hot-button topic.

Age and demographics matter, too. Global Strategy Group research shows that those aged 18 to 35 are most likely to do business with companies whose positions on social issues align with theirs. It may be why Marc Benioff could leverage his influence with Georgia Governor Nathan Deal to strike down its religious freedom amendment earlier this year.  Georgia is a fairly conservative state, but Salesforce has huge economic clout in Atlanta, where its Pardot division is headquartered. Marketing technology employees tend to be young (just ask Dan Lyons), and as a native Atlantan, I can vouch for its progressive and relentlessly pro-business culture.

Relevance.  Another reason why Benioff can throw his weight behind polarizing issues while managing the reputation risk is that he frames it as protecting employees from unfair discrimination. That may not make his zeal any less divisive, but it creates greater relevance in the eyes of stakeholders.

Understanding the issue. Wading in impulsively on a complex political issue isn’t smart. Principles are one thing, but in the business world policy positions are complex. It’s one thing to press a state government on LGBT rights, — but what about doing business with other countries that openly discriminate against minorities or gay people? Those who take bold positions need to thoroughly vet them first.

Having your house in order.  The most accomplished of the outspoken CEOs preside over profitable, growing businesses. In a different situation, if a company were faltering or losing money, a political stance would be seen as a distraction or worse. But Benioff’s shareholders can hardly complain that his activities are hurting business if the company continues to flourish.
And that’s what it comes down to at the end of the day. A careful communications strategy is useful, and knowing your customers is even better. But in the end, the best reputation safeguards may be a track record of business success and a commitment to leadership – both in and outside of the company.

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