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.

Does Matt Lauer Hate PR?

People in PR-agency-land are getting steamed this week about our industry’s reputation. Again. Starbucks CEO Howard Schultz appeared on the NBC-TV’s “Today” to talk about his jobs creation fund, which will raise cash for micro-loans to small businesses, and host Matt Lauer was less than gracious.

Lauer allowed Schultz to outline the program, but he seemed to be trying to get the Starbucks chief to admit he launched the initiative to sell more lattes. Or, as he rephrased it later, for “PR” reasons. Schultz calmly responded that the fund has nothing to do with marketing or PR for Starbucks.

So, why is “PR” a dirty word, we ask? In a post wonderfully titled, “Matt…Matt…Matt…You’re Glib,” PRSA stirred things up about Lauer’s discourtesy towards Schultz and his dismissive attitude towards what we do.

PR Newser‘s Tonya Garcia has a different take. She suggests that Schultz could have responded along the lines of, “We want people to know that Starbucks cares about the issue and we’re going to let people know about it. And if that makes us look good, great.” In other words, de-stigmatize the question, and the term, by returning to its literal meaning. The broader point, of course, is that PR and philanthropy can coexist.

I love Garcia’s point, and she’s right. But I think the Matt Lauer brew-haha goes beyond that. As an industry, we’re being just a bit overly sensitive about our own reputation issues. Yes, they’re real, but sometimes, it’s just not about you.

This is one of those times. The point here isn’t Matt Lauer’s view of PR, or what the word “public relations” connotes. It says less about our industry than it does about, …well, my list is pretty long, but it includes the following: the deplorable state of morning talk show infotainment; the demonization of “big business”; the presumed liberal media bias backlash; and Starbucks’ own reputation, which has been shaded with misunderstanding. (I worked with Starbucks as a client for several years, so count me as possibly biased.)

But I think the PR mavens should simmer down and wait for the next opportunity to defend ourselves from attack. It’s bound to happen soon.

And for the record, there’s one word Schultz used that sums up the jobs fund program more accurately than “marketing,” “reputation,” or “PR,” at least for my money. That word is “leadership.”

Whole Foods, Healthcare, And The “S-Word”

Partly because it’s in my building, but also because I like and admire the company, I feel bad when Whole Foods is attacked. I’m referring to CEO John Mackey’s Wall Street Journal editorial that has many customers threatening to hang up their reusable shopping bags for good. The piece, which essentially argued for fiscal restraint and individual empowerment, has generated a firestorm among progressives.

So, let’s break it down. Many in PR have said that CEOs have no business taking on controversial issues. I strongly disagree. For a chief executive to take a stand on a matter of national importance, even a contentious one, can be a powerful differentiator and a strong expression of corporate and personal values. I admired Howard Schultz for advocating for healthcare reform several years ago. Schultz’s position dovetailed with a key aspect of the Starbucks workplace culture; it offers healthcare benefits to part-time employees. My rule for this kind of advocacy is to be general in public, specific (or partisan) in private.

Still, there was nothing wrong with the thrust of Mackey’s piece, which contained reasonable suggestions like tort reform and tax benefits for private health insurance, along with a call for a healthier lifestyle.  Mackey’s reputed to be a libertarian, and several of his ideas seem consistent with that philosophy, but that’s beside the point. Here’s where he veered off the path.  His article led with a quote, “The problem with socialism is that eventually you run out of other people’s money.”  The original author of the quote? Margaret Thatcher.

That’s right. The Iron Lady and the “S-word.” It doesn’t take a PR genius to see how likening the current reform proposal to “socialism” might strike a sour note among the Whole Foods crowd. It’s kind of like invoking Bill Clinton at a right-to-life meeting…confusing at best, offensive at worst.

Since the food fight erupted, Mackey has stated that his views are personal and don’t reflect the values of the corporation. He also protested that the paper’s editorial staff had added the subhead, which refers to Obamacare.  (This is true, but irrelevant.)  What is relevant – and regrettable – is that that Mackey showed a surprising lack of sensitivity to the values of his core customers. He should apologize for politicizing the debate with the reference to socialism and focus more on his company’s own commitment to employee healthcare – which makes his argument for individual empowerment very nicely.

For me, the whole thing leaves a bad taste, because the backlash will have a chilling effect on other corporate officers who want to express a well-reasoned point of view about a critical national issue. In my view, we actually need more CEOs like John Mackey to participate in the public dialogue. It’s also regrettable that one of his major arguments – that diet and lifestyle can address the root causes of poor health – seems to have gotten lost in the (organic) sauce. Now, there’s a credible position. Who better to make the case for individual commitment to better health than the CEO of a company that helps people make better food choices?

In late 2007, Mackey, a very wealthy man, announced he would forego further cash compensation, saying he no longer wants to work for money, and citing a call to service. That’s admirable. So is his passion for the brand he built after so many years. But, as CEO, he still personifies that brand, and he would do well to remember where his (whole grain) bread is buttered.