It sometimes seems like everything these days is political. During this week, election week, perhaps it should be. But in a deeply divided (and pretty evenly by the looks of it) country, how smart it is for corporate leaders to wade into the political morass or the cultural wars that accompany politics?
Over the past few years, there have been increasing calls for CEOs and other corporate leaders to take public positions on hot-button political and social issues of the day. The argument in favor of activism is two-fold. First, that executives lead not just companies, but rather “social enterprises” that demand a degree of activism on cultural and political fronts. Second, a CEO’s high-profile status provides that leader with a “platform” that should be used to speak out on social, cultural, and political controversies. The leader herself, the thinking goes, is somehow obligated by her position to “take a stand” for the whole company on issues such as climate change, immigration, guns, identity politics, foreign policy, abortion, and so on.
Politically vocal companies or CEO’s may be well-meaning, but in many cases their speaking up and taking a stand seems less like a moral imperative and more like trendy virtue signaling. Or, more cynically, marketing on the back of a heated controversy.
We do not agree with the famous remark by economist Milton Friedman that the only social responsibility of a business is to increase its profits. Firms don’t just make money – they are also guided by values and should think of themselves as microcosms of society and as powerful movers in helping to create a good society. And their leaders need to think constantly about the “good society” they are creating inside their own organizations; how they help shape those values and what “good” means to employees, customers, immediate community, and other stakeholders.
Even so, we are leery of the call for corporate executives to get political in this divisive climate. Being a leader of a company or other enterprise does not automatically confer on one either the wisdom or the privilege to make decisions or speak out on complex cultural or political issues – especially if only peripherally related to the company’s business. No corporate leader would think of making a quick financial decision without expertise, background, training, research, modeling, or counsel. And yet many senior executives seem increasingly pressured these days – especially by their younger or most politically active employees – to do just that on controversial social, political, and public policy issues.
Sometimes because of role, personality, circumstance, institutional position, or community corporate leaders must get involved in political or cultural issues that are deeply interwoven into their strategy, constituencies, or business model. But that is and should be rare. We counsel caution for everyone else and offer a few thoughts for leaders to think through before they jump with their organization into the culture wars or political activism:
Is it good business?
Pragmatically, we wonder about the wisdom of a company leader taking positions that could alienate some or much of their customer base or other stakeholders. It is an apocryphal story that a politically-hesitant Michael Jordan observed “Republicans buy sneakers too,” but the sentiment is understandable.
The United States (and much of the rest of the world) is clearly in the midst of a culture war—perhaps the most intensive in living memory and fueled by social media and other social phenomena. Nearly every point or topic these days seems divisive and everything is politicized—from business to sports to clothing. What are the benefits of politicizing your business?
Are you and your advisers seeing this objectively?
Sometimes it is hard to see that not everyone thinks the way we do. As leaders, we tend to spend our days with people who are more or less like us. Likewise, our country has, for the most part, been split into geographic, demographic, and economic pockets of homogeneity where we applaud each other for holding similar opinions on what are often very divisive issues—issues about which other good and logical people can feel differently for good reasons. Leaders need to beware of operating in a vacuum and assuming the moral certainty of same-thinking environments. It is easy for leaders who don’t stay open to multiple perspectives to fall into thinking that there is only one way to understand problems. Or that the other side – that entire other half of the country – is just “wrong.”
Is this the only or best way you can show your stakeholders that you have values?
Some CEO’s and corporate activists say that despite the market risk of alienating up to half their stakeholders, their leadership stature still demands that they express their corporate values on controversial social or political issues. “To be silent would be cowardly – the opposite of leading! We are values driven here at Company X.”
But political activism or wading into the cultural war is neither the only nor best way your company can demonstrate its values. Many have heard the expression that “the only thing necessary for the triumph of evil is for good people to do nothing.” This admirable statement of moral courage is often the rationale for those who promote corporate activism and visible CEO leadership on controversial political and cultural issues. We can’t just stand by while this happens! But it is a false argument that if a company or company leader does not act in in the political and social arena then that same enterprise is somehow less moral, values-driven, socially-connected, or even engaged.
Corporate values are fundamental – and companies should live them in their firm. But translating a corporate value of, say, “inclusiveness,” for one’s company into a specific political position on immigration policy, climate change, or foreign interventions can be a stretch – and perhaps not one on which even most corporate stakeholders would agree.
Is your corporation the place through which to express yours or your employee’s politics?
There is a reason (many actually) why in a participatory democracy we do not have corporations vote once and in only one way on behalf of all their employees. That could never possibly be fair or representative. Corporatism has never been a one-employee/one-vote structure. “Voting” on behalf of your employees imposes your corporate politics on theirs.
Political democracy however, is one-citizen/one-vote. And in that system citizens and their elected representatives are the mechanism through which we choose to address intensely complex issues of policy. Citizens can further participate in politics, policy, and society through a myriad of private and volunteer organizations. Perhaps it is fairest and most effective to leave politics to the political arena and not your corporate one.
Are you equipped to be a thoughtful political leader?
Besides the arguments as to the suitability of the institution for political/cultural activism, we also need to think about the suitability of the leader. What makes anyone think that an executive at a clothing manufacturer, coffee retailer, or tech company has some special expertise or a qualified voice on matters of public policy that could somehow add to our system of political representation? If they do, they can express it in many ways and in many forums rather than by use of their corporate “platform.”
Those of us entering or well into middle age will note that younger employees often seem to demand that their leaders and employers be active in the culture wars. To this we also urge caution. Companies don’t let their newest and most passionate employees run the firm—why should they let those same employees determine what political stances the company should or shouldn’t take? Leaders lead and are trained for that job. They have accountability or responsibility for wisdom, judgement, and results. Leaders should be careful not to let admirably passionate young employees, advertising agencies, or advocacy groups separate them from their responsibilities to all stakeholders.
There are very few CEOs who were chosen for their jobs based on their background and competence in public policy or social-issue leadership. CEOs are not public servants and their firms are not political polities. Instead, corporate leaders are chosen based on their abilities to deliver value to customers, employees, shareholders, and other stakeholders by enabling the firm to thrive in its mission and core purpose. Making good and responsible values-based judgments on the issues confronting their company is challenging enough. We’ve seen of late how uncomfortable politics can get for leaders of firms like Google and Facebook. Managing affairs inside a firm is hard enough without also trying to be a political player on the national stage.
Do we need more political actors?
Leaders should work hard to develop their wisdom and judgement on issues much broader than their balance sheet—we devote an entire chapter of our recent book to an argument that effective executives must broaden their sources of authority. We have found that leaders who work to equip themselves to deal with legitimately competing values tend to be thoughtful and careful about dismissing the “other side” out of hand. They think and act carefully on whether or why their firm should have a singular political position on a public policy issue that may animate water cooler talk, but is peripheral to their business and stakeholders.
In these highly political and culturally divisive times, where civil dialogue has in many cases been replaced by polarization and name-calling, we caution leaders and corporations to consider whether they have the right, the processes, the background, the standing, or the authority to dive into controversial issues in a way that would benefit all their stakeholders.
More Info: forbes.com