Brand and CEO activism

Nike Photo: Reuters

Companies need to ensure that political outspokenness aligns with their brands.

In response to the Stoneham Douglas High School shooting in Parkland Florida in 2018 that claimed the lives of 17, Delta Airlines announced it was cutting business ties with the NRA (National Rifle Association) arguing that they couldn't be associated with the NRA's divisive commentary on the event. In response, the state of Georgia - where Delta’s headquarters are located - announced that it was revoking a $40 million tax exemption for the company.

After Colin Kaepernick, the superstar quarterback of the San Francisco 49ers, kneeled during the national anthem before the start of a game in 2016, starting a protest movement against oppression of blacks in America, Nike named him the spokesperson for their 2018 Just Do It campaign ("Believe in something, even if it means sacrificing everything"). Kaepernick’s protest and Nike’s campaign were extremely polarizing and created very mixed and passionate responses.

Finally, Chick-Fil-A has come under fire and boycott efforts as the company’s founder openly commented against same-sex marriage and the company’s foundation supported groups that worked to prevent the legalization of same-sex marriage.

Gun control, inequality and gay rights are among the most politically charged topics in the US and still the leadership team at companies like Delta, Nike and Chick-Fil-A decided to take a stand. They follow a growing number of CEOs and brands that engage in "brand-activism" or "CEO-activism" (across a wide variety of contentious topics such as police violence, climate change, transgender rights, and immigration). Why are brands willing to take a stand on a political debate and potentially alienate some customer segments? When is it effective for brands to be engaged in politically-charged and controversial topics?

For some brands taking a stand is part of their DNA. Classic examples involve Ben & Jerry’s and The Body Shop that since their inception showed support for social and environmental causes, and their activism was intertwined with their business practices. For such brands, business success has always been one goal that must be aligned with social and environmental goals, and adopting the "triple bottom line" was natural as well as voicing their opinions on politically-charged topics. More CEOs believe today - like this illustration by Salesforce CEO Marc Benioff that they "need to stand up not just for their shareholders, but their employees, their customers, their partners, the community, the environment, schools, everybody."

For other brands, a political stand is likely to strengthen the customer-brand relationship. This might be the case if the brand’s target market is homogenous around a political worldview. Consider brands like Tweeter or Spotify with a customer base that is more liberal leaning, and you can make business sense of the decisions of their CEOs to criticize Donald Trump. An analysis of the Nike campaign further demonstrates that endorsing Colin Kaepernick backfired in the short-term and with some older and conservative consumers, but overall and over time was a huge success - among other things because the customer base of Nike feels comfortable with the message underlying the campaign.

Indeed, if a brand follows the route of political activism, it is important that the cause is perceived as aligned with the story of the brand, making the efforts look sincere. When Patagonia is supporting pro-environmental political candidates there is a clear value alignment, but when Pepsi connects a soda to a Black Lives Matter protest (the Kendall Jenner ad) brand activism can backfire.

Research into CEO activism has identified 3 key tactics that executives can follow: (a) non-confrontational, for example involving behind the scenes lobbying or campaign contributions, (b) raising awareness through a social media communication or an op-ed, and (c) exerting economic influence by making a relevant business decision (pausing an expansion, re-locating business activity) or openly supporting political or activist groups.

If as a manager you consider engaged in brand- or CEO- activism it is noteworthy - as a study has found - that American consumers tend to approve activism on economic issues more than activism on social issues.

Overall, in this age of polarizing politics, pressing social problems, and increased expectations from businesses to behave in a socially responsible manner, we are likely to see more brands and CEOs take a stand on controversial and political issues. Such brands and managers need to carefully plan their activism strategy, make sure it is aligned with the values and story of their brand, and plan their response to any - certain - backlash. Still, many business leaders will prefer to remain silent and focus on their business activity, following the famous statement by Michael Jordan - as he was asked to comment in 1999 as a successful African American role model on racial inequality and was expected to take a stand - that "Republicans buy sneakers too".

Professor Amir Grinstein studies and teaches pro-social marketing and entrepreneurship at Northeastern Universities in Boston and VU in Amsterdam. He writes on Twitter about behavioral research @AmirGrinstein

Yana Shechterman is an organizational consultant, executive coach, and part-time lecturer at Northeastern University in Boston. On Twitter @shechterman

Published by Globes, Israel business news - en.globes.co.il - on July 30, 2020

© Copyright of Globes Publisher Itonut (1983) Ltd. 2020

Nike Photo: Reuters
Nike Photo: Reuters
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