Customers and employees say they want companies to take a stand on high-profile social and political issues. But that can come with a costly downside, says Dr Tony Jaques.
(Image: Jozef Mičic/123rf)
The latest example is home-sharing giant Airbnb, which decided to take a position on one of the most contentious political issues on the planet. The company removed 200 listings in disputed Israeli settlements on the West Bank and now faces a potentially damaging class action lawsuit in the USA, as well as an earlier action in Israel.
This news came just days after it was announced that American outdoor company Dick’s Sporting Goods suffered a drop in sales when it removed assault rifles from its stores following the Parkland school shooting in Florida (Dick’s had sold the Parkland shooter a gun, although not the one used in his deadly rampage). The company also stopped selling “virtually all" hunting items as a trial at ten stores.
Apart from the drop in sales - which was especially heavy at the ten test stores – the decision by Dick’s triggered the predictable social media response, ranging from, “Please shop at Dick’s, they are the good guys,” to, “A lot of us will never shop there again.”
This spectrum of opinion is pretty much inevitable when a company takes a stand, as it did when Nike shares fell sharply after its controversial advertisement featuring footballer Colin Kaepernick, blacklisted for kneeling during the national anthem to protest treatment of African Americans. However the company enjoyed an upward spike in sales, not to mention a reported $43 million worth of media exposure, and year-on-year share value has just risen by $6 billion.
The case of Dick’s Sporting Goods highlights that speaking up just as likely might not reap immediate financial rewards. Yet the numbers seem unambiguous. One recent US study found that more than 80 per cent of consumers believe corporations should take action on important issues. And 76 per cent said businesses should stand up for their political beliefs, whether or not they are controversial.
Similarly, a Cone Communications study revealed that 87 per cent of consumers said they would purchase a product because a company advocated for an issue they cared about, while more than 70 per cent would refuse to buy from a company supporting an issue contrary to their beliefs.
At the same time, a survey of employees at Fortune 1000 companies revealed 82 per cent said they wanted their CEO to rally support inside the company on sensitive social and environmental issues.
While American sentiment may not be fully replicated elsewhere, it’s worth remembering that more than 50 of Australia’s biggest brands took out full page advertising in support of marriage equality before the issue was put to a national poll. And earlier this year American Express suspended advertising on Australian Sky TV news in protest about an interview with a far right nationalist.
The bottom line is that any decision to lead or participate in a public issue must be truly aligned with core values, not a decision for the moment. Moreover, it needs to be supported by actions, not just words.
As a thoughtful essay in The Holmes Report recently concluded: “If you determine your brand is ready to immerse itself in an issue, then do so for the right reasons, make it relevant to your business and employees, and be consistent. If you can't be true to your idea of activism, it may be better to sit on the sidelines and keep preparing for when the time is right.”