When to Speak Out…
I think everyone was surprised during the 2020 George Floyd crisis that companies were issuing statements and promising to change their way of doing business. To my mind, we had not seen this kind of response to this kind of crisis before. Yes, companies had commented on natural disasters—sending our thoughts and prayers to the people of New Orleans—but not on an issue fraught with as much emotional leverage as police brutality and/or race relations.
What gives? First, the climate was different. You didn’t have riots over Tyre Nichols. Employees were not demanding their company speak out. For whatever reason, there was sadness but not outrage.
Second, though, in the 18 months or so since the Floyd crisis, companies have been speaking out more on contentious social issues, and research shows that the public expects them to. What has often happened, though, is that the company often pays a price by weighing into debates. You can create a situation where you anger half of the public, or all of the public. In our polarized society, you can see why CEOs are sticking to business.
Here's a nice flow chart from Axios that shows how a decision like this could be made.
For me, this is an excellent start. By the way, I love the internal statement/website post as a tactic that puts the company on record but says out of the social media abattoir.
Stakeholder Communications Remains Important
The only thing I would say is that the middle box, the one that says, “business operations or shareholders, “I would amend that to say, “business operations, stakeholders or shareholders.” When COVID live-stress-tested our systems, we learned that our vendors and other stakeholders were vital to us…as much as employees, especially in the outsourced world we live in. (I’m looking at you, supply chain). My Resilient5 program outlines this…we need to build trust and understanding throughout our ecosystem to be resilient.
The Harvard Business Review has a slightly different model.
The Question of Meaningful Influence
HBR introduces the idea of impact, which I think is interesting. It’s a little bit of a black box. Did any one company’s statement influence the course of race relations (or police brutality) in the country? No. Did all of them contribute to the idea of a broad consensus and meaningfully impact the debate? I think you could argue they did.
I think, though, an honest appraisal will usually leave you in the middle box with “2 yeses.” HBR recommends being a follower here. I love the idea of something like, “we’re troubled by the ongoing lack of progress in race relations in this country. That’s why we have partnered with XX and XX as we work to make our organization more diverse, inclusive and equitable. We track our progress on our DEI Dashboard so that we can be completely transparent with all our stakeholders.”
Make Sure You Have Credibility
This is a sticky one. But the Glass Houses rule applies. If you don’t have a compelling, action-based story to tell within your own house on a specific issue, then you are just risking blowback. You don’t have to be perfect or have a finished effort, but you need to be able to point to actions—not a values statement—that proves you have earned the right to speak out on the issue.
Actions>words.
Fire Your Stakeholders?
One last thing from Harvard. I thought it was interesting that if you have an issue that is consistent with your values and you can meaningfully influence it, but your stakeholders will not agree to your speaking out, you should “fire your stakeholders.” That’s a little bit of a wow. I can see it, but I think you have a chance to engage before it gets to that level.
Generational Differences
Last thing, but important. PRSA has an article about generational differences driving this issue. If you are older and want to know why you can’t just sell your widgets, it’s because it will make it more difficult to recruit and retain younger employees, who see the world differently. (Research from FTI Strategy in the PRSA Article shows that 38% of people surveyed would not work for someone they disagreed with.) You don’t have to like it, but capitalism is about adjusting.
Conclusion:
Ultimately, there’s one thing that is missing in all of this: brand. Things you say can shine or tarnish your brand. You need to have an idea of what that brand means—and you’ve probably done an endless amount of exercises on this—and if you have effectively defined it, no one should be surprised when you speak out. Done effectively, you can strengthen and build trust for your brand.