Aaron K. Chatterji is an associate professor at Duke University’s The Fuqua School of Business.
The week after Independence Day 2016 will remembered as a time when the conversation about race in America stormed into the foreground once again, with fatal police shootings of African-American men in Louisiana and Minnesota and the murder of five police and transit officers in Dallas by an African-American Army veteran. The ensuing protests and heated discourse on cable news and op-ed pages, all during a particularly contentious Presidential campaign, reminded us of the vexing divisions that still fester all across our nation.
While we expect to hear from our political leaders during these challenging times, we have not traditionally expected much from our corporate leaders, particularly on controversial social issues like race relations. But that seems to be changing. CEOs have become activists, as my co-author Michael Toffel and I have described here and here, weighing in on issues not directly related to their bottom line, on same-sex marriage, gender equality, transgender rights, and guns. The preliminary findings from our research are that this kind of activism can increase willingness to buy a company’s products among consumers sympathetic to the cause.
Even in light of the recent spate of CEO activism however, the statements of business leaders in the aftermath of the shootings in Louisiana and Minnesota was still notable. Several leading technology companies and executives, including Apple’s Tim Cook, Dropbox’s Drew Houston, and Facebook’s Mark Zuckerberg (the video of the Minnesota shooting was broadcast using his Facebook Live product) quickly tweeted out statements expressing solidarity with those angered by the police shootings. Some companies, including Twitter, Pandora, and Square, used the hashtag #BlackLivesMatter.
This activism immediately produced significant backlash and calls for boycotts, particularly in light of the Dallas shootings, as critics accused the companies of taking sides (the wrong one in their view) on a hot button issue. Given some recent examples of CEO activism on race issues, (Starbucks’ Howard Schultz’s Race Together campaign and Sam’s Club CEO Rosalind Brewer calls for greater workplace diversity come to mind), this response should not have been surprising.
These cases suggest that wading into race and other social issues can be tricky and almost always generate at least some backlash from consumers. So why do I think companies are doing it and why do I expect to see even more in the future?
First, business-to-consumer companies in particular are trying to personalize their brands to build stronger connections with us. But we are crafting our social connections differently nowadays. For example, opinion research shows that large percentages of Americans are mostly friends with people who share their political beliefs. Moreover, recent data indicates that “negative partisanship”, or bad feelings about those with different political views, has increased dramatically. In this kind of polarized environment, differences over nearly anything are more likely to be viewed through a political lens. Our political identities have become a much more important component of who we are. So as we increasingly sort into tribal networks of like-minded individuals, it is becoming more difficult for our favorites brands to gain our trust while staying out of politics.
Second, there is genuine conviction among many corporate leaders about these social issues, in some part shaped by a new wave of business education that has emphasized the social responsibility of business and thinking beyond simply maximizing shareholder value. Moreover, a new younger generation of corporate leaders is emerging that are not only demographically predisposed to social liberalism, but are typically clustered in progressive urban areas around San Francisco, Boston and New York. Predictably, much of the CEO activism has come from the left side of the political spectrum, on cultural and social issues, as opposed to economic issues where the sensibilities and priorities of business leaders can line up differently.
Finally, the advent of social media has transformed the landscape of activism for all of us. I like to say that social media is like a microphone that is always on. So silence is ever more conspicuous. When these events happen, we immediately check our social media accounts to see how other people are reacting, perhaps for new insights, but more likely to see who agrees with us and who does not. When battle lines form, silence can be viewed as implicit support for whatever position we don’t agree with, creating a nasty communications problem for normally cautious corporates.
Taken together, a hyper-partisan and hyper-plugged in America portends more CEO activism and more backlash. The most astute CEO activists will speak authentically on selected issues that matter to them personally, and make a measurable impact on their audience. The very best corporate communications teams will red flag tweets that could go viral for the wrong reasons and avoid a hullabaloo you would have definitely read about. And many of us will be keeping track, as we dedicate our hearts, minds and wallets to the companies and causes we support.
