4 Rules Every Activist CEO Should Follow

June 25, 2018, 3:09 PM UTC
GLAAD Gala San Francisco 2016
SAN FRANCISCO, CA - SEPTEMBER 08: Marc Benioff, CEO of Salesforce, speaks at the GLAAD Gala at Metreon on September 8, 2016 in San Francisco, California. (Photo by Kimberly White/Getty Images for GLAAD)
Kimberly White Getty Images for GLAAD

#BlackLivesMatter. #LoveWins. #MeToo.

Chances are you’ve either written one of these hashtags or they’ve shown up on your social feed at some point in the last year.

While social activism has been around for generations (moving its platform from the streets in earlier days to social media in recent years), there is now a new player at the table that until recently, had never had a voice: the socially active CEO.

In the last few years, CEOs of major Fortune 500 companies have broken the secret cardinal rule that corporations and their leaders should remain neutral on social issues, so as to not alienate a large segment of potential customers who may disagree. Business leaders felt they could (and in fact should) stay quiet. They were afraid speaking up could cost them customers, sales, and their reputation.

But in an era of political polarization, in which we are increasingly cloistered in neighborhoods, social networks, and workplaces that serve as echo chambers for our ideological beliefs, corporate neutrality may be outdated. Today, as brands seek to “personalize” their relationships with consumers, is adopting a political orientation part of closing the deal?

The CEO as “influencer”

There is a long history of corporations wielding influence on public policy through lobbying, but CEO activism is newer and less understood. Because there has been little, if any, research on it, Harvard recently conducted an experiment about its impact. The findings suggest that CEO activism can sway public opinion—and actually also increase interest in buying the company’s products. Nearly two-thirds of respondents say they want CEOs to take the lead on policy change instead of waiting for government.

Other surveys have shown that more people want to work at companies with activist CEOs, and consumers are willing to buy more in support of activist companies. And CEOs who are not only more active on social media, but also engage more on personal topics tend to be more successful, according to a recent report by Ruder Finn.

Activism: part of the job requirement?

Three business school professors began studying CEO activism three years ago, and noted in a recent Harvard Business Review article, “We believe that the more CEOs speak up on social and political issues, the more they will be expected to do so. And increasingly, CEO activism has strategic implications: In the Twitter age, silence is more conspicuous—and more consequential.”

Marc Benioff, CEO of Salesforce, was one of the earlier pioneers of CEOs who speak out, and was called an “activist CEO” by The Wall Street Journal in 2016 when he fought for gay rights and encouraged others to do the same. Benioff has spent the last few years making public calls to action for CEOs to embrace accountability and activism in the Fourth Industrial Revolution, and recently tweeted, “CEO activism is not a leadership choice, but a modern — and an evolving — expectation. CEOs have to realize that Millennials are coming into the organization and expecting the CEO to [publicly] represent the values of that organization.”

Beyond “corporate social responsibility”

But more recently, the rise in CEO activism goes beyond CSR. In the wake of the school shootings in Parkland, Fla., companies like Delta (DAL), Hertz (HTZ), and Symantec (SYMC) distanced themselves from the National Rifle Association by eliminating benefits to their members. Ken Frazier, Merck (MRK) chairman and CEO, drew a firm line in protest when he resigned from President Trump’s American Manufacturing Council in objection to the president’s response to the violence in Charlottesville, Va. An avalanche of fellow council CEO resignations followed, and the council eventually came tumbling down.

Corporate “activism” is no longer relegated to the back-office CSR or ethics department. It now takes center stage with the head of the company.


Effectively becoming an “activist CEO”

While activist CEOs are still relatively new pioneers, when it comes to best practices, the same rules of effective communications apply. To be a successful activist CEO, CEOs need to follow these four simple rules:

  • Develop an authentic voice and quick actions: Don’t try to step into the unchartered world of activism with your corporate messages in hand. The most genuine and trusted activist CEOs are the ones who pushed the key messages aside and spoke from the heart, and often weren’t afraid to do it on a forum like Facebook (FB) Live, making themselves both vulnerable and very relatable. Words need to be followed by actions so they don’t ring hollow. Starbucks (SBUX) CEO Kevin Johnson took action after the incident in Philadelphia, announcing mandatory racial bias training for employees.
  • Connect your customers with your activism efforts: If there is anything we’ve learned about marketing and communications in the last five years, it is that the customer is truly at the center of every brand. With social media, customers now have the ability to provide real-time feedback, opinions, and even help shape brand ideas and campaigns. Customers want to “experience” the brand as much as they want to use and consume it, and want to be engaged and feel they can rally behind that company or even shape future activism efforts.
  • Align activism efforts with a company’s mission: While CEO activism can get public attention in any form, CEOs should avoid just speaking out about the latest news-making issue just to get some press time. To be effective, the entire company should feel the power of and identify with a CEO’s activism. The leadership team needs to align and rally behind the CEO. It is a given that not all associates will agree with a controversial position, but employees should feel the same sense of pride and ownership that the CEO is taking a value-based public stand.
  • Be willing to act against your own self-interest: A controversial stand may alienate some, but it is often the right thing to do, and shows the company takes action around what it believes For example, adjusting pay disparities will cost the company money in the shorter term, but will improve talent retention and attraction, and inspire confidence and trust. Over the long term, the investment in standing up for what’s right will pay off.

The bottom line is, the way CEOs communicate has drastically changed in recent years. With an increasing number of CEOs using social media to post ideas and opinions, it is only natural that a next step is for CEOs to start using it to advocate for social changes. Today, anyone can be an advocate, and CEOs and business leaders are finding that their choices can do more than change stock prices—they have the power to change society too.

Kathy Bloomgarden is the CEO of Ruder Finn.

Read More

Great ResignationClimate ChangeLeadershipInflationUkraine Invasion