Companies Can't Sit on Fence Regarding Divisive Social Issues
Chief executives and other C-suite leaders are under increasing pressure to take strong public stands on the big, divisive social issues of the day, such as #MeToo, guns, privacy, bullying, politics, racism, religion, immigration, LGBTQ, global warming, domestic violence, and on down the list.
With consumers rewarding companies that take stands--and sometimes punishing those that equivocate or stay silent--it puts business leaders in a bind.
They must decide whether to respond and, if so, how to respond. That means choosing the right tone and message so as not to garner criticism for appearing insincere or tone-deaf, or not to alienate those who disagree.
Get it wrong, and there is a price to pay, as recent events attest.
The University of Maryland Board of Regents on Tuesday chose to keep the school's football coach after the heat-related death of a player and the disclosure of culture and oversight problems in the program. That decision prompted some players to walk out of a meeting with the coach upon his return, while others took to Twitter to voice their displeasure. With the school getting hammered in the court of public opinion and protests scheduled, the board reversed itself Wednesday and dismissed the coach.
And in the past two weeks, Megyn Kelly lost her job at NBC after comments she made about blackface, then a Campbell's Soup executive left the company for endorsing on Twitter a fake conspiracy theory regarding the caravan of people traveling from Central America toward the U.S. border.
The vacuum in moral leadership extends well beyond these recent incidents.
LRN founder and Chief Executive Dov Seidman wrote for the World Economic Forum that just 17% of employees surveyed in LRN's new "State of Moral Leadership" report said their leaders almost always tell the truth; 13% of employees say their leaders usually take a stand on moral topics. Only 17% said their leaders put principles first, 14% said leaders acknowledge their own failings and 13% said leaders make amends when they get things wrong.
Why are these numbers so small? How can organizations flourish if employees don't believe their leaders? It makes little sense, especially since there's an economic argument to be made for moral leadership.
Seidman said what makes leaders occupying formal positions in business, politics, education or sport truly successful in their roles is when they go beyond and realize their moral authority. "Formal authority can be won or seized, but moral authority has to be earned and sustained every day by how you act and how you lead," he wrote.
The LRN report found managers who lead with humility are 22 times more likely to be trusted by their colleagues. "When managers are able to make themselves small and create an atmosphere in which others can stand up and deliver a great performance, they are 11 times more likely to achieve their business goals," Seidman wrote.
How a CEO and leadership team address these issues in their own workplace can serve as an opportunity to re-emphasize the principled values and behaviors that are embedded in their code of conduct. Or it can expose issues in the culture that need to be confronted.
Despite the perils that come with speaking out, it's imperative for leaders to step forward and take stands, said Alison Taylor, managing director at BSR, a nonprofit organization that advocates for sustainable business strategies and best practices.
The environment is so polarized that lack of action and comment can be risky in itself, she said, using as an example Uber Inc.’s decision to cut surge pricing during the ‘Muslim ban’ taxi drivers’ strike in New York in 2017.
"This was a purely commercial decision designed to maximize revenue, but was widely perceived as a political act," said Taylor, who wrote about the pressure to respond this week in Harvard Business Review. "The neutral middle ground is no longer a safe area, and risk management therefore frequently requires a proactive response on relevant issues."
There is evidence younger employees expect and want companies to take a stand, she said, and this is changing the equation for how businesses should get involved in societal and political issues. The question is "raising profound questions that we are not yet ready to answer," she said.
Companies that don't engage forcefully may find their "reputations will be taken out of their hands, and formed by the perceptions of the public, customers, investors and other stakeholders," said Taylor.
"If you don’t get ahead of the issues, think about how and where to engage, you risk losing control of the narrative about what your company is doing, and will burn time and money responding to real-time critiques."