Value@Stake Mission-critical insights

THEME: ISSUE MANAGEMENT / REPUTATION ♦ The line between company privacy and public advocacy is becoming increasingly blurred. Business leaders today are under increasing pressure to take a stance on the issues happening in their communities and act. For a company and its spokespeople, the decision to comment on a socio-political topic is not usually a simple one. That’s why FTI Consulting conducted a comprehensive audit, researching 35 separate case studies of corporate activism to discover best practices and see how leaders have been responding to this mounting pressure.

How It All Began

Many business leaders now recognize the opportunities that come with being an agent for change in their communities, whether it’s taking a more progressive stance on the LGBTQ movement or weighing in on a particularly tumultuous political climate. Outside of the U.S., however, speaking out can be more complicated.

In more conservative regions such as Asia or Latin America, business leaders may believe certain issues are too polarizing to support or even to discuss openly. With business and politics often intertwined, a key challenge for businesses all over the world is negotiating the boundary between risking public backlash and having a backbone.

Here are examples from different nations that demonstrate just how closely the public and private spheres are connected. They highlight how critical it is for businesses – and their leaders– to understand their customers and what issues they should or should not weigh in on.

Build Trust by Being Bold

The U.S. has the regrettable distinction of having more mass shootings than any other nation in the world. According to data from the Gun Violence Archive, a mass shooting (which involves four or more victims) occurs  nine out of every 10 days on average in this country.

After the school shooting in Parkland, Florida, in February, Dick’s Sporting Goods, a major sports retailer, became the first of several companies to make a statement on gun control. Soon after the attack, the company announced that it would no longer sell assault-style weapons or high capacity magazines, and that it would refrain from selling any gun to those under the age of 21. While the gun used in the attack had not come from Dick’s, the company expressed dismay that the Parkland shooter had legally obtained a separate weapon from one of its stores. In a press release, Chairman and CEO Edward Stack noted, “It was not the gun, nor the type of gun, he used in the shooting. But it could have been.”

Ultimately, 20 businesses cut ties with the National Rifle Association in the aftermath of the Parkland shooting. Though the Dick’s decision drew backlash from gun supporters, a Twitter analysis of nearly 343,000 users revealed that 79 percent showed a positive sentiment toward Dick’s on Twitter. It shows that taking a humanistic stance, even if it might affect the bottom line, is important in today’s business climate.

Do Your Homework

Sometimes, powerful lessons come from unintended controversy. Cosmetics brand Lancôme learned that in 2016, after it invited Hong Kong singer Denise Ho – a Hong Kong and Tibet independence advocate who had routinely scrutinized mainland China on social media – to perform at a promotional concert.

Upon learning that Ho would be participating in a Lancôme-sponsored event, local mainland Chinese press and bloggers scrutinized Lancôme for what they said was a culturally tone-deaf decision. That led to a wave of criticism from Chinese netizens, who called for a boycott of the brand. Lancôme posted an official announcement on the Chinese site Weibo and other social media platforms, stating that “Denise Ho is not a spokesperson of Lancôme.”

But those statements created a backlash on Facebook, with more than 44,000 negative reactions over the brand’s timidity. Singer/songwriter Ivana Wong posted “Lancôme Bye Bye” on her Facebook page, which inspired the hashtag #Lancomebyebye and many threatened to boycott Lancôme products. The Lancôme situation highlights just how important it is for brands to fully research the hot-button issues that matter to local consumers.

Believe in the Issues

Increasingly, Millennials are looking to understand and share the values of the companies from which they buy and for whom they work. To increase this loyalty and trust, CEOs have to consider how to humanize their companies by engaging on issues they feel strongly about. This has been occurring in the U.S. for some time but other, more conservative, countries are increasingly pushing boundaries.

Bancolombia’s marketing campaign, “This is everyone’s moment” (Es el Momento de Todos) launched last year and split opinion in the country. The first ad of the campaign pictured two men hugging and read: “Es el momenta de las nuevas familias” (It’s time for new families), which generated furious reactions from several conservative and religious groups, illustrated by the high volume of social media posts. Religious groups threatened to withdraw their accounts from the bank, arguing that this was not the image of a “real” family in Colombian society. However, most posts congratulated Bancolombia for its initiative and said that they were proud the bank was in charge of their finances. Although Bancolombia ultimately pulled the ad, it showed there was an appetite for this type of corporate support in the country. Weighing up the political and social climate as well as the issues the customer base cares about to determine the appropriate approach, is worthwhile preparation.

The Time Is Now

There is no one-size-fits-all approach, or single way of communicating effectively on social and political issues. Similarly, no two countries are identical in their policies, so multinationals must pay close attention to the environments in which they operate and know how to adapt accordingly. When businesses can demonstrate sensitivities to local issues and an understanding of how to navigate them, they can inspire loyalty and confidence from customers and employees, and avoid angering politicians or impacting their bottom line.

 

This article was published by our international partner FTI Consulting Strategic Communications. Click here to view the online version of the article: http://www.ftijournal.com/article/corporate-activism-when-business-gets-political1?utm_source=email&utm_medium=email&utm_campaign=WeeklyThought2018

For more information about the article in the Dutch market, you can contact Edwin van Wijk (evanwijk@valueatstake.nl) or Michael Renssen (mrenssen@valueatstake.nl).

About the Authors:

Camilla White
Camilla.White@fticonsulting.com
Senior Director, New York

Jaime Vasquez
Jaime.Vasquez@fticonsulting.com
Director, Colombia

Juliet Ye
Juliet.Ye@fticonsulting.com
Senior Director, Shanghai

Victoria Foster Mitchell
Victoria.FosterMitchell@fticonsulting.com
Senior Director, London

Patric Garvin
patric.garvin@fticonsulting.com
Director, Frankfurt

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