Media

When Companies Should (and Shouldn't) Enter the Political Fray

Sometimes it’s a great idea. Sometimes ... not so much. Here are two questions to ask.

Damned if you do, damned if you don’t.

Photographer: Tim Boyle/Getty Images

Even before Donald Trump took office, the calls for boycotts began. “@Amazon we are not shopping with you until u pull all Trump merchandise,” one woman wrote on Twitter in November. Another tweeted: “I’ll NEVER buy @LLBean for my daughter EVER AGAIN. I won’t support any1 that Trump does. Change UR ethics.”

These weren’t isolated incidents. For months, a campaign called Grab Your Wallet has been urging consumers to boycott dozens of companies -- including Macy’s, L.L. Bean, Bloomingdale’s, Zappos and Amazon -- for their links to Trump and his businesses. Their offenses, such as selling Trump-branded products or having a board member who raised money for Trump, are neatly listed on the group’s website, alongside four forms of contact information for each business.

Plenty of other companies have gotten caught in anti-Trump campaigners’ cross-hairs. Last month, a trending hashtag on Twitter called on consumers to #DeleteUber after the ride-sharing company was accused of trying to profit during an anti-Trump taxi strike in New York City. More than 200,000 users deleted their accounts in protest.

But alienating the president’s supporters can be just as dangerous as angering his opponents. Earlier this year, Trump foes boycotted Nordstrom for carrying Ivanka Trump’s products; later, when the department store stopped selling the line, Trump fans launched a boycott of their own. (The company blamed declining sales for the decision.) #BoycottStarbucks became the top trending topic on Twitter after its chief executive announced the company would hire 10,000 refugees -- an implicit rebuke to the president and his travel ban.         

All of this has companies wondering whether to take stances on political issues. Are the reputational rewards worth the potential backlash? I advise businesses to ask two questions to figure this out the answer.

First: Is the issue directly related to the company’s core business -- or to what Helio Fred Garcia, president of the Logos Consulting Group, calls the company’s “lived and declared values”?

A study by the global communication firm Weber Shandwick and KRC Research found that more people view political statements by chief executives favorably when they’re about issues that directly relate to their work. But when companies speak out on policies that aren’t clearly relevant to their businesses, more view them unfavorably.  

“Our research shows that consumers do not immediately understand why a CEO would be speaking up on an issue that isn’t directly relevant to what their core business is all about,” said Leslie Gaines-Ross, Weber Shandwick’s chief reputation strategist. “At first glance, people think that CEOs are just trying to get media attention or sell products. The tie to the business has to be upfront, clear and values-driven for the average person to discern why a company would weigh in on such a hot-button issue.”

So, for example, it has made sense for technology companies to speak out against the president’s immigration ban, because such businesses rely on international talent. Garcia said that weighing in on such issues is unlikely to cause companies meaningful long-term reputational harm, because “if those are already your lived values, then the people who oppose those values are already not on your side.”

The second question businesses should ask is whether the people who matter most to them -- including employees, customers, investors and board members -- are affected by an issue or feel strongly about it and expect the company to speak out.

Employees have become more activist and begun demanding that their leaders get involved in political issues over the past couple of years, Gaines-Ross noted. “You want to retain your employees and recruit the best of the best, and if employees disagree with you, they can quickly go on social media and publicly speak their minds,” she said.

One Oracle employee, for example, posted a public resignation letter after the company’s chief executive joined Trump’s transition team. And after IBM’s chief executive congratulated Trump for winning the election, an engineer started a petition on behalf of past and present employees calling for her to “affirm IBMers’ core values of diversity, inclusiveness, and ethical business conduct.” So far, it has garnered more than 2,000 signatures.

Garcia said that if the answer to both questions -- whether an issue affects a company’s core identity and whether important stakeholders are affected or feel strongly about it -- is no, then companies should usually stay silent.

Regardless of the decisions they make, companies need to be prepared for backlash from people who disagree with them. But Garcia said they shouldn’t automatically react to it. The question to ask, he advised, is: “Is this backlash causing those who matter to me to change their view of me?” Usually, the answer is no. “Unless someone like a politician jumps on it and amplifies it for their own advantage, it will probably go away within a news cycle,” Garcia said.

Garcia said that, too often, companies respond prematurely to criticism, making the situation more high-profile than it otherwise would have been. “Don’t go to DEFCON 1 just because your son-in-law saw a negative tweet,” he warned. “It may be that the three most influential people to you personally have seen the tweet, but that doesn’t mean you have to go out and respond.”

In those cases, the best thing to do is stay silent and monitor the situation. “Often an issue doesn’t gain traction unless you provide it,” he said. “Most harm to corporate reputation and trust and confidence in a crisis is self-inflicted.”

This column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.

    To contact the author of this story:
    Kara Alaimo at kara.s.alaimo@hofstra.edu

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