Blue and Red Companies: How CEO Activism

Is Reshaping Workforce Politics

 

An era of a new kind of CEO activism appears to be in full swing. Think of Nike CEO Mark Parker's decision to feature ads with Colin Kaepernick, the NFL quarterback turned racial justice activist. Or Dick's Sporting Goods CEO Ed Stack, who in February pulled assault-style weapons from store shelves and raised the minimum age to buy guns to 21.

Corporate leaders, who historically stayed silent on policy, are increasingly speaking out. Their statements are directed at consumers, but employees are also responding and it is affecting morale and company culture to recruitment.

Levi Strauss & Co. CEO Chip Bergh says he anticipated impassioned responses last month when he made a corporate donation of $1 million toward preventing gun violence.

"I knew I was going to get a lot of hate mail. I knew I was going to get threats. I knew my family was going to get threats, and all of that has happened," he says. "But somebody's got to have the courage to step up and say something needs to be done."

Some angry emails Bergh responded to came from his own employees, who interpreted the donation as hostile to gun ownership. (Bergh, an Army veteran, says it was not). He also received support, including from Levi's employees whose children had been in lockdowns at school because of active shooters.

Either way, he says it is not a move he regrets. He says activismfrom supporting desegregation to LGBT rightshas long been part of the California-based company's history.

"They may not always agree with every single position or stand that we're taking, but they appreciate the fact that we are willing to dive into these tough issues," Bergh says.

In today's hyperpartisan environment, Bergh says employees want to know where their leaders stand. And strong values are increasingly part of what workers look for in an employer.

"If you're in HR or finance or marketing, you can go work anywhere in San Francisco today," he says. "We have very intense loyalty to this company and a big part of the reason we've got that kind of loyalty is that this is part of our value proposition."

This new era of CEO activism started around 2014, when Apple CEO Tim Cook publicly supported gay rights, and Starbucks' then-CEO Howard Schultz wrote an open letter about race, says Aaron Chatterji, a professor of business and public policy at Duke University. It intensified with the election of Donald Trump.

"What's changed now is that we're more polarized as a society, and it's much more difficult to occupy that middle ground without being drawn into the fight," Chatterji says.

These fights often play out very publicly.

Social media amplifies the voices of people who are most passionate about their loyaltieswhether it's to a political party, a news source or a brand. And Chatterji says it's changed business norms by allowing workers to speak directly to their leaders. He says companies that recognize this play up their values to appeal to their core customers, just as political parties do for their base.

"A lot of people say, 'Look, it doesn't make sense from a capitalist point of view, or a market point of view, to get involved in politics,' and I think that's actually missing the point," he says, because corporate identities were already becoming more partisan.

"I think increasingly you're going to see red brands and blue brands," says Melissa Harris, CEO of marketing firm M. Harris & Co. in Chicago. As more activist CEOs speak out, she says companies are competing for attention. "They come to us asking for language that is more provocative, almost controversial; they want these messages to travel farther," she says.

Of course many CEOs prefer to avoid controversy by keeping with the old adage "never mix business and politics." But experts say staying silent comes with its own downsides, because a CEO's position influences employee recruitment and retention, especially among younger workers.

"It's going to have a recruiting impact," says Scott Dobroski, community expert for Glassdoor, a site where workers can leave comments about their workplace. His company's surveys show values are still secondary considerations, compared to salary, commute times, and work-life balance. But, he says, how CEOs define their company's values can have a direct impact on whether candidates apply for jobs. "You can also see quality candidates applying to those roles perhaps because of that," he says. "And then, if they get hired, perhaps even staying longer."

A July survey by public-relations firm Weber Shandwick found that 31 percent of employees said they felt more engaged and loyal to their companies when they agreed with their CEO's stances. It had the opposite effect for the 23 percent of those who disagreed with their leader.

Nor is it easy for CEOs to remain silent.

"Whereas it used to be leaders made these decisions, reviewed it with their board and came out with their position, I think what we're seeing now is employees are impacting leaders and impressing on them that this is an issue that is that important that they do speak out," says Leslie Gaines-Ross, chief reputation strategist at Weber Shandwick. "So I think it's a double-edged sword, and that's probably the hardest part of it, is that there is no playbook anymore for taking a stand."

 

 

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Vocabulary : 

1. re·shape /verb : shape or form (something) differently or again.

2. as·sault /verb : make a physical attack on.

3. hyperpartisan /Adjective : Extremely partisan; extremely biased in favor of a political party.

4. po·lar·ize /verb :  restrict the vibrations of (a transverse wave, especially light) wholly or partially to one direction.

5. de·seg·re·ga·tion /noun : the ending of a policy of racial segregation.

 

Questions : 

1. The first section of an article should answer the questions "Who?", "What?", "When?", and "Where?" Identify the four Ws of this article. (Note: The rest of the news article provides details on the why and/or how.)

2. Does this article have any bias? Why or why not?

3. Although the headline of the article mentions "blue and red companies," the only examples given are of "blue" companies making donations and taking a position. What should the reporter and editor have done to balance the article? Why do you think the "red" companies aren't represented?

4. Are "red" companies already identified with particular issues? What are some of the companies, and which causes do they support?

5. What do you think of companies that are politically active? Are you in favor of a CEO making political statements on behalf of a company? Why or why not? Is this an extension of freedom of expression?

6. The article mentions Levi Strauss's CEO Chip Bergh, who made a $1 million "corporate donation" toward preventing gun violence. Should CEOs use corporate funds or personal funds for donations like these? Why would Bergh use company money instead of personal funds? What message does using corporate money send?

7. If you worked for a company that supported causes you disagreed with, what would you do? Would a CEO's or company's political stance influence your employment decisions? Support your position.

8. As a consumer, are you aware of the political stances taken by companies? Does it influence your purchases?

9. How can a decision to support a specific political cause benefit a corporation? How can it be a detriment? Provide two examples of each.