Should businesses get political - and if so, when?
28 March 2018
Imagine you’re driving home in your car. You’re relaxed, making good time. Your only objective is to get home safely and in a good frame of mind so you can enjoy whatever it is you have planned for the evening. But then something happens.
You notice another car, driving right up your backside, swerving impatiently as if to get past you, looking indignant that anyone should be going slower than they are. So what do you do? Well, you’re not going to let this jerk beat you. When he looks like he’s about to overtake, you drive faster to prevent him until the road blocks him again. When he can’t overtake, you slow right down just to annoy him. Now your pulse is racing, and you’re in the heat of battle.
Maybe you win your little mini-battle of the roads. Maybe you don’t. Either way, you actually lost because now you arrive at your destination hot and bothered, on edge and angry. In other words, the distraction on the road completely took you away from your initial objective - to arrive home safely and in a good frame of mind. Not only are you not in a good frame of mind, but the tussle certainly put you in more danger than if you’d avoided the problem.
I mention this example because it’s an everyday experience. I’ve seen lots of my friends (and myself in my younger days) suddenly become a competitive animal behind the wheel when they think someone is in danger of “getting away with something”.
Note that this is different to the scenario where someone is driving on the wrong side of the road and you see their car on direct collision course with yours, forcing you to take urgent avoiding action. The first scenario is one where something compelling but unrelated tempted you into acting against your intended outcome. The other directly threatened your ability to achieve the outcome at all. And that is a key distinction.
For me, it’s an apt analogy for the question about businesses and politics. Let’s suppose we have a values-driven business, or at least a business led by leaders with values. Their objective is to build long-term value through the business, and to do so in a way that makes society better off and more sustainable. Our kind of people.
When something appears suddenly in the headlines that those leaders feel to be an affront to their values, it’s very easy to take the short-term bait. To make a stand. The question is whether by so doing they lose sight of the ultimate objective and suffer negative consequences as a result.
This has become an issue because, of course, we live in very polarised times. The numbers of CEOs that have ended up pitching in over one issue or another has become large enough that recently the Harvard Business Review ran a piece on the rise of ‘CEO activists’.
The highest profile examples have included: Edward Stack, the CEO of Dick’s Sporting Goods announcing the company was no longer going to sell firearms to people younger than 21. Delta CEO Ed Bastian announcing an end to discounts for NRA members. Marc Benioff of Salesforce has been public on a number of issues, including on LGBTQ rights. In fact, Benioff not only has form in taking stands himself, but also in encouraging his peers that they should do the same. A little longer ago, we saw a number of CEOs taking leave of a place on the US President’s business advisory council including Elon Musk of Tesla and Robert Iger of Disney (both over the US withdrawal from the Paris Agreement on Climate Change).
Each of the stands taken have had some positive and some negative consequences. The question is whether they’ve actually enabled their ability to deliver in the longer term.
Let’s start with the principle, and then we’ll look at individual cases. If you want your business to be one of the agents for a more sustainable world, the question is really how you define the best chance of achieving that. Sustainability has to be an underpinning consensus for society, or else it isn’t sustainable. Having one political ideology embrace it as a goal and ‘own it’, thereby encouraging the other side to steer the opposite course, only achieves sustainability if that political party gets elected 100% of the time (and the rather well documented negative consequences of one-party rule can be avoided). Since there’s no example in history of that working out as a process for the long term, that’s unlikely to happen.
In that case, the alternative has to be about rebuilding the fragile consensus that used to exist across the political divides. If you’re a business, you’re well placed to play a part in this. You’re respected on both sides. Your direct experience of the impacts of climate change in your supply chain are fact and data based, and can inform thinking in a neutral way. You are able to take action in practice within your own business, and thereby prove that certain problems can be solved that may clear the way for legislation to turn new methods into new minimum standards.
Arguably, you lose much of that if you take a stand that demonstrably pitches your tent in one place or another. Nobody on the conservative wing is going to listen to Starbucks, for instance, because Howard Schultz has too explicitly endorsed Democratic candidates. It doesn’t mean the company can’t play a part and be influential, but it has given up one of the most powerful assets it had.
Of course, there is a line - the car that is heading straight for you. However, most political activists live their entire lives believing that line has now been crossed, and any decent human being must make a stand in agreeing with them or else they’re morally bankrupt. It’s what happens when you spend your life focusing on the extremes, and surrounded only by people that think the same. Their lack of perspective makes them unreliable guides. Their lack of understanding and empathy for how the world looks to people on the other side of the divide is precisely why they would reject even the suggestion that the task is to build consensus, because they believe the other side are inherently corrupt and malevolent. Or misguided, or stupid. Or anything other than other perfectly ordinary human beings that have a different perspective.
Generally, I believe it’s most in the interest of companies creating long-term value for businesses to lead by example - creating products and services that suit the world we want to create. It can work for individual leaders to take a public position in arguing for the positive values that drive them - but they can do this without being explicitly political in how they do it.
Sometimes, it genuinely is not so easy.
With Dick’s Sporting Goods, for instance, their own product was at the heart of a fierce national debate sparked by high profile and desperately awful tragedies. There was nowhere to hide on this issue, and it was interesting that within a very short period of the company announcing its move, even risk-averse Wal-Mart followed suit. Although the issue of guns tends to follow party lines in the US, it was still an area where a company could take a stand over its own policy of how and when it sold its own product.
However, recent comments by Benioff that “there is a third [political party] emerging in this country, which is the party of CEOs” showed precisely the danger of becoming seduced into activism as self-indulgence. Such statements create the circumstances whereby business engagement in the issues of society, rather than being an example of enlightened self-interest becomes one of partisanship and something to be opposed.
Elon Musk, on the other hand, is an example of a supreme pragmatist in this space. Undoubtedly, he is 99% focused on using his business to create a more sustainable world, and he will negotiate with any government, any agency, in order to make this future a reality. And when he, along with others amongst his peers, first agreed to sit on the Trump business council, it was precisely because there was a moment of political change in progress, and it was a moment when the influence of quiet voices might be able to make a difference. Of course, he had to do this against a backdrop of condemnation from the activists, whose position was that any engagement with ‘the enemy’ was some sort of betrayal of principle.
When he ultimately resigned, it was in the face of an action that provoked world-wide condemnation (pulling out of the Paris agreement), so it was really a recognition that the attempt to influence had failed. Nevertheless, when he went he focused on the issue with no gratuitous political or personal pitches. It was deftly enough handled that when the SpaceX Heavy rocket launched, Trump was able to tweet his congratulations and praise for American innovation. It showed that Musk hadn’t lost all influence by making a move consistent with his principles because of how he’d executed that move.
The real point behind all of this could easily get lost, however, in the debate around the high-profile outliers. The value of responsible business is being the pragmatic, strategic approach to solving issues, building alliances wherever they are needed, and doing so in the way most likely to deliver success. From the outside, this can be hard to spot, and easily mistaken for business-as-usual where significant businesses ignore the long-term and behave purely tactically based on the next quarter’s results.
So leadership is important. The key thing is not to confuse leadership with the purely recreational activity of gesture politics.
Oh - and what should our metaphorical driver have done, with an edgy, bad-tempered dude driving up his backside on the highway? In that situation, it’s best to slow down just enough to put a larger-than-usual space between you and the car in front. That’s because the guy behind you, for whatever reason, has given himself less reaction time should you break suddenly. So putting more space in front of you gives you the chance to react smoothly to any problems up ahead and make a collision less likely. Also, it means that as soon as he gets a chance, he can more safely overtake. That is the approach you take if your objective is to get home safely and in a good frame of mind. Anything else is allowing the ego to distract from the mission.