As our world continues to become more divided on major issues, should CEOs take a public stance on contentious subjects? Does doing so boost a leader’s credibility and their profitability, or does it hinder it? Business Leader investigates.
Is 2019 the time to take a stand?
An ever-increasing number of global brands are taking a more active stand on environmental and socio-political issues.
Firms like Ben & Jerry’s, Starbucks, CrossFit, Nike and Lush, have all recently used marketing campaigns and adverts as platforms to start a public debate around the importance of sustainability in consumption, racism, gun control, working conditions and the importance of LGBT rights and diversity, among others.
Not surprisingly, this activist orientation that many firms have embraced is often broadcasted through their CEOs, with a number becoming more vocal and more willing to step forward and discuss political and social values that go beyond their company’s core business.
Jackie Fast, star of The Apprentice, comments: “It is now time for businesses not only to stand for something, but to communicate their values to the world. Not only is this more sought after by younger generations from a purchasing perspective, but it’s also important as a differentiator in the market. A business with a clear mission and vision can become a brand – without it, you are just flogging a product or service.
“As part of this shifting communication between brands and consumers, it’s not only important for CEOs to fly the flag, but to lead the entire company towards their vision and having a viewpoint on leading public issues is a sign of strength.”
It is this shift in mentality that has seen many CEOs and leaders go from keeping their opinions in private to speaking out on public issues.
Dr Achilleas Boukis, Lecturer in Marketing, University of Sussex Business School, comments: “While further study is needed into the longer-term implications for activist CEOs, this is a phenomenon that is not going away and many will feel that CEOs have a duty to take a stance and have a say on some of the most fundamentally important political and social issues.
“To make the most of these opportunities and grow their company’s public standing and customer base, CEOs need to be seen to be taking a stand on important social injustices and to choose causes that are most relevant to their firm and its corporate history champion. Getting this right can be worth its weight in gold.”
This evolution of leadership has been a recent addition to the role of a leader of a business, and one that has implications outside of their own company.
Professor Michael Beverland, Head of Strategy and Marketing at the University of Sussex Business School, said: “Taking some form of leadership position has always been essential for brand authenticity and endurance. With the emergence of brand purpose, leaders taking a firm stance on key issues are a critical means to enhance the brand’s authenticity among customers, employees, and the wider public.”
It is therefore an extra responsibility for a modern CEO, and something a business leader in 2019 needs to embrace.
Dr Liz O’Driscoll, MD at Exeter City Futures comments: “Many of the challenges facing our society today are beyond the power of government alone to solve. Businesses therefore have a critical role to play and have a powerful voice in discussions around carbon neutrality, sustainability, smart cities, and many major issues.
“CEOs can choose to directly engage in these conversations – but sometimes their decisions speak louder than works. Collectively, businesses have the power to make decisions that can change our entire system: choices about supply chains, resource management, and engagement with our local communities, which can all make big, important statements that can ultimately influence public policy.”
Impact of millennials
Another major influence on how leaders behave has been the changing demands of millennials, who will make up more than 45% of the workforce by the end of next year – overtaking the number of Gen X in employment (those born between 1965-80).
It is their influence that is set to revolutionise the workforce and how a company and its leaders portray themselves to the public.
Fast comments: “The influence that millennials have is completely different to that of previous generations, due to this demographic having grown up in the ‘Information Age’. With so much information available to them to inform their purchases and the direction with which they choose their careers, they are now able to make more conscientious decisions – and are choosing to do so. Brands need to have a strong and clear voice in the market if they are going to attract these savvy customers and this new workforce.
“Millennials demand authenticity in brand messages and quickly disregard obvious whitewashing. With only 4% trusting the advertisements they see, it’s now critical for brands to utilise other communication channels to show that they stand for something – and one channel of ease is the CEO, who is typically followed on social media more than the brand they lead.”
Role of social media
Mirroring the emergence of millennials in the workplace, is the influence social media now has on our everyday lives. Leaders can be eulogised and criticised instantly on social media – which provides a platform where views can be amplified.
Journalist and broadcaster Neil Sean comments: “Businesspeople are always told that they need to personalise their brand or company. I disagree! What people want is direction, clarity and more positive information. CEOs are not movie stars or actors; they are running a company and how you portray yourself across the world of social media is vital to success.”
In regards to whether or not leaders should be worried about having a presence on social media, Emeric Enoult, CEO of social media management software, Agorapulse comments: “Social media solves more problems than it causes for CEOs. It is a bridge for both online and offline conversations with the people that CEOs and business leaders most want to reach.
“At its core, social media itself is just a tool, but it needs to be wielded intelligently and purposefully. By listening, monitoring, and engaging in online conversations with target audiences, CEOs and business leaders can better understand them and ultimately strive to create better business products or experiences that make life better for customers.”
However, it took only a tweet from Houston Rockets’ GM Daryl Morey in support of protesters in Hong Kong (“Fight for Freedom, Stand with Hong Kong”) to create a major diplomatic incident with China which threatens to derail years of work by the NBA to open up a $4bn (£3.1bn) market.
With so much at stake from just 280 characters, many boards might well ask if it’s worth the risk of having an outspoken CEO who wants to engage with controversial public issues.
Even more destructively, some CEOs unreasonably jump into controversial debates or share regressive and unpalatable views that polarise their audience and put the value of their brand at risk.
David Gelb, CEO of JBi Digital agrees: “If you have a genuine angle or personal experience, then express it, but do it in line with your company values or that of the industry you’re working within. Social media provides a platform for anyone to express an opinion with little fear of castigation.
“Too often CEOs put personal image above their company’s reputation by jumping on popular bandwagons for publicity. The end result often causes more harm than good because the public is often quick to point out the hypocrisy of CEOs who’s personal and business conduct does not match the social media line they’re pedalling.”
How to deal with an outspoken CEO
So, with all these outlets for CEOs to speak their mind in a very public arena, how do marketing teams and PR companies deal with outspoken business leaders?
Gelb continues: “Social media has been a gamechanger for the public, CEOs, and their respective crisis management PR teams. Many CEOs leave their profiles in the safe hands of their PR agencies. That way everything can be fact checked and edited to ensure comments don’t cause the company’s share price to plummet, much like it did for Tesla when Elon Musk unexpectedly announced over Twitter he was taking the company private.”
Scott Mullins, Operation Director of Pimlico Plumbers, is the son of the outspoken and often controversial Charlie Mullins, and he believes that his father’s approach has overwhelmingly been good for the business.
He comments: “It’s an exciting experience – we have never been shy about putting our head above the parapet and its part of our approach to life and business. We’ve always been bold in how we run the company and most of our customers like the way we operate.
“People like to hear forthright opinions, particularly the media and it has helped our company as we are never afraid of putting across our point of view.”
It is a different case for some outsourced PR companies, who must take into consideration that their client might say something damaging to the brand at any point. However, it also can lead to new opportunities to grow.
Hannah Haffield, MD of PR firm Make More Noise comments: “From a PR perspective, working with an outspoken CEO provides the opportunity to be bold, as long as they are outspoken in the right way. In fact, we have achieved far better results for the CEOs that are happy to share their opinion, as the media are far more interested in those who have something different and disruptive to say.
“However, it is important to get this strategy right from the outset, where any ‘outspoken CEO’ will need to be clear and consistent on what subject matters they can speak on, and how their opinion and content is positioned in the public domain.”
Marketing & Consultant expert, Tim Hyde, talked to Business Leader about the influence of social media on the modern day CEO.
Has the world of social media made CEOs and business leaders more open to sharing their opinions on public issues?
It can certainly cause serious problems for CEOs and large entities. If you look at the current situation between the NBA & China, which is a multi-billion $ market for the league, a tweet supporting Hong Kong was sent out from the Houston Rocket’s General Managers account and has since caused multiple Chinese businesses to rescind deals with the NBA and players who were playing exhibition games in Asia have been under immense pressure.
The NBA specifically prides itself on freedom of speech and empowers its players to stand up for social causes. However, since the tweet, both the players and the league are all in a very fragile position between standing up for what they believe in and keeping the monumental revenue stream that China provides.
From my perspective giving people a voice will always be a good thing and from a business perspective, there are some phenomenal case studies such as Gary Vaynerchuck and Steve Bartlett who have used their platforms to massively increase the growth of their businesses into the hundreds of millions.