Companies and brands are more likely these days to take stands on social and political issues outside their core areas of business. When they don’t, some stakeholders, who expect they should, can become active detractors. If you haven’t seen the surveys that substantiate that trend or been party to the internal discussions that drive it, you’ve certainly seen the results. From issues of war and peace to immigration, social justice, gender and others, companies are making their positions known and even taking action.
This dynamic isn’t new, but a number of recent issues and events have acted as an accelerant. Many enterprises found their voices following the murder of George Floyd in 2020. Early in 2022, corporate ties to the Beijing Olympic Games came under scrutiny. More recently, Russia’s invasion of Ukraine triggered explicit commentary and action from major companies. In some cases, private enterprise moved more quickly than governments did.
Longtime taboos against corporate issues engagement have fallen away. That takes care of “coulda.” But when it’s your company’s turn to run either into the spotlight or away from it, what are you doing to address “shoulda”?
Engaging outside your mercantile raison d’être can weigh heavily on reputation, morale, and marketplace success. When other decisions have stakes that high, you approach them with logical rigor: facts, analyses, likely outcomes. But politics and social questions bring emotion into the picture, and emotion can drive inconsistency. That is precisely why it’s so important to cultivate a deliberate process for guiding issues engagement. At Ketchum, we believe a blend of art and science is required.
Know the stakes—and the stakeholders
There was a time when your market performance, financial performance and reputation all hinged on the same thing: how well your company did the thing it’s in business to do. Now, those factors have diverged, and a broader set of elements and variables drive corporate reputation.
Customers and shareholders remain at the center, and regulators and opinion leaders are still important audiences. But today, current and even future employees are more influential than ever. And they want and expect different things. Purpose and ethics are displacing compensation and career advancement as motivators. When we polled a webinar audience about this recently, 70 percent told us employee activism was affecting company decisions.
Because employees have a greater voice, they introduce a new kind of reputational risk: internal backlash. If enough of your own people disagree with the company’s actions—or inaction—their stance can reflect on the company’s reputation and impact its business.
Master the art
To engage or not to engage is a business decision. To keep the passions of the moment from driving it, a company needs a defined, issue-agnostic process that ensures the same criteria apply to every situation and drive decision-making.
That process includes a conscious definition of what perceptions you want to cultivate, a comprehensive map of your stakeholders, and an effort to understand what people expect and how they feel about the issues.
We categorize this as art because it involves judgment calls, not measurements. What is the potential risk of responding or not responding? What is the potential benefit of each course? Diving into the public fray when it carries little risk and is likely to reflect well on the company is very different from taking the same plunge when the benefits are unclear and the risks are higher. Among the factors that can guide these judgments: Is the company part of the affected community? Have people been asking you for your position? What are other companies doing or saying? And what is the tone of media coverage?
What you may have to say about an issue will be different every time. But you should be consistent in the way you decide whether to speak or act at all. The questions you answer may be subjective, but they should be the same questions each time. They also set precedent and further influence expectations – nothing happens in isolation.
Harness the science
These judgment calls take place against a backdrop you can assess empirically. Some analytics tools can help you chart the velocity of an issue and its news coverage. Others can help evaluate the actions and impressions key stakeholders have in response to issues and events. Heat mapping can illustrate the current and future states of issues that your company and industry may face.
No amount of calculus can remove the human element from matters like these. These are emotional issues, and the positions your company takes will almost certainly reflect that. But if you aren’t deliberate in the way you approach your engagement, you’re left addressing issues case by case. That ad hoc approach is an invitation to be emotional and inconsistent, and it opens the door to letting the personal passions of a few senior leaders outweigh a sober assessment of what’s best for the whole organization.
To put it another way: You don’t follow your gut in making the more customary kinds of major business decisions. You apply managerial science and professional judgment. Now that issue response has grown to become a major business decision, the same rules should apply.