Management Magazine
Corporate Case Study

Why shift to social, political debates is good for business

Customers want companies to motivate change by either showcasing their own investments around an issue, or by providing avenues for customers to engage and contribute themselves.

BY ELIZABETH MALOBA

If you keep an eye on controversies, you may have noticed a few names in the past year that made headlines – Nike, ABC (Disney), Wal-Mart, Sears, NBC Universal and Macy’s. The days when companies safely sat out the big social and political issues of the day are no more.

In response to the French Open’s suggestion that Serena Williams would no longer be allowed to wear her health preserving sports suit to future matches, Nike went for a classically sassy response and published an image captioned “You can take the superhero out of her costume, but you can never take away her superpowers”. When Colin Kaepernick “took a knee” in protest during the national anthem, it earned him a place as the face of Nike’s “Just do it” campaign for their 30th anniversary. And when Tiger Woods won at the PGA, Nike welcomed him back by releasing an ad that celebrated the win and played on the doubts about his career.

Impact of social controversies

ABC cancelled Roseanne Barr’s revived sitcom, which was hugely popular, after she posted a racist and Islamophobic tweet that attacked former Obama White House adviser Valerie Jarrett. The show was ABC’s most watched “new” series averaging almost 18 million viewers per episode. The network said, “Roseanne’s Twitter statement is abhorrent, repugnant and inconsistent with our values,” Bob Iger, CEO of Disney (which own ABC), wrote on Twitter, “There was only one thing to do here, and that was the right thing”. Jake Paul, a famous YouTuber, lost his acting role in Disney following complaints from his West Hollywood neighbours about being the world’s worst neighbour. Wal-Mart and Sears removed the Confederate flag from their shelves while South Carolina’s politicians were still debating the issue; and NBC Universal and Macy’s parted ways with Trump when he called Mexican immigrants rapists and drug dealers.

Shift to social Media

The shift toward social issues is taking place at a time when social media is creating a real-time barometer for customers’ reactions to news events or product issues. Companies have in place social media monitoring tools and are constantly out there looking for what’s being said as well as looking to be part of the conversation. Frank Bruni wrote an article for the New Yorker arguing that business is increasingly more in sync with broader public opinion than many politicians; and highlighting multiple instances where corporate leaders were advocating for solutions that bring people together, weighing in on issues of social justice, diversity and human dignity. The shift reflects shifting customer expectations. Customers want companies to engage in social and political issues – they want companies to motivate change by either showcasing their own investments around an issue, or by providing avenues for customers to engage and contribute themselves.

The shift by companies is not just a feel good factor, it is good business. Nike and Disney are both among Interbrand’s 2018 global top 100 brands; they gained financially and increased their market share as a result of engaging. Nike sits atop the global sports apparel market by a healthy margin – their closest rival comes in at least 4 percentage points behind them –70 per cent of Nike customers expressed the intentions to continue buying Nike products (2018 UBS Evidence Lab). While their pricing power is increasing, their competitors are relying more heavily on discounts to increase sales. Nike’s share price is up 16.59 per cent this year. Research by Thomson Reuters showed that Nike sold far more items between September 3 and September 13 than in the 10-day period before the Kaepernick ad. Disney’s results have consistently topped Wall Street expectations with blockbusters such as Black Panther and Avengers: Infinity War fuelling gains in revenue and profit. In May 2018, Bob Iger said “with more than USD1.3 billion in box office to date, Black Panther makes a very loud statement about the important risk-taking and value of inclusion”. Black Panther was the 16th Disney film to gross over one billion dollars.

Pragmatism – the diverse employee and customer bases companies represent – is not the only force driving business to engage. There is an evolving sense of corporate social conscience – driven by leaders and organizational values and a desire for company strengths to make a positive impact on society. Companies are getting more comfortable expressing a corporate social conscience. This sets in motion the larger sense of seeing and relating to ‘the other’ and sets the stage for more ethical outcomes over time. By getting involved in societal issues, the light inevitably shines back on stakeholder issues within companies that need addressing – pay equity, equal access to promotion, and the impact of executive compensation policies on corporate culture among others. Ultimately, companies have to figure out how they can lead the way by leading themselves in directions that ensure they have environments where all their stakeholders flourish.

Business leaders can learn from the recent crises that have engulfed Uber, Starbucks and the NFL – there is no safe side-lines anymore.

Elizabeth Maloba is Organisational Development and Business Growth Facilitator based in Gaborone.

Email: info@businessafric.com

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