More CEOs Take the Lead on Social Issues; but Is it the Right Strategy?

Walmart CEO Doug McMillon explained the trend in a McKinsey & Co. article: “Long-term capitalism goes one step further than the modern triple-bottom line movement, asking companies to actively reshape the systems in which they operate [and taking] a deeper view of business’ role in society, recognizing that, in the long run, the interests of stakeholders converge with the interests of the broader community.”

A good example of that is Chobani CEO Hamdi Ulukaya, who continues to spearhead his brand’s support of LGBT causes by authorizing a mini-initiative on Chobani social media in reference to the U.S. Supreme Court deliberations over the right to gay marriage. The new effort was a follow-up to his decision during the 2014 Olympics for Chobani “to come out very strongly” about non-discrimination in the matters of “religion or who you love or where you came from,” Jessica Lauria, Chobani’s senior director of brand communications told CEO Briefing.

“We’re not a homogeneous society. The tipping point has happened. And I think that brands [that] get it are going to do better over the long-term than brands [that] don’t.”

And in speaking with Advertising Age recently about Honeymaid’s 2014 ‘This is Wholesome’ campaign, which has blended families at the center, Gary Osifchin, senior marketing director for Mondelez International said, “We’re not a homogeneous society. The tipping point has happened. And I think that brands [that] get it are going to do better over the long-term than brands [that] don’t.”

The fact that society has ‘crossed a tipping point’ with social change could, could be enough of an answer for some to the question of whether CEOs and business leaders should take the lead on social issues. However, as in any exploration into new territory, there are opponents to match the proponents, and CEOs should consider whether the publicity, both good and bad, can help or hinder their firm.

“Perhaps Mr. Cook should first close the Apple store in Moscow, where homosexuals are persecuted as a matter of state policy, or in Riyadh, where women aren’t allowed to drive cars and being gay is punishable by death,” opined The Wall Street Journal. But Cook “is celebrated for delivering a moral lecture to Hoosiers on behalf of Apple because liberals agree with him.”

Meanwhile, Glenn Kelman, CEO of Redfin, an online real estate firm, told The New York Times that he is concerned about the unintended expectations created by CEO activism on some issues. “So many tech companies have embraced a mission that they say is larger than profits,” he said. “Once you wrap yourself up in a moral flag, you have to carry it to the top of other hills.”

Such issues have caused some prominent CEOs to take at least one step back and suggest that companies at least should become only ‘fast followers’ to pressures for social change, not ‘cutting-edge pioneers’.

“Should business lead the social agenda?” Nestle CEO Paul Bulcke said at the World Economic Forum in Davos, where hundreds of influential business chiefs gather annually. “I would say very clearly, no, it should not lead the agenda, but it should be part of it. It’s a nuance that’s very important.”

In the end, before stepping out on a social issue, company boards, CEOs and employees should be aligned to ensure the message is consistent no matter who is speaking.

Dale Buss
Dale Buss is a long-time contributor to Chief Executive, Forbes, The Wall Street Journal and other top-flight business publications. He lives in Michigan.

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