In the world of big business, taking a stance on a controversial issue has generally been seen as a risky move. When a company voices its opinion, the thinking goes, it is setting itself up to alienate the portion of its audience that disagrees with this stance. As a result, it has become standard practice to 'ride the fence' on social issues.
Is this still the best approach today?
In my opinion, it is not. Four primary factors have led me to this conclusion. First, millennials have been found to be more socially active and assertive than previous generations. One study found that 91% of millennials would switch brands to one associated with a cause. As millennial purchasing power increases, the benefit of competitive differentiation through alignment with a social cause will only increase.
Second, taking a stance can help companies better attract and retain talent. A Deloitte study fund that 6 out of 10 millennials said a sense of purpose was part of the reason they chose to work for their current employer. As millennials continue to rise in prominence in the workplace and the talent pool remains critically competitive, this factor will continue to be compelling.
Third, standing up for a cause can support an overarching alignment throughout a company's internal teams. In a parallel example, Alcoa was able to quintuple its stock price by rallying its teams around a significant top-down call for safety. In Alcoa's case, the business was able to better transform and compete as a result of this 'keystone habit.' I posit that a 'keystone social issue' can support the same transformative effect.
Finally, our research at Hotwire, in our report on High Stakes Leadership in a Post-B2B World, has revealed high-stakes events, such as a data breach or environmental crisis, can have detrimental effects on both B2B and B2C companies. A greater social purpose and alignment with social issues can help prepare for and reduce the likelihood and impact of such events.
In the Business Case for Purpose, jointly produced by the EY Beacon Institute and HBR, the bottom-line rationale for being purpose-driven is further explored. For executives considering a stronger stance on a social issue or more direct alignment with a core social purpose, this report is a great place to start.
However, employees who would like to see their employer become more socially active should think twice before sending this 'Business Case' to their bosses. An HBR study in February of this year found that sharing a business case for purpose wasn't very useful in convincing managers to devote time, attention, money, or other resources to address the social issue. Additionally, a moral rationale alone was also not very effective. Employees were best able to have an impact if they used moral language and also framed the social issue as part of the organization’s values and mission.
Recently several companies have broken the silence on controversial issues, including Patagonia (Climate Change), Nike (Systemic Oppression), and SalesForce (Gun Control). I'm thrilled to see this activity, yet I see this as the tip of the iceberg. The benefits of taking a stance on a social issue aren't reserved for multinational conglomerates. I'd like to see more SMBs and SMEs stand up in support of social causes.
I feel that doing business is just like practising Buddhism. Money is not your only purpose. Your purpose is to make things better for other people, and in the end, money will come as a result. - Guo Guangchang