Blue And Red Companies: How CEO Activism Is Reshaping Workforce Politics
An era of a new kind of CEO activism appears to be in full swing. Think of Nike CEO Mark Parker's decision to feature ads with Colin Kaepernick, the NFL quarterback turned racial justice activist. Or Dick's Sporting Goods CEO Ed Stack, who in February pulled assault-style weapons from store shelves and raised the minimum age to buy guns to 21.
Corporate leaders, who historically stayed silent on policy, are increasingly speaking out. Their statements are directed at consumers, but employees are also responding and it is affecting morale and company culture to recruitment.
Levi Strauss & Co. CEO Chip Bergh says he anticipated impassioned responses last month when he made a corporate donation of $1 million toward preventing gun violence.
"I knew I was going to get a lot of hate mail. I knew I was going to get threats. I knew my family was going to get threats, and all of that has happened," he says. "But somebody's got to have the courage to step up and say something needs to be done."
Some angry emails Bergh responded to came from his own employees, who interpreted the donation as hostile to gun ownership. (Bergh, an Army veteran, says it was not.) He also received support, including from Levi's employees whose children had been in lockdowns at school because of active shooters.
Either way, he says it is not a move he regrets. He says activism — from supporting desegregation to LGBT rights — has long been part of the California-based company's history.
"They may not always agree with every single position or stand that we're taking, but they appreciate the fact that we are willing to dive into these tough issues," Bergh says.
In today's hyperpartisan environment, Bergh says employees want to know where their leaders stand. And strong values are increasingly part of what workers look for in an employer.
"If you're in HR or finance or marketing, you can go work anywhere in San Francisco today," he says. "We have very intense loyalty to this company and a big part of the reason we've got that kind of loyalty is that this is part of our value proposition."
This new era of CEO activism started around 2014, when Apple CEO Tim Cook publicly supported gay rights, and Starbucks' then-CEO Howard Schultz wrote an open letter about race, says Aaron Chatterji, a professor of business and public policy at Duke University. It intensified with the election of Donald Trump.
"What's changed now is that we're more polarized as a society, and it's much more difficult to occupy that middle ground without being drawn into the fight," Chatterji says.
These fights often play out very publicly.
Social media amplify the voices of people who are most passionate about their loyalties — whether it's to a political party, a news source or a brand. And Chatterji says it has changed business norms by allowing workers to speak directly to their leaders. He says companies that recognize this play up their values to appeal to their core customers, just as political parties do for their base.
"A lot of people say, 'Look, it doesn't make sense from a capitalist point of view, or a market point of view, to get involved in politics,' and I think that's actually missing the point," he says, because corporate identities were already becoming more partisan.
"I think increasingly you're going to see red brands and blue brands," says Melissa Harris, CEO of marketing firm M. Harris & Co. in Chicago. As more activist CEOs speak out, she says companies are competing for attention. "They come to us asking for language that is more provocative, almost controversial; they want these messages to travel farther," she says.
Of course, many CEOs prefer to avoid controversy by keeping with the adage "never mix business and politics." But experts say staying silent comes with its own downsides, because a CEO's position influences employee recruitment and retention, especially among younger workers.
"It's going to have a recruiting impact," says Scott Dobroski, community expert for Glassdoor, a website where workers can leave comments about their workplace. His company's surveys show values are still secondary considerations, compared with salary, commute times and work-life balance. But, he says, how CEOs define their company's values can directly impact whether candidates apply for jobs. "You can also see quality candidates applying to those roles perhaps because of that," he says. "And then, if they get hired, perhaps even staying longer."
A July survey by public relations firm Weber Shandwick found that 31 percent of employees said they felt more engaged and loyal to their companies when they agreed with their CEO's stances. It had the opposite effect for the 23 percent of those who disagreed with their leader.
Nor is it easy for CEOs to remain silent.
"Whereas it used to be leaders made these decisions, reviewed it with their board and came out with their position, I think what we're seeing now is employees are impacting leaders and impressing on them that this is an issue that is that important that they do speak out," says Leslie Gaines-Ross, chief reputation strategist at Weber Shandwick. "So I think it's a double-edged sword, and that's probably the hardest part of it, is that there is no playbook anymore for taking a stand."
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