If CEOs learn anything from the campaign to boycott GB News and the fallout generated by companies’ responses, it is that they ignore politics at their peril. Over the last half-century, one of the most important shifts in the business world has been corporate leaders recognising they have wider responsibilities to society as well as their bottom line.
As we move towards a post-pandemic economy, a similar shift is taking place. Success will now also depend on navigating an increasingly complex set of political issues and require skills more commonly learnt on the campaign trail than at business school.
Greater understanding of the role businesses play in keeping the country running, alongside the unprecedented levels of taxpayer support provided throughout the pandemic has empowered politicians, investors and the public to start holding corporate leaders to account as though they were in public office. This is a trend that is here to stay, especially as the Conservative Party seeks to solidify the new coalition of voters it assembled in 2019.
The backlash against companies who have kept cash from government support schemes, despite seeing strong financial performance and attempting to pay out bonuses to management illustrates this. Given the strength of feeling, it is perhaps unsurprising that almost £1 billion has already been handed back by large firms, despite there being no legal requirement to do so. But beyond sidestepping such pitfalls, businesses need to protect their reputation for the long-term by effectively communicating the good they do in ways that are very familiar to politicians – think jobs created and areas regenerated, as much as margins and returns to investors.
Firms also face a growing level of pressure to take stances on wider political and social issues. In an acceleration of trends first seen in the USA, changing consumer expectations and the relentless drumbeat of social media make it harder than ever before to stay silent. According to recent research, more than half of British consumers now consider a brand’s stance on social issues important, a figure that rises amongst younger age groups.
That is not to say companies and their leaders should always weigh in – a misplaced response is likely to be the worst option of all. But in deciding how to react, they will need to start thinking about their customer bases like a politician thinks of their electorate – building support amongst customers and potential customers, whilst minimising attacks from critics. Nor can leaders forget their company’s core values, especially where they’ve taken ethical positions that require them to act. As any politician will tell you, hypocrisy is a brand that sticks.
Without a strategy to manage and balance these factors, companies often respond in an inauthentic, knee-jerk fashion. Such actions are rarely enough to please those calling for change and can’t adequately be explained to those with contrasting views, bringing a lose-lose outcome. It’s also vitally important to remember that those who shout the loudest, particularly online, may not represent your customer base.
Responses to the GB News boycott demonstrate how this can play out. Despite the Co-Op Group holding long-standing links to left-of-centre politics, it was able to reject demands that it stop advertising with the news channel with minimal backlash because the business articulated a clear set of principles on which it was basing its conclusion. By contrast, IKEA’s decision to join the boycott quickly backfired, when it was shown to be inconsistent with actions elsewhere and resulted in a rapid and embarrassing U-turn.
Some CEOs may seek out new roles as activists but even those leaders with no desire to campaign for political causes will have little choice but to engage with politics. There is no simple playbook for this new world, but they need to proceed with caution, act authentically, and remember to listen to the opinions of their customer base. In the process, they may have to ask themselves a question they never thought they would – what would a politician do?