Showing attitude – Is CEO activism the order of the day for consultants now?
November 5, 2020
A publicly communicated stance on sociopolitical issues from business leaders is no longer a rarity. But where does this new CEO activism come from? How should strategy consultancies and auditors respond to this trend?
In my #BeraterBeraterin column on Consulting.de I provide some insights.
Patagonia‘s stunt went viral via Twitter. On the back of the label of shorts of the US fashion brand, the political message “Vote the ***hole out” is written in unmistakably coarse words.
With this, Yvon Chouinard, the Patagonia founder, is openly directed against the Trump administration. The labels are the call to vote against politicians who deny climate change.
Not viral, but equally noteworthy, were the comments made at the end of September by Nicola Leibinger-Kammüller, CEO of Trumpf.
She commented in a Handelsblatt interview on party political processes and personnel decisions:
“People will still long for Angela Merkel back.”
Handelsblatt made this specific quote the header right away.
The common ground between the two – very different – business leaders?
You throw Milton Friedman‘s dictum „The business of business is business” overboard.
Is CEO activism – publicly communicated stances on sociopolitical issues – becoming the #newnormal in the pandemic?
The New York Times described CEO activism as the ‚new normal‘ already back in 2018.
According to this, top decision-makers are expected to comment on sociopolitical issues – from climate change to immigration to LGBTQ rights – beyond their core business.
Worth reading on this is the study „The political CEO: Rationales behind CEO sociopolitical activism“ by the non-profit association United Europe and the European School of Management and Technology (ESMT) Berlin.
It explores the question why more and more managers are positioning themselves politically, how they do so, and what the relevant factors are for a successful statement.
In it, 88% of the Germans surveyed demanded: Corporate leaders should take a political stance.
This puts them well above non-German decision-makers. Here, only 60% do expect this.
However, there is a massive gap between declarations of intent and actual implementation. Only 36% of German and 7% of non-German business leaders rated it as ‘very likely’ that they would speak out on sociopolitical issues in the future.
The reason? The feared faux pas!
CEOs are afraid of stating the wrong thing, upsetting clients and prospects, or even damaging their own company’s reputation. That’s why they prefer to stay out of political debates.
This concern cannot be completely dismissed:
According to the Edelman Trust Barometer 64% of consumers would boycott a brand because of its incorrect or lack of social positioning.
What is the consequence for Professional Services players?
On the one hand, strategy consultants or executive search firms could sit back and argue just like the Big4:
If their clients’ CEOs are so restrained, they may as well be.
On the other hand, it is becoming increasingly difficult to refrain from ‘showing one’s edge’ or to remain neutral. True to Watzlawik’s axiom “You cannot not communicate” silence is increasingly interpreted negatively.
Currently we are experiencing the biggest economic crisis of the post-war period. Record debt is being taken on. Jobs and economic livelihoods are under massive threat. Consulting firms and auditors are much closer to these economic issues on a daily basis than (professional) politicians will ever be.
For all the proposed solutions presented in the #COVID19 pandemic, not only health experts/virologists but also crisis-tested economists are needed. As the public’s buy-in for policy actions partially dwindles, every support is now critical.
In this respect, now is the right time for Professional Services to develop an ‘attitude towards attiude‘ and corresponding CEO activism.
Taken to its logical conclusion, thought leadership is not just about thought leadership in studies, but also about engaging in public discourse.
Especially now. Otherwise it remains theory.
It would also be the logical consequence to ‚walk the talk‘.
EY, for example, did lanch the study „CEO Imperative Study 2019“. “It is not enough for companies to engage in global challenges – the CEO must take the lead“, said Carmine Di Sibio, EY Global Chairman & CEO.
In doing so, CEOs would not be left alone. 76% of boards supported ‘their’ CEO taking a public stand on a political issue.
The gain in trust should trump the desire for neutrality
In recent years, confidence in the economy has increased. This in turn correlates with growing stakeholder expectations. The Edelman Trust Barometer 2020, for example, certifies that companies are the most trustworthy institutions globally. Even higher than governments.
According to the survey, 73% of respondents expect CEOs to take a public stance on important contentious issues. They are expected to bring about social changes if the state does not push them sufficiently.
Interestingly for the Professional Services sector: 67% of respondents express their trust in them – compared to 57% for financial services (the bottom of the ranking) and 75% for the technology sector (the top performer).
Five tips for Professional Services
1. The basic decision: yes or no towards attitude?
“If you’re not visible, you don’t take place” is how Tijen Onaran sums it up. The question of attitude is becoming increasingly relevant in the visibility strategy. Studies such as “Supply Chain in Disruption” or “Changed Consumer Sentiment under COVID19” are ‘classics’.
Whether these really lead to client loyalty or differentiation is to be discussed. The attitude question is also crucial for recruiting and employer branding.
According to „CEO Activism in 2017: High Noon in the C-Suite“, over 40% of Millennials are more loyal to an employer where the CEO takes a stand on social issues.
2. “Choose your battle well” – i.e. focus on a few key topics.
No one expects Professional Services leaders to be constantly ‘edgy’ about anything and everything. But expanding the communications mix beyond (sometimes quite generic) studies to core sociopolitical events is part of modern personal branding.
Two positive examples should be mentioned here.
Matthias Tauber (BCG) acknowledged the Corona app. Even if the app isn’t perfect at all: Unfortunately, it is the only one we have in Germany. All consultants talk about the necessary digitization push. Hence a public vote for the app isn’t illogical at all. Maybe more thought leaders will support BCG’s head of Germany in the second wave?
Secondly, there are the reactions to the demonstrations of the ‘Querdenker’ in Berlin on August 29. Here, after all, there are two top players’ who showed ‘flag against the flags’.
„Demokratie ist ein Privileg, ein hohes Gut, das es zu schätzen und zu schützen gilt. #wirsindmehr“ posted Dr. Ulrich Störk, Chairman of PwC Germany. (“Democracy is a privilege, a precious asset to be valued and protected. #wearemore”)
„Die rote Linie einer Demokratie“/”The red line of a democracy”: My point is that all those who took part in the demonstrations cannot claim that they did not see who was marching alongside them with imperial flags and similar symbolism. […] It is now up to us, the majority society, to answer this with a clear attitude, and from my point of view this can only be: Up to here and not one step further!”
Of course, the basic rule also applies to socio-political commentaries:
What is said must fit the CEO; i.e. the convictions communicated have to be the CEO’s own. Anything else would come across as a PR stunt. The credibility would be gone.
Equally important: The topics have to correlate with the corporate values.
For example, consultancies that have a vanishingly small quota of women at management level should perhaps push the topic of ‘Diversity & Inclusion’ rather less in terms of communication. This is probably also the reason why there has not yet been a single contribution to the #ichwill campaign by a professional services player.
4. Choose your Marketing channels well
From my experience, I don’t rule out any communication channel for attitude statements. Maybe not the big event (after the pandemic), but certainly the whole range from PR to mailings and LinkedIn.
In the cited ESMT study,
- two-thirds of respondents named social media
- 92% classic PR
5. Caution with party politics
In the U.S., it’s good manners to comment on party politics. In Germany, most people shy away from it. According to the ESMT study, only 8% of respondents consider it appropriate to comment on politicians or parties. This puts their reasoning in line with that of Peter Terium, ex-CEO of Innogy SE, who formulated “companies and CEOs have no political responsibility, but they do have a social responsibility“.
It would be a big step for Professional Services to take a stronger stance, but…
… two aspects are given to them on the way:
- Special times require special measures.
89% of Germans call for companies to work with government and NGOs to tackle the crisis, according to the „Edelman Trust Barometer 2020 Special Report“.
So what would be the argument against participating in Maybrit Illner’s talk show? Anyone who saw the debate last Thursday knows that we’re going around in circles. Perhaps a senior strategy consultant who has applied enterprise resilience and scenario analyses in the past has more to say than that FFP2 masks add value of FFP2?
- Showing the flag in a well-considered way does not harm the reputation.
On the contrary. According to the Reputation Institute’s „CEO RepTrak-study“ it is crucial for corporate leaders to be visible in public and to take a stand. This is because the ‘responsibility’ dimension – which includes ethical behavior and concern for sociopolitical issues – accounts for almost one-third of the CEO’s overall reputation.
So be bold and show attitude!
view Consulting.de article (in German)