Nike. Starbucks. Patagonia. Nordstrom. Uber. Budweiser. Pepsi. NFL.
What do these brands have in common?
They’ve all been at the center of a firestorm of social and political controversy, poster children for the risks brands face today as they sit squarely in the crosshairs of a politicized marketplace. The news seems to carry a new story every day of another brand caught up in an overnight crisis.
Anyone with responsibility for the health of a company’s brand and reputation needs to understand these new risks to adequately prepare for them.
Brands now operate in a new reality, characterized by massive polarization — political, economic, cultural, geographic. There has been, also, a cratering of trust in every public institution — government, media, business and even NGOs. An increase in fear levels across the board add energy and anxiety into the mix.
As a result, people are more politically active than ever — made easier than ever with the help of social media. Activist consumers and interest groups have also discovered the power of leveraging brands in their agenda — threatening boycotts or other actions to drive a response.
On top of this new reality, brands now face new expectations. In a world where people don’t trust the government to fix the world’s problems, they increasingly look to corporate America to be a part of the solution — to make a difference, not just soup or soap or software.
The expectation to engage only brings with it more brand risk — the possibility that any definitive point of view will alienate as many people as it attracts. In a polarized society, there’s no more comfortable middle ground where a brand can please everyone.
So what’s a company to do?
Like it or not, large and small businesses need to acknowledge this new reality and embrace the new rules of stewarding brand and reputation in turbulent times.
The first rule in this environment is, get clear about company values, beliefs and purpose. These not only provide the basis for how to engage, but they also act as a moral compass for company actions. Good sources for inspiration are the founder’s original vision, the passions and beliefs of leadership, the concerns of employees and the issues that naturally connect to the business.
The values definition step is critical for all organizations, even if they choose to not publicly engage in social/political issues. A company can’t control whether or not it is dragged unwillingly into a public debate by, for instance, an employee action, an activist consumer or a Presidential tweet. Without a grounding in core values, a company suddenly in the glare of the spotlight will be caught flatfooted and unprepared to respond, often leading to a brand crisis. This is exactly what happened to the NFL when it was engulfed by the kneeling controversy, without an effective response in terms of policy or communications for more than 18 months.
Next, a company must determine which issues to address. Appearing insincere and opportunistic by jumping on the bandwagon of a social problem can drive fierce backlash — as it did with the Pepsi Kendall Jenner ad showing her stopping a near-riot with a can of soda. Any issue a brand wants to engage in must satisfy three filters: it’s important to society, it’s relevant to the brand’s business, and the brand has permission and credibility in that dialogue.
Finally, leadership must determine what posture it wants to adopt with respect to broader societal issues. Many wrongly assume that it’s a binary choice between leaping fully into a hotly polarizing stance and remaining paralyzed. This leads many to fail to even take the step of defining their core values.
There is a spectrum of ways that companies can approach the broader world, gradually increasing the likelihood that some will respond positively and others negatively to the company’s message. The choices range from quietly living by brand values, publicly expressing a higher purpose, taking on a tension-filled issue without taking a specific polarizing stance, and adopting a clear position on a hotly debated issue.
Whatever choice a company makes in engaging in the broader social and political arena, its leadership can best assure the ongoing health of its brand and reputation by going through the process of understanding the new realities that surround it, grounding in the core values that should drive their choices, and thoughtfully engaging in relevant issues in a way that reflects leadership’s appetite for reputational risk and customer relevance.
Peter Horst is a Fortune 500 Chief Marketing Officer and has led teams at Hershey, Capital One, TD Ameritrade and others. He has developed iconic and award-winning marketing campaigns and products across many industries. As founder of marketing consultancy CMO Inc., Horst advises organizations of all sizes on brand and marketing strategy. A highly rated keynote speaker, Horst is the author of the best-selling book Marketing in the #FakeNews Era.