Lessons from hard school of 2018 for business and bosses

● Gilets jaunes, the Irish backstop, novichok poisoning. These were some of the phrases we’ve heard this year — and they’ve all had business and political consequences. Of all the lessons company bosses have had to learn in 2018, one of the most important is:

CEOs have to be politically responsive.

Business leaders have often kept their heads down during political controversies, as UK CEOs largely did during the 2016 EU referendum. In 2013, when I questioned leading US companies on their attitude to gun rights, they refused to answer. Political issues often divide customers; why risk alienating them?

That changed this year — political issues have become too overwhelming to ignore. British business leaders spoke out about the perils of a no-deal Brexit. After February’s shooting at a school in Parkland, Florida, US, several companies felt compelled to end discounts to members of the National Rifle Association.

In trying to stem the gilets jaunes (yellow vests) street protests, French President Emmanuel Macron called business leaders to the Élysée Palace to demand their support.

What other lessons did we learn in 2018?

Advisers can no longer skip away from their troubled clients.

After the collapse of Enron, McKinsey, one of its principal advisers, said it was not its fault. “We advise clients on their strategy. They are responsible for what action they take,” McKinsey said in 2002. No more. McKinsey has attracted fierce criticism this year over its involvement with companies connected to the Gupta family in SA. Last month, a parliamentary report said McKinsey had acted as a “de facto legitimising vehicle” for Trillian, a Gupta-linked company, to siphon money from Eskom.

Companies will be battered by any divergence between their public profile and their private behaviour.

Sheryl Sandberg, Facebook’s COO, came under fire after she admitted questioning the motives of investor George Soros, who had criticised the company. She had previously denied commissioning any research into Soros. Facebook was also in trouble over the leak of users’ personal data to Cambridge Analytica. Elliot Schrage, Facebook’s outgoing vice-president of communications, said CEO Mark Zuckerberg had been “more idealistic than the real world permits”.

The 2018 response: make sure your company’s real-world behaviour matches your professed ideals.

The #MeToo movement marks the end of the imperial manager.

When Deloitte revealed it had fired 20 partners for inappropriate behaviour over the past four years, it said it would not tolerate such conduct “be it of a sexual nature or of a bullying nature”. The dopiest managers will have got the message about sexual harassment by now, even if they are not acting on it. — © The Financial Times