CEOs Trump

As the cal­cu­lus on whether it pays to stay silent or speak up rapidly shifts, Amer­i­can com­pa­nies have emerged as a force for so­cial change

The Washington Post Sunday - - BUSINESS - BY JENA MCGRE­GOR AND EL­IZ­A­BETH DWOSKIN

Af­ter re­ceiv­ing an honorary doc­tor­ate at the Univer­sity of Glas­gow last week, Ap­ple CEO Tim Cook took ques­tions from the ca­pac­ity crowd. The first stu­dent had two for the leader of the world’s most prof­itable com­pany. He won­dered, to laugh­ter, whether he could have a job. And then he asked about Ap­ple’s “next big thing” — not just as far as prod­ucts, but “in terms of ac­tivism.” ¶ Cook said he doesn’t view him­self or Ap­ple as an “ac­tivist,” cast­ing the com­pany’s bat­tles over pri­vacy rights or its op­po­si­tion to Pres­i­dent Trump’s im­mi­gra­tion or­der in moral terms about right and wrong. Just be­fore that he had in­voked the Rev. Martin Luther King Jr.’s fa­mous quote about the prob­lem with “the ap­palling si­lence of the good peo­ple.” ¶ Yet more and more, con­sumers and em­ploy­ees are like that stu­dent in Scot­land, ex­pect­ing the com­pa­nies they buy from or work for to take a stand on so­cial is­sues. And in­creas­ingly, CEOs are re­spond­ing. ¶ Amer­i­can com­pa­nies have emerged as a force for so­cial change in re­cent years and one of the most vo­cal crit­ics of the new pres­i­dent’s ex­ec­u­tive or­der to tem­po­rar­ily ban mi­grants from seven Mus­lim­ma­jor­ity coun­tries.

In the days af­ter Trump’s travel ban was is­sued, more than a dozen top ex­ec­u­tives at ri­val com­pa­nies in Sil­i­con Val­ley, in­clud­ing Cook, Tesla’s Elon Musk, Mi­crosoft’s Satya Nadella and Face­book’s Mark Zucker­berg, traded a flurry of can­did emails to dis­cuss the re­sponse, ac­cord­ing to sources fa­mil­iar with the dis­cus­sions.

In ad­di­tion, more than 100 tech CEOs signed an am­i­cus brief against the ex­ec­u­tive or­der, which a fed­eral ap­peals court ruled would re­main frozen; Trump is ex­pected to is­sue a new im­mi­gra­tion or­der.

On Thurs­day, Zucker­berg an­nounced, in a 6,000-word man­i­festo, that he was re­ori­ent­ing Face­book to­ward is­sues that have a civic im­pact and build a global com­mu­nity — fo­cus­ing on ar­eas such as how the so­cial net­work can im­prove safety dur­ing crises, and pos­si­bly chang­ing the prod­uct to dis­play a greater va­ri­ety of po­lit­i­cal view­points.

Al­though Sil­i­con Val­ley has led the op­po­si­tion, com­pa­nies as di­verse as Chobani, Nike, Ford, Gold­man Sachs and MasterCard all said they were against the im­mi­gra­tion or­der or ex­pressed con­cerns about it. More than 160 biotech ex­ec­u­tives blasted it in a let­ter pub­lished this month.

Star­bucks CEO Howard Schultz said he planned to hire 10,000 refugees in 75 coun­tries over five years; he said that “we will nei­ther stand by, nor stand silent, as the un­cer­tainty around the new ad­min­is­tra­tion’s ac­tions grows with each pass­ing day.”

“There’s just noth­ing,” in scale or swift­ness, that has com­pared to the cor­po­rate re­sponse to Trump’s en­try ban, said Nancy Koehn, a his­to­rian at Har­vard Busi­ness School.

A ‘pub­lic kind of drum­beat’

Trump has billed him­self as a busi­ness­man who could run the coun­try like he does a cor­po­ra­tion, and many ex­ec­u­tives have stood by him, promis­ing new U.S. jobs, ex­press­ing con­fi­dence about his eco­nomic poli­cies, or tak­ing part in a parade of high­pro­file meet­ings at Trump Tower or the White House.

Oth­ers have stood on the side­lines, fear­ful of invit­ing an an­gry tweet­storm from Trump, who can quickly stir a tem­pest that rat­tles their share prices.

Even so, Koehn noted that it’s highly un­usual to see cor­po­ra­tions take a pub­lic stand against a pres­i­dent so early in his first term.

“Go back to early la­bor law leg­is­la­tion. Go back to apartheid,” she said. “It’s re­ally hard to find the pub­lic kind of drum­beat of this ac­tion, across these dif­fer­ent kinds of or­ga­ni­za­tions, in such a short span of time.”

As the cal­cu­lus on whether it pays to stay silent or speak up rapidly shifts, the risks for com­pa­nies can cut both ways.

Speak­ing out can alien­ate con­sumers who dis­agree with the com­pany’s views, as Star­bucks saw when it faced boy­cotts from the right af­ter Schultz’s refugee ac­tion. Audi drew fire when it took up the gen­der pay gap in a Su­per Bowl spot.

On the other hand, ride­hail­ing com­pany Uber faces a boy­cott from the left, with thou­sands of peo­ple delet­ing their ac­counts be­cause they be­lieve the com­pany has not done enough to op­pose the ban.

This spirit of ac­tivism pre­dated Trump. Cook, like Schultz at Star­bucks and Marc Be­nioff at Sales­force, has been out­spo­ken on such is­sues as gay rights and racial equal­ity for some time.

Such ef­forts gal­va­nized around state-level gay rights is­sues.

In re­cent years, com­pa­nies signed on to le­gal briefs sup­port- ing same-sex mar­riage and added their names en masse to let­ters against state leg­is­la­tion that crit­ics view as dis­crim­i­na­tory to­ward LGBT groups.

A few, such as PayPal and Deutsche Bank, even can­celed planned busi­ness ex­pan­sions in North Carolina over a bill that blocked trans­gen­der peo­ple from us­ing the bath­room of their gen­der iden­tity in gov­ern­ment build­ings and pub­lic schools.

A busi­ness in­ter­est

Busi­ness lead­ers have taken po­lit­i­cal stances in the past, but usu­ally be­hind the scenes. Their more pub­lic state­ments to­day are not mere cor­po­rate al­tru­ism but of­ten have an eco­nomic in­ter­est: Fears about changes in visa pro­grams, es­pe­cially in a tech in­dus­try de­pen­dent on them, have made speak­ing out a busi­ness im­per­a­tive.

Mean­while, the rise of so­cial me­dia, which can quickly mo­bi­lize large groups and are what Koehn calls “the lighter fluid in all this,” has put new pres­sure on chief ex­ec­u­tives to speak up or take ac­tion. Grab Your Wal­let, a so­cial me­dia cam­paign, has pushed con­sumers to boy­cott the Trump fam­ily’s prod­ucts.

“CEOs’ hands are be­ing forced, by con­sumers, by em­ploy­ees, by the larger field of pub­lic dis­course,” Koehn said. “Some of what is hap­pen­ing now is so con­tro­ver­sial, and the stakes are so high, that busi­ness lead­ers are re­think­ing what it means to pro­tect [their] brand in a new land­scape.”

Aaron Chat­terji, a pro­fes­sor at Duke Univer­sity’s Fuqua School of Busi­ness who has studied CEO ac­tivism, says that what’s changed most over the past year is that stay­ing out of the fray now has a cost.

“Si­lence used to be the de­fault pos­ture,” but po­lit­i­cal po­lar­iza­tion, Face­book and Twit­ter have changed that, Chat­terji said. “It’s a choose-a-side men­tal­ity. The mid­dle is harder to oc­cupy. And with the pro­lif­er­a­tion of so­cial me­dia, it’s kind of like a mi­cro­phone that’s al­ways on. If you’re not speak­ing out, it’s more con­spic­u­ous.”

That’s es­pe­cially true for com­pa­nies in the technology in­dus­try or that have a large swath of mil­len­nial work­ers, who are ac­cus­tomed to ex­press­ing them­selves, re­main less loyal to in­di­vid­ual com­pa­nies and are skep­ti­cal of cor­po­rate Amer­ica.

Brad Tay­lor, an en­gi­neer at San Fran­cisco-based Op­ti­mizely, is or­ga­niz­ing a walk­out of tech work­ers on March 14 that he says is in­tended to send a mes­sage to busi­ness lead­ers and present a uni­fied front against the im­mi­gra­tion or­der.

He said he knows peo­ple start­ing to look for other jobs af­ter a CEO’s ini­tial state­ment against the or­der wasn’t strong enough.

“There’s some ir­re­versible dam­age,” he says. Be­fore more chief ex­ec­u­tives be­gan speak­ing out, friends told him they were “some­times even em­bar­rassed to say they worked at some of these com­pa­nies” that had not made a pub­lic state­ment.

Of course, sought-af­ter en­gi­neers — the ones a Sil­i­con Val­ley ad­viser com­pared to “five-star col­lege foot­ball re­cruits” — risk far less when they speak out. “Tech work­ers are in huge de­mand right now and con­stantly be­ing re­cruited,” Tay­lor said.

Pres­sure from the front lines

Other tech work­ers are gath­er­ing sig­na­tures to urge their bosses to do more.

IBM en­gi­neer Daniel Han­ley, 35, started a pe­ti­tion in Novem­ber that now has more than 2,000 sig­na­to­ries, about 1,300 of whom have self-iden­ti­fied as IBM em­ploy­ees, ac­cord­ing to Han­ley.

An IBM spokesper­son de­clined to com­ment about the pe­ti­tion. In an in­ter­nal mes­sage to em­ploy­ees, CEO Ginni Rometty wrote that “some have sug­gested that we should not en­gage with the U.S. ad­min­is­tra­tion. I dis­agree. Our ex­pe­ri­ence has taught us that en­gage­ment — reach­ing out, lis­ten­ing and hav­ing authen­tic dia­logue — is the best path to good out­comes.”

Re­cently, three Or­a­cle em­ploy­ees launched a pe­ti­tion that now has more than 800 sig­na­tures, urg­ing the tech gi­ant, which has not put out a pub­lic state­ment on the en­try ban, to sign the le­gal brief.

One rea­son: They want to work at a com­pany they be­lieve re­flects their views.

“When I walk around and in­tro­duce my­self as some­one who works at Or­a­cle, there are as­sump­tions that can come back to me,” said Rachel Kane, 29, a sales rep­re­sen­ta­tive who started the pe­ti­tion with col­leagues Irene Scher and Lara Beers. They all re­cently joined the com­pany. With fewer bound­aries be­tween work and home life, Kane said, “it’s nice to have your life and your be­liefs, and your moral com­pass, be aligned.”

An Or­a­cle spokesper­son de­clined to com­ment on the pe­ti­tion.

Tech com­pa­nies, in par­tic­u­lar, are con­cerned about the Trump or­der’s di­rect im­pact on cur­rent em­ploy­ees, and also by po­ten­tial im­mi­gra­tion ac­tions that could limit the visas the in­dus­try de­pends on to pop­u­late its ranks of en­gi­neers.

The com­pa­nies may also want to prove to con­sumers and startup-minded re­cruits that they’re not los­ing the moral high ground now that they’ve be­come ad­ver­tis­ing jug­ger­nauts and have faced with­er­ing pri­vacy chal­lenges of their own.

The more tech gi­ants “are per­ceived to be like the rest of cor­po­rate Amer­ica, the more risk to them,” Koehn said.

CEOs who ad­vo­cate can also risk be­ing seen by in­vestors as dis­tracted or be­com­ing over­ex­posed, low­er­ing the im­pact of their mes­sage, Chat­terji said. CEOs need to choose the “is­sues you’re au­then­ti­cally con­nected to, so you might have more in­flu­ence,” he said. “Peo­ple will take it much more se­ri­ously.”

In his re­marks in Glas­gow, Cook said Ap­ple weighs in on is­sues where it feels it has knowl­edge or holds a strong point of view, such as the en­vi­ron­ment and hu­man rights. When it does, he said, “we will stand up, even when our voice shakes.”

Con­sumers re­main skep­ti­cal

Mean­while, many con­sumers re­main skep­ti­cal about the rea­sons be­hind CEOs’ ac­tivism. In a sur­vey of 1,027 U.S. adults by the com­mu­ni­ca­tions firm We­ber Shand­wick last year, re­spon­dents named me­dia at­ten­tion as the top rea­son they thought CEOs spoke out. Just 14 per­cent thought they were get­ting more po­lit­i­cal be­cause they wanted to lever­age their in­flu­ence for the broader good, and only 11 per­cent thought it was to “speak up on be­half of the com­pany’s em­ploy­ees and cus­tomers.

Yet the re­port, ti­tled “The Dawn of CEO Ac­tivism,” also found that peo­ple saw CEOs more fa­vor­ably if they took a pub­lic stance on cur­rent is­sues — as long as the topic was re­lated to the com­pany’s busi­ness. (If it wasn’t, the num­bers re­versed.) A newly re­leased sur­vey from We­ber Shand­wick also found that 41 per­cent of global con­sumers and 46 per­cent of global ex­ec­u­tives said com­pa­nies should ex­press their opin­ions or take ac­tions on is­sues; 20 per­cent of con­sumers and 32 per­cent of ex­ec­u­tives said they should not.

And re­search by Chat­terji and Michael Tof­fel at Har­vard Busi­ness School found that CEO ac­tivism can help shape pub­lic opin­ion on con­tro­ver­sial so­cial is­sues and in­crease in­ter­est in buy­ing by con­sumers who fa­vor the com­pany’s point of view.

Com­pa­nies have been fun­nel­ing mil­lions of dol­lars into di­ver­sity and in­clu­sion pro­grams as re­search un­der­scores the busi­ness case for hav­ing more di­verse teams, which im­prove de­ci­sion­mak­ing and bet­ter rep­re­sent a com­pany’s cus­tomers. If com­pa­nies ig­nore po­lit­i­cal ac­tions that hurt cer­tain groups, they un­der­mine the cred­i­bil­ity of those pro­grams, mak­ing them ring hol­low.

The di­ver­sity com­mit­ment

“If those val­ues have any mean­ing, then they need to stand up for them,” said Craig Smith, chair in ethics and so­cial re­spon­si­bil­ity at Insead Busi­ness School in France. “Some­thing that started out largely eco­nomic is not just the eco­nom­ics any­more. It’s be­come part of the iden­tity of the or­ga­ni­za­tion.”

That di­ver­sity com­mit­ment was tested as same-sex mar­riage fights made their way through the courts and state-level laws viewed by crit­ics as dis­crim­i­na­tory to­ward LGBT groups sprang up in state af­ter state.

Com­pa­nies had an in­cen­tive to speak out to avoid the patch­work of state laws that can com­pli­cate their op­er­a­tions and limit em­ployee mo­bil­ity be­tween states. But do­ing so also helped them ap­pear more ac­count­able to the di­ver­sity and in­clu­sion pro­grams they were tout­ing in­ter­nally, and dozens signed on against laws in such states as Ari­zona, Ge­or­gia, In­di­ana and North Carolina. In the lat­ter state, more than 200 com­pa­nies signed a let­ter to op­pose what was known as the state’s “bath­room bill.”

Com­pa­nies “got their feet wet around LGBTQ is­sues,” said Beck Bai­ley, deputy di­rec­tor of em­ployee en­gage­ment for the ad­vo­cacy group Hu­man Rights Cam­paign.

“I think once they got to that place, they felt that same in­ter­nal and ex­ter­nal pres­sure of liv­ing up to their stated val­ues” when it came to other groups, Bai­ley said. “In this day and age, there’s more, ‘Okay, then what are you go­ing to do about it?’ ”

That’s ex­actly the sen­ti­ment Tay­lor says many tech work­ers have been push­ing their em­ploy­ers to uphold in the weeks since Trump took of­fice. Tech work­ers, he said, are lucky to have the choice of speak­ing out with­out fear­ing for their jobs.

“Most of Amer­ica doesn’t,” Tay­lor said. “So let’s use that power to hold our tech lead­ers to the ideals that they tell us about ev­ery day.

“They tell us they want to change the world. Now’s our chance.”

ISTOCKPHOTO

AN­DREW MIL­LI­GAN/PA WIRE

Ap­ple CEO Tim Cook vis­its a store in Glas­gow, Scot­land. Cook has spo­ken out for pri­vacy rights and against Pres­i­dent Trump’s travel ban.

STEPHEN BRAS­HEAR/GETTY IM­AGES

Star­bucks chief ex­ec­u­tive Howard Schultz says his com­pany will hire 10,000 refugees in 75 coun­tries over five years.

JUSTIN SUL­LI­VAN/GETTY IM­AGES

Marc Be­nioff, head of the cloud com­put­ing com­pany Sales­force, has ad­vo­cated equal pay for women and LGBT rights.

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