CEOs in the era of illicit activism

We now live in an era where mobilizing public opinion – through social media, consumer boycotts or street protests – is a weapon used to pressure companies and their leaders to change their behaviour.

Such behavior is not new. What is new is that political parties and even governments are adopting activist bases. The current US administration is a clear example of this, as former activists now hold formal positions within the public bureaucracy, and the president applies his executive resources to align companies with his policies.

As a result of this seismic shift, business leaders must prepare for an increasingly polarized world, where neutrality is often no longer an option and where the penalties for betting wrong are both economic and personal.

The first step for managers is to understand activist types, their motivations, and their tactics. Sometimes this comes from a single high-ranking individual. Investor For example, Carl Icahn tried to appoint members to McDonald’s board to change the way its suppliers treated pregnant pigs — an issue raised by his daughter, an animal rights advocate. Other activists operate on ideological grounds. Bud Light faced backlash from a large portion of its traditional customer base after partnering with a transgender influencer, a clash that cost it its market lead.

Activists can target companies for several reasons. Wealthy private sector companies are prime targets because their resources make them inclined to compromise to avoid public fights. Companies that champion social responsibility are often targeted for their hypocrisy. Minor discrepancies between their stated values ​​and actual practices can lead to accusations Nike Experienced regarding alleged labor exploitation.

Activists may also target companies that share their values, as these organizations are more likely to compromise. Corporations can also be attacked for purely political gain, as we saw against then-Republican candidate Ron DeSantis Disney On LGBTQ rights.

Additionally, targeting influential companies can create a ripple effect that affects the rest of the sector. This is one of the favorite tactics of the President of the United States, and is applied to a variety of fields, from the legal sector to high technology. He knows, as do sociologists of organizations, that what companies and individuals fear most is making mistakes that leave them alone. Taking a risk, or taking a political stance, is always better when you’re in good company.

Such “groupthink” may explain the large number of high-tech leaders who attended the inauguration, joining forces to pledge millions to support presidential policies at a recent reception at the White House. It also explains the rush by big companies to loosen previously strong DEI obligations to better align with Trump’s anti-woke agenda.

Despite these shifts, executives are not completely powerless:

1. Create a team to handle these situations and make sure there are clear protocols in place so you know what steps to take before you need to take them.
2. Don’t leave the management of reputational conflict to lawyers or economists. Social and political conflicts are won because of perceived legitimacy, and neither legal nor financial arguments guarantee this. Claudine Jay, the former president of Harvard University, lost her job after a disastrous appearance in the US Senate when her answer was on legal, not political, grounds.
3. Cultivate strong friends. Building alliances before a crisis or conflict arises can actually help deter attacks, or ensure they are diverted to easier targets.
4. Most disputes are decided by the court of public opinion. Make sure you have a reputation for transparency with journalists. They will end up reporting the truth no matter the circumstances, but you may buy some time to gather the facts.
5. Find out what the real problem is (often not what it seems), which actors matter, what information is relevant, and what resources you need.
6. Try to appeal to the more moderate activist so that the more extreme people find themselves isolated. For example, companies often hire activists to lead newly established DEI units. However, many of them often quit, believing that it is just a process of “window dressing”.
7. Never lie. Laurent Freixas, CEO of Nestlé, was not prepared to report serious personal errors to the board and lost his job. Complete transparency is the norm.
8. Victor Hugo, author of Les Misérables, said that there is nothing more powerful than an idea whose time has come. There are “moments” that are irresistible. We don’t know whether Jimmy Kimmel’s late-night show was temporarily canceled out of fear, panic, or a cautious retreat in a moment of intense emotion, but it illustrates the old adage that “it is better to bend than to break.”

These tactics aim to focus on a short-term response to specific crises, but this should not deviate from the point that all businesses have a long-term obligation to act ethically and sustainably – and indeed activism and campaigners play a vital role in calling out organizations when they fail to do so. Conflicts with social and political activists are often public, dramatic, and occur quickly. Everything is used as a weapon and carries with it great risks to the company and personal reputation. Because these conflicts are highly emotional, they often provoke impulsive and erroneous reactions. Keeping a cool head is essential. The only way to ensure a thoughtful response and a positive outcome for you and your company is through preparation: having clear plans, established protocols, and a team of experts trained and ready to act.

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