Today, whether it’s because of social media or a very intense political climate, consumers are making purchasing decisions—and aligning with brands—based on how CEOs act, what they say they believe, and even with whom they associate.
In short, corporate leadership is under the microscope. Every comment that CEOs or other top brass make in an interview, every tweet they send, every cause they choose to support (or not) can have implications on the company’s bottom line. As illustrated by the #DeleteUber campaign that went viral within a few hours of Uber CEO Travis Kalanick maintaining a “business as usual” policy in response to President Trump’s attempted travel ban, consumers are making their expectations known through social media campaigns and boycotts.
And those expectations are high!
Let’s take a look at the effects of some CEO behaviors on brand perception, and why it’s so important to send purposeful messages that define your company’s mission:
Keep your head above political waters. When a CEO puts himself or herself in the public eye, they can become a celebrity spokesperson of sorts, and are therefore subject to scrutiny. This scrutiny, and the related pressure, often extends to their personal lives or political views and affiliations. That pressure was likely the cause of Uber’s Kalanick quitting President Trump’s economic advisory council a few days after his controversy erupted, for example.
What’s more, even when organizations want to stay out of politics, consumers still expect the clarification of brand values. And, the consumer will choose a side. A Weber Shandwick and KRC Research survey found that 46 percent of executives from large businesses prefer that companies speak out on issues such as climate change, gun control, immigration, and LGBT rights, while only 20 percent of global consumers said they were not in favor of companies speaking out on controversial issues.
There’s something to be said for standing one’s ground, as Tesla and SpaceX CEO Elon Musk has done thus far by remaining on the President’s Council. Musk recently tweeted, “Activists should be pushing for more moderates to advise the President, not fewer. How could having only extremists advise him possibly be good?” Similarly, UK brand John Lewis decided not to withdraw advertising from certain publications, citing that doing so would be inconsistent with their democratic principles of free speech and remaining apolitical.
The lesson: Accept the fact that people will draw conclusions about a company based on the actions (or inactions) of its leadership team. Be prepared to clarify your stance, and do so in a way that best represents your company values while addressing customer concerns.
Uphold your commitment to social responsibility. Marc Benioff, CEO of the cloud computing company Salesforce, is very vocal about his firm’s philanthropic model—it donates to charity 1 percent of its equity, 1 percent of its employee time, and 1 percent of products and services. No one would argue with that approach. However, Benioff has also been outspoken about LGBT and transgender rights, which risks alienating conservative partners, a risk he felt was worth taking.
Similarly, reports that Starbucks’ brand perception took a hit after CEO Howard Schulz announced plans to hire 10,000 refugees in response to Donald Trump’s executive order didn’t deter the coffee company. Starbucks has stood firm in its convictions, something many of its loyal customers admire.
The lesson: The causes you support should align with your company’s mission, and ideally, the values of your target market. Highlight the positive outcomes, and be transparent about why a cause is important to the company when publicizing your community outreach efforts
Join the right conversations. It makes sense that Mark Zuckerberg, CEO of Facebook, would issue a statement regarding the role that his platform (and other social media outlets) played in disseminating so-called “fake news” that might have influenced the election cycle. By announcing new initiatives to help fact-check news stories, as well as starting a journalism project, he accepted responsibility and has promised improvements to his enormous user base.
On the other hand, when GrubHub CEO Matt Maloney called out employees who voted for Trump and suggested they resign, the food delivery company faced backlash and a drop in stock price. He backtracked the next day in a company press release that stated: “GrubHub welcomes and accepts employees with all political beliefs, no matter who they voted for in this or any election. We do not discriminate on the basis of someone’s principles, or political or other beliefs.”
The lesson: Make sure that you’re clearly representing your organization, and not just trying to make waves or score publicity when entering into a controversial conversation,
As these examples have shown, the actions of a CEO can have consequences—both positive and negative—for a company. Making sure the right message gets through is more important than ever.
A version of this was first posted on Huffingtonpost.com