Business Takes the Lead

This week, American business stood up and said: “Enough.” CEOs found their voices and spoke out on behalf of their employees and customers on such basic American values as tolerance and diversity. This is exactly what we had hoped for in our essay for the 2017 Edelman Trust Barometer, noting that business was the last retaining wall against a tsunami of distrust that had its first huge wave in the Great Recession of 2008-2009, followed by further waves of automation and globalization against weakened institutions.

Why did the CEOs involved in President Trump’s advisory councils take a stand in the wake of disturbing events in Charlottesville, Virginia, and his subsequent comments?

Above all else, actions like the ones taken by CEOs this week should be decisions of conscience. But findings from our recent Trust Barometer and Earned Brand studies point to other forces in play.

First, employees now play a central role in any conversation about a company. We have seen an unprecedented dispersion of authority, such that “a person like you” is now one of the most credible spokespersons on business, along with technical and academic experts. Also, people are more likely to work and stay at companies that share their values and have leaders that will take the risk of advocacy.

Second, there are new expectations of companies and brands alike. Our Earned Brand study shows that two-thirds of consumers expect brands to speak up on social issues relevant to their category. If a brand fails that test, consumers will go elsewhere; if the brand does take action, consumers will have a higher rate of repurchase, stronger loyalty and will defend the brand against critics.

Yesterday, Edelman briefed our clients on findings of an overnight poll we conducted of 1000 Americans. The survey reinforces the decision by CEOs to move from hope to action. Here are three important data points that can be used by corporate communications directors with their CEOs:

  • Fifty-two percent of Americans expect CEOs to speak out against the President’s policies and views, versus 25 percent who would prefer CEOs to stay quiet and out of politics.
  • Thirty-eight percent of Americans say their trust in a company would decrease if the CEO continued to work with the Trump Administration, versus 25 percent saying that trust would increase by working with the Administration.
  • Americans are split on whether companies should cut their ties to the Administration, with 34 percent saying companies should continue to be involved and 31 percent saying that companies should end any involvement.

The political fault lines are clear. Eight-three percent of Hilary Clinton voters say that CEOs must speak out against the President’s policies, while only 18 percent of Trump voters agree. There are also distinct racial and ethnic blocs, with 53 percent of African Americans and 46 percent of Hispanics saying their trust in a company would decrease if the company’s CEO continued to work with the Administration, versus only 35 percent of whites.

Here are my recommendations on the best way forward for CEOs.

There will continue to be important issues that require close cooperation of public and private sector. There will be no substitute for direct engagement with the White House and regulatory bodies on trade, environment, immigration, privacy/security and taxes. But CEOs must be visible advocates for tolerance and other social issues that affect their employees and communities.

CEOs should recognize and fund a transition from sole reliance on mainstream media toward a more comprehensive communications approach that calls for every company to become its own media company. Mainstream media has been abandoned by many, for ideological reasons mostly, and brands need to directly engage with the end-user of information and offer opportunities for consumer- and employee-generated content.

CEOs should insist on an immediate discussion of potential issues related to government and society and have a clear decision-making protocol that can be implemented on demand. Speed is of the essence.

Most important of all, re-order your priorities so that employees and consumers become your most important stakeholders. Engagement and integrity are the two most fundamental aspects of building trust; lead from the front by evolving your company strategy, then live your values every day.

Richard Edelman is president and CEO.