How CEOs use thought leadership for social impact
Research shows that executive thought leadership can boost corporate revenue – but can it do that while also engaging social issues? I had a chance to explore that question recently with Victoria Baxter, Executive Vice President of the Social Impact practice at Weber Shandwick, which fields an annual research report on the nature and state of CEO activism. Please watch the brief, introductory video, then read the full interview that follows.
Chuck Kent: First of all, how do you define social impact, in terms of what you’re doing for what you refer to as purpose-driven clients.
Victoria Baxter: We work with purpose driven-brands and on social issues. Companies ranging from Under Armour, to Unilever, to many different kinds of companies across the globe, as well as nonprofits, foundations, and some government agencies, like USAID. And we do a lot of work with the United Nations (UN).
And when we define social impact, we look to standards like the UN’s Sustainable Development Goals (SDG) as we help clients address problems that could include anything from access to water, sustainability, management of resources, good education, the empowerment of women, a real range of issues.
CK: But is the definition more specific than, frankly, what’s become a fairly vague notion of corporate or organizational purpose? Is it really tied to sustainability and specific goals?
VB: It is. We work with companies that are looking to understand how they can grow sustainably, while also having a positive social and environmental impact. When we started the practice about ten-plus years ago there was not as much activity in the space as there is now. It’s really been an evolution in the last ten years – pretty amazing, especially in the last couple of years.
CK: I want to get to the role of the CEOs and C-Suite, in particular. But first – one of your colleagues wrote an article recently questioning the power of purpose, based on a conference she had attended. One of the things that popped out of that article, to me, was the question of whether or not organizations can operate with discreet functions for purpose and social impact, or whether, rather than operating as an initiative, purpose now must be an embedded trait organization-wide.
But is this really a question anymore? Is it possible to pull off anything but good-washing if you don’t have purpose embedded throughout an organization at this point?
When purpose is a bolt-on it runs the risk of becoming irrelevant to the business
VB: When purpose is a bolt-on – something that’s nice to have but not a need to have – it runs the risk of becoming quite irrelevant to the business itself. When we talk about purpose it really is that sense of attaining sustainable business growth, while also having positive social impact. They have to be twinned together.
To do that, ask yourself where can you, as a business, credibly lead on an issue? Where can you contribute? Be very careful about your selection of focus areas, and then be completely authentic in the way that you deliver on them – and be thoughtful about the communities and partners you may be working with.
CK: You, as an organization, have been pretty thoughtful about the CEO end, in terms of investing in research about CEO activism for the past three or four years. What does it mean now, and what do you think it’s going to mean in a few years to be an activist CEO?
VB: We started the research in 2016, led by our Chief Reputation Officer, Leslie Gaines-Ross. She started with a question: Should CEOs be speaking out on particular issues? Then an election happened. It was a really crazy year, where companies had to navigate an onslaught of issues.
And there was this growing expectation that CEOs had to have a point of view on anything from whether an NFL player should be kneeling (even though they may not be in the sports business), to bathroom bills in North Carolina, to whether or not we should stay in the Paris Climate Accords.
We saw a trend grow – the expectation that CEOs will speak out
We tracked all of them, to understand how companies responded. Did they take to Twitter? Did they take themselves off of presidential committees that they might have been on, advisory committees? How did they engage their employees? And we saw a trend grow – the expectation that CEOs will speak out – and we anticipate that trend will continue to grow.
So, we delved into different aspects of it, looking to understand if there are particular issues that matter. And one of the things that we found is that it’s best to respond to something that’s close to your business – issues that are further away from your business are a little bit more dangerous for companies to take on.
CK: In other words, you’re a little less credible, as a CEO or a company, the farther away you get from your core business?
VB: Yes. You just never know how your consumer base and your employees feel about the same issues. Sticking a little bit closer to home is always a better thing. But the idea that CEOs are not going to be speaking out on issues also needs to be considered simply as the norm of this day, that this is what’s going be expected of them.
CK: You talk in terms of speaking out, but you mention employees too. What’s the CEO’s role in “speaking in,” as it were.
VB: It’s really important. One of the things that we have found, and I think a lot of companies have found, too, is that you need to understand what your employees are thinking about. There were some cases in which companies were participating in presidential advisory committees, much in the same way that they would have at any other time – but their employees started to look at that and say, “Why were you sitting at that table?” “Why were you participating in that?”
Employees are watching what you’re doing, and they care
It was surprising, for a lot of companies that there was such a vocal backlash against some of those activities. And obviously everyone cites the Google walkout as a huge example of a wake-up call, in a lot of ways, for the industry. Employees are watching what you’re doing, they care, and they want to make sure that you’re doing the right thing.
CK: It’s quite important for the CEO, then, to communicate well and often.
VB: Exactly. They need to keep the pulse of their employees.
CK: Do you think it’s almost a prerequisite at this point, for a CEO to be an activist? To be a thought leader on social issues? I mean, CEOs aren’t just there to speak out – they’re there to drive growth, and presumably thought leadership helps do that. Is social activism a critical, inherent component for being a thought leader now?
It’s about being prepared to have a point of view on a wide range of issues
VB: It’s a growing, important area for CEOs. The expectation that you’re going to go into any setting and not be asked about any number of issues… you just can’t think that that’s the way it’s going be anymore. So now it’s about being prepared to have a point of view on a wide range of issues, and not be caught on the back foot. That isn’t to say that every CEO has to become Marc Benioff of Salesforce, or what we saw with Howard Schultz when he was in charge of Starbucks.
You have to do what’s authentic for the CEO and what the company thinks is right. So, they have to make choices about how far ahead you want to go on any number of issues. But it would be an ill-advised CEO who is not be prepared to answer some of these questions.
CK: So, it’s not necessarily that you have to take a lead on social issues, but you have to be prepared to respond.
VB: And the other thing is purpose, and also culture and values.
I was reading an article just today, about Marc Benioff and the start-ups that Salesforce is acquiring. They’ve acquired something like 50 in the last five years. They used to look at those companies, and they would look at them for the products that they could bring to Salesforce. That was the criteria.
Now, increasingly, he’s finding himself looking at the culture of the company, the values of the company, asking if the company is paying their employees equitably. Is there a culture that is responsive and respectful to all elements of the employee base? Culture wasn’t something that he was looking at five years ago, so I think it’s a bigger set of issues and a broader worldview that a CEO has to deal with now.
CK: What do you find to be the most common mistakes or misunderstandings that CEOs have about…
VB: Taking a stand?
CK: Yes, taking a stand.
Companies need to make sure that their own house is in order
VB: It’s extremely important to root your purpose in your values. Much as we were saying before, when you are coming out on an issue, it should be an issue that feels authentic to your company. It should feel aligned with the values that you’ve always held, or the values that you want to hold as a company.
A lot of companies also need to make sure, if they are going to speak out on an issue, that their own house is in order. That they don’t have products contradicting what they’re saying, that their practices don’t contradict the statements they’re making. It’s important to look across the company before going out proactively on an issue, to make sure that you’re good on that particular issue.
CK: To avoid all the activists on social media that are going come after you and slap you down?
VB: Exactly. And, you know, social media is … it’s an accelerant for all of these conversations. People are savvy, they spend a lot of time understanding where companies are, and the CEO is the most visible face of a company. They want to know what the company’s policies are. And they will … We’ve done a lot of research on this as well, about “buycotting” instead of boycotting, where you proactively buy more from a company that you feel aligns with your values. And you may not be buying at all from a company that you feel is not aligned with you.
CK: So, there’s an upside then.
VB: Yes, there is an upside.
CK: Your studies show a generational split in terms of how positively consumers view social activism on the part of companies and executives. Millennials are much more positively attuned to CEO activism; Gen X-ers and Boomers, not so much.
CK: Do you think that Gen Zs will continue to expand this acceptance, even expectation, of corporate activism, or is this a millennial bump?
“The Change Generation” is much more likely to value purpose and a sense of mission
VB: No, all of our studies, and the studies that we’re watching as well, are showing that this is a continuing trend. This generation – I’ve heard so many different names being used for them, and the one most recently was “The Change Generation” – is much more likely to value purpose and a sense of mission than necessarily money and earning an income.
Which is interesting. Everything that we hear is that they prize authenticity. And that’s a really important thing for companies to understand, is that it cannot be marketing spin. It has to be truly authentic. And they want to understand the people behind the companies. That’s why CEO activism, I always expect, would be more accepted among this generation – and more demanded. They want to know who’s running this company, and what you believe in.
CK: Trust levels have gone up and down over the years. Do you think that CEOs are credible thought leaders, and social issue leaders, for consumers now?
VB: I think they are. The studies that I’ve seen have shown, for the first time in a long time, that trust in the private sector has gone up.
There’s a real sense that change can be led by the private sector
And that’s pretty meaningful. We’ve seen that in the action of companies are taking on climate change. While the government pulled out of the Paris Climate Accord, many companies are still continuing with their commitments to track against what would have been their obligations under the Accord. And they’re making progress. So, there’s a real sense that there’s a lot of change that can happen and be led by the private sector.
And, you know, there’s a healthy amount of skepticism, too. Consumers are smart, they look for the full picture. It’s not a blind trust – you really have to earn it.
CK: Do you have a favorite example of positive CEO activism?
VB: I love what Patagonia is doing. I just think that…
CK: Oh, everybody loves them, come on.
VB: I know, that’s an easy one. But I really do think that it’s such a great example of taking on a set of issues that are core to their business. The protection of the natural world and parks, the places where their consumers go, is the right place for them to be playing.
CK: As when they gave back their $10 million tax cut.
VB: Yes. I’m interested in that particular issue, because I think there is a growing sense of advocacy around the tax cuts and how they have been used. There have been a lot of companies, such as Mastercard, using their tax cuts to create programs on economic equality. There’s been a bunch of companies who have done really good things with it.
CK: Does it need to activism first, then the sharing of your thoughts about that issue? What’s the correct order?
VB: It’s nice to be able to point to something that you did and the impact that it had.
CK: You can’t just like step out and pontificate?
VB: Well, I think there is some space to ask questions and get feedback on what the role of your industry or company could be.
CEOs don’t like to go out unprepared, though. So, it’s nice to have a track record and some demonstration of what you yourself are doing. Otherwise, the inevitable question would be, why are you speaking about this when you don’t have a policy or program in place?
CK: Before we conclude – what key point about social impact have I not asked that people really need to know?
One thing that I think is very interesting is the rise of investors looking at social impact
VB: Well, one thing that I think is very interesting – and it’s been something that’s been going on in the past two years particularly – is the rise of investors looking at social impact as a reason to invest in a company…or not.
When I started working with Weber Shandwick on the social impact team many years ago, we were often still making the case to the C-Suite that this will be important for business, this will be important for employees. And we didn’t always have the data that we have today.
Now what has become very interesting, starting about a year ago now, was Larry Fink’s letter, from BlackRock [the global investment management company], saying that he was asking the company to look at environmental, social, and governance issues (ESG), as a factor in making investment decisions. And that has really changed the game for a lot of companies in the investor class…
Companies that do well on ESG factors outperform the stock market
CK: It got people’s attention.
VB: Yes, it does get your attention.
But it’s become very interesting because the data is there. Companies that do well on ESG factors outperform the stock market. They have more loyal employees, they have less turnover, they have governance structures that anticipate challenges and mitigate them before they actually become the front-page story of a company.
It is, in many ways, simply common sense – and very gratifying, having worked in this field for a very long time. But the rise of investors in pushing for this is going to be truly catalytic.
CK: So, seeking the common good can be uncommonly good for business?
VB: It can be. It definitely can be.
Portions of this interview appeared previously in Sustainable Brands.
About the Author Chuck Kent, the Chief Conversation Officer at Lead the Conversation, works with executives to help them more easily create authentic, compelling thought leadership content – and to lead industry conversations. He is a writer, brand strategist, content creator and expert interviewer. Chuck is also a Contributing Editor for Branding Magazine, for which he created the monthly Branding Roundtable.
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