Reducing the Risks of Corporate Activism
Summary.
When companies take a stance on social issues—something more and more businesses are doing these days—they can antagonize large swaths of customers. But there’s a way to decrease the chances that will happen, say Kimberly Whitler and Thomas Barta. Before launching a campaign or making a public statement, executives should analyze two things: how divisive an issue is, and how well a position fits with a firm’s mission and values.In 2018 Nike took a large—and, it believed, calculated—risk by featuring Colin Kaepernick in an ad campaign. When he’d been the quarterback of the 49ers, he’d protested police brutality by kneeling during “The Star-Spangled Banner,” becoming a hero to liberals and a pariah to conservatives. Nike was gambling that an enthusiastic response from liberals would outweigh any backlash from conservatives. Though the ads did lift sales, the reaction from liberals and conservatives was lopsided. By 2021 the number of Democrats who said they used Nike products was up just 2%, while the number of Republicans was down 24%, according to BAV Group. When consumers were asked that same year whether Nike cared about its customers, positive responses were 33% higher among Democrats than they’d been before the campaign—but 55% lower among Republicans.