Companies embracing social justice have become a new trend recently. Their actions have angered those who don't share the same view of society. Despite the controversy, nearly every public company has made efforts to support, or at least be seen to support, certain political causes. Yet, the question that puzzles many people is “Why?".
If you’re on the right, it seems like every year Corporate America tries harder to push a left-wing political agenda. You also know that a large part of the country, Corporate America's very customers, are against it. So, it’s baffling why anyone who cares about their bottom line would do this unless they had some ulterior motive.
However, they’re doing it precisely BECAUSE they care about their bottom line.
The most important thing for public companies is the need to turn a profit every quarter. If they don’t, their shareholders lose money. If shareholders lose enough money, then company management gets fired. The pressure to be profitable is huge.
Meanwhile, making a wrong move in the political spectrum can be extremely costly. A boycott, or getting trashed on social media, can destroy quarterly profits. However, those two are only temporary and tend to go away as soon as the company apologizes.
The lasting damage comes when a company doesn’t apologize and gets labelled as being “right-wing”. When that happens, and a firm’s brand identity gets associated with a political cause, the financial consequences can be enormous.
Not only do you still get organized boycotts and social media backlash, but the average customer begins to see patronizing your company as a political statement. No longer is it just about buying a product/service but about either condoning or condemning an entire world view.
Surprisingly, this doesn’t work both ways. A company labelled as “left-wing” is generally accepted by those on the right. Most likely, this is because if someone stopped buying from “left-wing” corporations, they would quickly find themselves with nowhere left to shop. Who would’ve thought that would be the case 50 years ago?
Either way, one of the biggest mistakes a company can make from a Public Relations standpoint is to get labeled “right-wing”. No one better illustrates this point than Chick-fil-A.
The company was founded by S. Truett Cathy, a devout Southern Baptist, who believed strongly in philanthropy. As such, all Chick-fil-A locations are closed on Sundays and the company itself donates to many different charities. The whole thing was an accident waiting to happen.
Predictably in 2012, Cathy’s son, also very religious, came out publicly in support of the Christian view of marriage. That, combined with the company’s donations to perceived anti-LGBT charities (The Salvation Army and The Fellowship of Christian Athletes), proved enough to get significant media scrutiny.
Chick-fil-A refused to get drawn into a debate. One of their VPs commented “We are not engaging. Chick-fil-A is about food, and that’s it.”. As far as the company was concerned, they had the same ideals since their founding, and they weren’t going to change that for anyone.
That was a huge mistake. The company faced numerous protests both at their stores and online. They were forced to cancel their expansion into the United Kingdom after protests and a man even attempted a commit a mass shooting in the U.S. as a result of the company's “anti-LGBT” label.
In 2019, after more than seven years and untold financial damage, Chick-fil-A changed their tone and stopped donating to charities considered to be anti-LGBT. Meanwhile, many people still view them as “right-wing” and continue to protest and boycott the company.
They don’t have the same pressure to deliver profits every quarter. The seven years they took to reverse course would never be an option for a public company. Also, any executive team that allowed this level of harm to be done to their company’s brand would be replaced at light speed.
Thus, while it might seem like Corporate America is part of a conspiracy to push social agendas, the reality is that it probably just wants to avoid the financial consequences of appearing to have certain politics.
Can a Public Company Afford to be Labeled “Right-Wing”?