Opinion: An urgent request to CEOs—please be bigger than this moment
As the US begins to reopen in the face of a global pandemic, an economic disaster and long-gestated and much needed social upheaval, C-suites large and small have been reacting to each crisis incrementally. Offices have been closed and brick and mortar stores quickly brought online.
Companies have been restructured, downsized, right-sized for their new digital footprint, and otherwise reshaped by the moment. Promises have been made to take care of customers and employees, provide a scintilla of hazard pay to front line “essential workers,” and do a better job of bringing long-neglected efforts to treat everyone with dignity, humanity and equality as we rebalance company rolls to become more diverse and inclusive. Check, check, check. All good, sure. But is it enough?
Leaders of most companies have felt like they are stuck inside a pinball machine over the last three months, racing to address wherever the ball last ricocheted. And while black squares on instagram and promises of being better are welcome, they aren’t enough. Reaction to any discrete part of this threefold crisis isn’t enough. It’s time for leaders to step back, take a few days to pause, reflect and develop real clarity about the role of business—their business—and how to realign profit with the immense need for "purpose" at this critical moment in time.
Why purpose? There are two very good reasons:
1. Consumers will come out of this moment demanding more. Sixty-nine percent of adults say that how CEOs react and express themselves on topics such as Black Lives Matter will permanently affect their decision to buy from their company; while 71 percent of consumers believe CEOs are responsible for helping during the pandemic. Responses will be judged over time, not just in the moment.
2. The crisis has made transparent the interconnections of our world. It’s time for CMOs and brands to recognize the damage they have done by advertising on platforms that promote hate speech and inequality. There is a direct line between our ad dollars, the decline of journalism and the rise of hatred and division. Companies may be loathe to act politically, but they must no longer hide behind “both sides” to protect their customer base. The damage being wrought is too great. If the medium is really the message, is this the message you want to send?
If this moment has proven anything, it’s that we are all connected. The health of one individual impacts the health of all of us, so adequate access to health care must be a part of every CEOs responsibility.
Economic inequality cannot be an input: What is the size of my market and how much can I charge? CEOs must recognize that it is an output of the decisions they are making to privilege profits over paying their employees a living wage. Costco, Trader Joes and others have proven that better pay, better training, better benefits, and better jobs are part of a strategy that increases market share and profitability. Now is the time for CEOs to be creating good jobs, not simply cutting back and asking everyone to share the pain through pay cuts.
Finally, CEOs must understand the larger role they play in shaping culture and society. It’s time for all businesses to look at their values and assess whether they can, and should be, a "B corporation." B corporations are still for-profit enterprises, but they are driven simultaneously by profit and purpose.
The B Corp Declaration of Interdependence: We envision a global economy that uses business as a force for good. This objective is to create benefit for all stakeholders, not just shareholders. As B corporations and leaders of this emerging economy, we believe:
• That we must be the change we seek in the world.
• That all business ought to be conducted as if people and place mattered.
• That, through their products, practices and profits, businesses should aspire to do no harm and benefit all.
• To do so requires that we act with the understanding that we are each dependent upon another and, thus, responsible for each other and future generations.
The movement is growing, as are expectations. In the U.S., 50 percent of adults say CEOs should prioritize the needs of their employees first, while 32 percent say customers should be the priority and only 8 percent choose shareholders. Even investors agree: 17 percent of investors say their needs should be the priority, while 44 percent and 33 percent respectively, put employees and customers first.
It is gratifying to see some of our largest global corporations stepping into the chasm with purpose. It is even better to see them making actions that match their statements.
P&G’s The Choice ad exhorts us to "Read. Listen. Donate. Plan. March. Vote. Speak Out. Step in. Step Up." And provides the resources and tools to help people use their privilege to become anti-racist.
Walmart and the Walmart Foundation are committing $100 million to create a new center on racial equity. Not stopping there, Walmart is evaluating its financial and business practices to open access to minority-owned businesses, improving access to affordable healthcare in its health and wellness businesses; strengthening support of equal access to, and committing to increasing recruitment from, historically Black colleges and universities (HBCU); and reviewing and evolving hiring practices to create opportunities for non-violent formerly incarcerated applicants.
The companies that will best meet this moment are the ones that are able to envision the larger world in which they operate and the ripples they can make—both large and small—to help their employees, customers and shareholders live better, richer lives. This requires more than just a reaction to the crisis du jour. It requires a large-scale ongoing declaration of purpose. Imagine where we’d be if our businesses met this moment and used it as a catalyst to reinvent, not just their channels, but their role in the world?