Lars Voedisch, Founder and Managing Director of PRecious Communications was featured in the print and online section of Business Times’ “Views from the Top” on October 21, 2019, titled “Businesses can be agents of social change.” The question was – should businesses take a stand on socio-political matters? To what extent should they speak out on issues that are important to society?
Here is Lars’ comment as featured in The Business Times’ Views from the Top
More than ever, customers want to align with brands that reflect their values and beliefs.
Traditionally, brands have shown restraint and chose not to engage with issues that did not directly impact their businesses. Especially in 2019 and beyond, brands will no longer be able to take the path of least resistance. We are witnessing a growing number of organisations stop being apolitical. They have become comfortable with taking a stand on hot-button issues and relate to their customers’ core personal values and beliefs.
While doing so may alienate a section of their client base, it fosters brand loyalty with those who bought those ideas and converts new customers as advocates. With issues such as climate change, data privacy and social stratification taking the spotlight, we expect more brands to engage with their community on potentially controversial topics.
Why Are We Talking About Can Businesses be Agents of Social Change?
The NBA, one of the most popular sports leagues in the world, is mired in a multi-billion dollar backlash in China (where basketball has a huge following) following a tweet on Hong Kong.
Response to the (since-deleted) Oct 4 tweet of support for the Hong Kong protesters by the general manager of the Houston Rockets was swift, coming from not only the PRC consulate in Houston but also Chinese businesses. Sponsors began to cut ties with both the Rockets and the league as a whole.
Among others, Tencent (the NBA’s exclusive digital partner in China) announced it will suspend business links with the Rockets; likewise sportswear brands Li-Ning and Anta said they were ditching their deals with NBA. Chinese state television CCTV said it would no longer air the Rockets’ pre-season games in China.
NBA China, a separate business arm of the NBA, has been valued at US$5 billion.
Meanwhile, voicing “deep concern” in a letter to the NBA commissioner, members of the US Congress said it was “outrageous that the NBA has caved to Chinese government demands for contrition” and called on the league to suspend all ties with China until “government-controlled” broadcasters and commercial sponsors end their boycott of NBA and the “selective treatment of the Houston Rockets”.
The NBA isn’t the only business that’s been dragged into crisis over the unrest in Hong Kong. In August, Cathay Pacific was also hit, after Beijing demanded that it suspend staff involved in, or who support, the HK protests.
But perhaps nowhere has the matter of corporate involvement in socio-political issues come to the fore more, of late than in America, where CEOs have been speaking up, for instance urging the White House to remain in the Paris climate accord, or criticising dysfunction in Washington or defending journalism amid accusations of “fake news”. Nike jumped into a culture war when it featured a football player who protested police brutality against African Americans — and apparently, the controversial ad featuring Colin Kaepernick has had a positive effect on sales and earnings.
A poll in the US by Sprout Social found that two-thirds of consumers say it’s important for brands to take public stands on social and political issues, while a 2017 Edelman survey agreed that the majority of millennials (60%) are “belief-driven buyers”.
To be sure, some consumers believe corporations and CEOs should stick to running their businesses rather than wade into a political minefield.