“There is not one single lane on the highway of change; what is important is that companies find the lane that fits their unique position in the marketplace.”
—Lindsay Singleton, ROKK Solutions
Over the last few weeks, the media coverage of the COVID crisis has subsided to make room for conversations around a much deeper one: racial inequality. As protests shake cities across America, companies of all sizes and industries are joining the conversation, and in some instances, even acting upon their beliefs.
While social issue stances from businesses are increasingly the norm, the promotions folders of email inboxes are suddenly overflowing with statements from Peloton, AirBnB, Nike, and many more. As companies consider their response to the latest chapter of the slow-burning racial inequality crisis, a few categories of activations have arisen. Among these – statements of solidarity, donations and competitive advantage activations – pros and cons have also emerged. Looking at these three categories, trends in consumer and investor responses are also emerging. Here is what we’re seeing and how companies can effectively communicate through a social good lens in a moment of crisis.
Statements of solidarity
In the last several days, tech companies in particular have made highly visible statements in support of the black community and racial equality. On their homepages, Google wrote, “We stand in support of racial equality, and all those who search for it,” YouTube added a video titled “Stand Against Racial Injustice,” and Twitter changed its logo to a black bird, as well as provided information on protests around the country. For its part, Nike turned its logo upside down with a thoughtful “For Once, Don’t Do It” video that was poignant and attention-grabbing for its simplicity.
But the companies using their platforms to put out statements may have been surprised at the response of many consumers, which, instead of praise or likes, has been a resounding, “open your purse.” While companies have been commended in the past for taking a stand via advertising, public statements or social media engagement, the current environment is highlighting to industry that people simply expect more from the brands they patronize. The message to business leaders, at least when it comes to social injustice, is becoming clearer everyday: to remain silent is to be complicit, but actions speak louder than words.
Donating to the cause
Facebook seemed to face this exact sentiment as the company reportedly encountered internal criticism for its response to President Trump’s posts on the platform. The employee criticism may have played a role in Mark Zuckerberg’s announcement to donate $10 million to groups working on racial justice. His statement followed similar pledges, including Peloton’s $500,000 donation to the NAACP Legal Defense and Education Fund, and Away’s $700,000 pledge to social justice groups. Startups like these received praise for leading the way with actionable messages and raising the bar for the efforts of other up and coming businesses.
Applying competitive advantage to make change
Further still on the spectrum of corporate social activism were organizations that went beyond a statement or a donation and are instead using their product in service of the cause. SoftBank is a clear example of this concept, launching a $100m fund backing companies led by people of color. My bipartisan public affairs firm, ROKK Solutions, like other consultancies and law firms, committed to pro-bono communications work on behalf of an organization dedicated to racial equality. Because we are small, we have the luxury of working with our entire team to determine which organization we will support.
How should companies navigate the minefield?
So which version of these responses is right for businesses? Well, that depends. In our analysis of stock prices of 20 public companies that weighed in, we found that, on average, their shares went up by about 1.3% overall. Statements of solidarity, the most prevalent form of response, resulted in a 1.34% increase while donations resulted in a 2.3% price increase. So far, SoftBank is the only publicly traded company we could find that took the competitive advantage approach, and its stock price fell by 1.29% as of this writing. This back-of-the-napkin analysis reinforces more scientific findings, which suggest that, no matter what a company does, staying silent is the wrong choice.
The key to getting this right in a way that is both good for consumer/employee loyalty and good for business is authenticity and staying true to brand. There is not one single lane on the highway of change; what is important is that companies find the lane that fits their unique position in the marketplace. So, if quiet action resonates more with an organization’s stakeholders than a flashy media campaign, then let that knowledge drive your strategy. Perhaps a business’ employees are especially engaged in ESG – a townhall to discuss goals, plans and actions is appropriate. What matters is not the words, but the conviction of our follow-through. Ultimately, we each must know our audiences, and as far as businesses have hearts, we must know – and act – on those, too.
Lindsay Singleton is SVP of ROKK Solutions, a bipartisan communications firm. As the firm’s social good practice lead, she advises Fortune 500 companies, nonprofits and trade associations on corporate social responsibility and communications strategies.