One of my colleagues asked the other day, “Has running a business always been this complex?” My initial instinct was to model resilience — of course, there have always been challenges, both internal and exogenous. However, the only accurate response was simply: no.
Recent risk reports validate this fact. For example, OnSolve measured an astonishing increase in threats facing businesses on a global basis over the past two years: shooting-related risks are up 193%; transportation-related risks are up 143%; national security threats are up 48%; extreme weather events are up 47%; and, sadly, the list goes on.
CEOs, Chief Communications Officers, and Chief Marketing Officers experience this complexity on an increasingly intense basis. Premier brands have been in the hotseat this year for their responses — in particular, the timeliness (or lack thereof) — to issues ranging from marriage equality to Russia’s invasion of Ukraine, among other matters. Many companies have kept out of the headlines, although their angst about the prospective next issue is palpable.
Why has the business landscape gotten so much more complicated in recent years?
There is a new set of expectations for business. Topics that once seemed to be the responsibility of government or perhaps too personal for the workplace — for example, geopolitics or access to reproductive rights — have not been adequately addressed by traditional institutions. This fuels even greater expectations for business to fill the void where others have failed.
Our most recent study of Trust At Work (September 2022) shows that “My Employer” is the single most trusted institution globally, with a record 21-point trust advantage over other institutions. Seven in 10 respondents want their job to create social impact; they want their employers to take a stand on human rights (71%), consumer privacy (67%), racial justice (66%) and climate change (63%).
In fact, employees are more comfortable discussing societal issues with co-workers than neighbors because the workplace ranks just behind friends and family as their most important community.
Alan Murray, CEO of Fortune, and author of Tomorrow’s Capitalist: My Search for the Soul of Business, offered some thoughts in a recent interview: “To be successful, companies need to pay attention to their returns and shareholders but also to how they’re serving multiple stake-holders. This includes their employees, customers, the communities they live in, and the planet they inhabit.”
Of course, stakeholder capitalism is complicated by punitive politics and anti-environmental, social and governance movements. A corporate initiative that might be heralded in one state, could be taken to task in another. Layer on top of this the reality that many executives are exhausted by the sheer volume of issues and opinions to navigate, in addition to a complex economic environment.
How can business better navigate such broad stakeholder expectations? How can they identify issues that matter and get ahead of future curveballs?
First, it’s not possible for a company to opine on every issue. And, when they do, it must be backed by action. This can range in intensity from creating safe forums for dialogue to engaging with legislators and launching industry-leading action. However, acknowledging an issue is different from providing access to healthcare or giving a day off to vote.
Second, it’s critical for companies to evolve decision-making and have a clear framework to do so in today’s environment. These issues can be polarizing and deeply personal; they require new ways of working and listening, including convening diverse perspectives and drawing on data in order to facilitate healthy debate.
At Edelman, we developed a framework — a societal issues navigator — to help clients determine when they should speak out. While we customize this to every organization’s unique context, our baseline is grounded in ensuring consistent, guiding principles that consider: 1) strategic and business impact; 2) alignment with their organizational purpose; 3) expectation of key stakeholders; and 4) credibility and authenticity.
Finally, organizations should aspire to anticipate and assess issues proactively. While challenging, it is a healthy sign if your team feels increased pressure from heightened stakes around societal issues; harness this urgency. Taking action can be an extremely valuable way to build trust with your stakeholders, especially when it aligns with your organization’s purpose.