Company’s values put to the test: The rise of employee social?activism

Data shows that a company’s stance in troubled times reveals its values; and employees are taking notice. Here is a strategy and tactics for corporate leaders to respond.

Recent Trump executive orders have tested many institutions’ stated values, and those that remained silent are being met with distrust. The spotlight is being directed at companies and even more so at their workers whose loyalty to their employers can either be reaffirmed or put at risk.

Let’s take the latest corporate response to President Trump’s executive order on immigration limiting travel to the U.S. from seven Muslim-majority countries. Does conventional wisdom that politics shouldn’t enter into the workplace prevail? Or, rather, do actions like the executive order cut deeper than just pure politics — and ultimately compel companies to respond?

The response by ride-hailing competitors Uber and Lyft demonstrates this distrust. The consumer boycott of Uber (#DeleteUber) resulted in over 200,000 accounts being deleted and ultimately led CEO Travis Kalanick to step down from Trump’s economic advisory council. While we can debate the validity and merits of the Uber boycott, the grassroots action of this and others (e.g., Nordstrom dropping Ivanka Trump’s brand, GrabYourWallet, Spendrise) demonstrate that consumers care and are using their buying power to effect change. Further, a recent Clemson and Drexel University study revealed that staying silent on societal issues can negatively impact company performance. 

Dissecting the employee perspective.

A potentially more emboldened stakeholder for the company is the employee whose loyalty now more than ever is being called into question. Employees, particularly in the tech community, have taken similar stances against the Trump immigration ban — some even backed by their employers. Google employees gathered in the thousands across its offices to openly voice concerns over Trump’s executive order. Google CEO Sundar Pichai and co-founder Sergey Brin — both immigrants — actively participated in the rally.

“Immigration and refugee rights, but immigration generally, is in many ways easier for business to tackle because it’s tied to employment. Who is going to argue against employment?” former Google HR executive Laszlo Bock remarked.

While most of corporate America has remained silent, employees are intently observing company responses, or lack thereof, as signals of corporate values. In turn, they’re using their observations to make decisions about their time, talent, and more importantly, their wallets that reveal their stances. A recent open survey* revealed largely mixed sentiments from respondents about their own employer’s response to the immigration ban.

Almost one in five employee respondents indicated that their company’s response led them to question their organization’s values to the extent they felt compelled to change their behavior. This stance could take the form of less enthusiastic recruitment of future employees, increased attrition, or even more vocal dissent. Petitions have also surfaced as a way for employees to signal their displeasure on a larger scale. One notable example is the Never Again pledge, through which nearly 3,000 tech workers publicly committed not to participate in the creation of any government database that would target individuals based on religion, race or national origin. 

While 127 companies signed an amicus brief in a Seattle court stating that the executive order “violates the immigration laws and the Constitution,” countless other companies chose to remain silent. Yet even at these tongue-tied companies, a growing activism is taking hold. It has resulted in very public employee resignations on LinkedIn. Among remaining employees, there’s a growing sentiment urging corporate leaders be explicit about their “morality” and what they will and will not support — this as the administration considers enacting more of Trump’s campaign promises. 

The survey also revealed differences in sentiment by industry, largely reaffirming support of the bold stance that Silicon Valley tech giants took in reiterating their values both internally and publicly when they spoke out against the immigration ban. Leaders from companies across other industries such as Goldman Sachs, Netflix, Microsoft, Expedia, and Amazon have also openly opposed the executive order. Starbucks CEO Howard Schultz vowed to hire 10,000 refugees. Even Ford, whose CEO previously backed Trump initiatives, stated that the policy “goes against our values as a company.”

Employee responses reveal that, although corporate values have been largely consistent, there may be a growing divide between the company’s stance and that of its employees: more than two-thirds of respondents believed that their leader’s response was consistent with their organizational values, yet only half believed that it was consistent with their own personal values. The level of dissatisfaction revealed by the survey suggests that the integrity of organizational values, as represented by the muted response by those in leadership positions, has come under increased scrutiny. 

What makes the response to controversial news difficult?

A corporate executive has a lot of competing interests to think about: 1) its customers who will be observing how the leader responds; 2) its employee base that will most likely represent a wide array of interests and viewpoints, but will be looking at its leaders to reaffirm its corporate values; 3) its competitor set and their response; 4) its shareholders that will care about the impact of a response on earnings; 5) its public sentiments; and obviously in this case, 6) the ramifications of its response on future government policies — all to reconcile in a matter of hours or at best days.

Communicating their response is just as complicated. Leaders need to effectively relay their response internally (to their firm leaders and staff) and externally, balancing taking a decisive position and appealing to a diverse employee and consumer base with differing opinions — all while expressing a human side to put it in context. It’s daunting.

Four ways a corporate leader can formulate a response.

If possible, corporate leaders should contemplate their response ahead of time. Just in time is already too late. No matter the foresight a company may have, they can’t plan for every eventuality — especially President Trump’s Twitter proclamations. However, corporate leaders can do the tough soul-searching ahead of time, so when the time comes they intuitively know how to respond swiftly. We can dissect corporate responses to the immigration ban and have the benefit of hindsight. But for every Google or Goldman, there are countless other corporations that did not have a clear response. And that silence rang loud. 

Do the necessary soul-searching. Corporate leaders must understand (or define) their company’s values. These values can often seem ethereal, but often are rooted in where the company stands on certain issues ranging from ethics (e.g., human rights), environment (e.g., sustainable supply chain), and even social impact (e.g., broader socioeconomic development in local operating communities). The rise of Benefit corporations also show this trend among socially-minded for-profit enterprises. Benefit corporations, which has gained increasing authorization in over 30 U.S. states and the District of Columbia, legally define their goals as generating positive impact on society, workers, the community and the environment in addition to profit. If they don’t know where to start, Deloitte did a recent study of Fortune 500 companies to better understand how companies were driving business growth through their social impact, which may give a view into which archetype a given company may fit best.

It could also raise core philosophical questions. For some, the traditional belief holds that a company’s core mission is to its shareholders and therefore it should act in their best interests — usually measured by quarterly earnings. Others retort arguing that this short-termism view doesn’t holistically take into account its broader stakeholders and can erode longer-term value creation. Whatever camp you may fall in, however, events such as the announcement of Trump’s immigration ban show the complicated relationship that businesses have with their broader stakeholder groups — namely their employees and customers — and the need to both know and live out their values.

Know your employee quotient. Workers are the lifeblood of an organization and they are also the gateway to a company’s end customer and ultimately profit. Therefore, it is important to know what they care about and how it relates to corporate values. For services companies, this is incredibly important. Cauvery Patel, a corporate strategy associate at IBM, remarked that “workplaces have a responsibility to society — to the clients we serve, the employees we hire and the citizens who are impacted by our decisions. IBM’s decision not to actively… condemn this [immigration ban] policy is extremely disturbing.” Other employees like Patel are watching intently and their numbers are growing. With an increased focus on purposeful work, employees want to work for companies where their values are affirmed.

Translate your values to action. We’ve seen a wide range of responses from corporate leaders to the immigration ban. The ones that have been most effective have been rooted in action. From signing briefs or petitions to Uber reserving a fund to help its drivers impacted by the immigration ban or even Lyft pledging $1 million to the American Civil Liberties Union, companies who care are taking a stand for their values. IBM, despite its current criticisms, did take a stand in the 1950s as outlined in the then company president Thomas J. Watson Jr.’s Policy Letter №4, resisting pro-segregation policies in the South — demonstrating how to walk the talk.

Communicate and give space for dialogue. One of the most important actions companies can do is to listen and open up channels for their employees to engage with its leaders. Workers will voice their opinions anyway, so you might as well formalize it. Within the Trump administration, State Department employees created a dissent cable that went viral and garnering over 1,000 signatures in a matter of hours. Periodic surveys to gauge trends and employee sentiments, focus groups, and even advisory committees can be internal channels where employees can voice their concerns in proactive and constructive ways — that is if leaders truly listen. Timothy Ryan, U.S. chairman at PricewaterhouseCoopers LLP, told Bloomberg that the company encourages employees to share their feelings after the election — this as PwC has been increasing its diversity and inclusion efforts with 44 percent of its newly minted 2016 partners being minorities or women.

In his address to his employees, Chip Bergh, president and CEO of Levis Strauss & Co noted, “we would not be the company we are today if it weren’t for Levi Strauss, who was himself an immigrant. He instilled a sense of doing what’s right, and our company values of empathy, originality, integrity and courage are perhaps even more meaningful today than they were 163 years ago. It’s because of these values that we have never been afraid of diversity and inclusion or speaking up about it.”

Why this matters: Regardless of the political climate, businesses know that if they want to remain competitive in a global economy they must hire and retain the best talent. For a company to remain silent in the face of societal issues risks alienating one of their biggest constituents — the employee. The next months and years will truly be a test of how Corporate America asserts and stays true to its values — and employees in particular will be at the helm keeping them accountable.

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Nate Wong is an experienced management strategy consultant, focused on corporate social impact strategy. His work on corporate social impact archetypes and purpose-driven talent has been shared and published in various arenas and sources such as Fortune. He is an avid speaker on social intrapreneurship and talent development.

*The “Test of Values” survey is still accepting responses; current data pull had 65 respondents

Re-post of the same article written in Medium