Vital Interests Come From Within–Not Consumers, Not Marketing

The tragic events of the past week have renewed pressure on companies to take a social stance. For which there is almost nothing that customer-centric marketing can do. Companies act only when their vital interests are at stake. And the interest shown by consumers, while vocal, is not vital enough to matter. This is not a death knell for corporate social responsibility (CSR). It is simply to say that CSR is a matter of other vital interests, interests that are internal concerns not consumers external to a company. That puts CSR outside the purview and authority of marketing, but it points the way to actually making a difference.

The modern debate over vital interests goes back to the Great Depression. Standard Oil scion Nelson Rockefeller argued for stakeholders in?his report to the company’s board?after his eye-opening 1937 circuit of Latin American squatter towns, saying “the corporation must use its…assets to reflect the best interests of the people.” This debate was eventually settled in favor of shareholders by economist Milton Friedman in?an influential 1970 essay?in which he declared “there is one and only one social responsibility of business—to use its resources…to increase its profits.”

Demands for CSR (AKA: purpose) have arisen again, especially for sustainability, race, gender, voting and guns. What’s?unclear to many companies, though, is how these issues affect their vital interests. After all, consumers rarely buy on CSR. Boycotts are largely?ineffectual. And public outrage fades quickly.

No surprise, then, that?few commitments materialized?after the Business Roundtable changed its mission from shareholders to stakeholders. Even asset management firm BlackRock, whose CEO?regularly evangelizes about sustainability,?has been criticized for not practicing?what it preaches.

This is where the limits of customer-centricity become evident. There is more to vital interests than consumers—finances and talent, in particular.

To illustrate, consider finances first. The plaintiff’s bar is a powerful force for change, seen in?class action settlements?for asbestos, tobacco, discrimination, pollution, and other social harms. Companies often act preemptively to avoid such lawsuits. And the U.S. Commodities Futures Trading Commission?has warned?that climate risks have not been properly accounted for, thus posing “a systemic risk to the U.S. financial system.” Balance sheets must balance.

Talent, too. Company-provided health care was?pioneered by General Motors?in 1950?as a ‘gold-plated’ benefit binding union members more closely to the company and thus?less likely to strike. Similar?employee-related considerations swung Delta and Coca-Cola?from silence to speaking out against controversial voting legislation passed in Georgia in 2021. Several companies, including Amazon, Citigroup, Yelp, Uber and Lyft, cover travel costs for employees who must travel out-of-state for access to abortion. The competition for talent is fierce.

Consumers are the fulcrum of every business. But the conscience of every company comes from within not from without.?This?and only this is the way to make a difference. It’s okay that it’s a matter of money. It’s a matter of people as well. And what happens in the end as a result is all that matters.