Some companies that dive into social issues get themselves in hot water by offending consumers, being tone-deaf with their actions, or putting themselves into issues where they don’t belong. Do consumers want to see companies do this? And how can companies engage properly? Zeno Group did a study delving into these questions, called “Responsibility Reset: Navigating Societal Issues in a New Era.” I spoke with Zeno Chief Reputation Strategist and Managing Director of Global Corporate Affairs Mark Shadle about this research.
This conversation has been edited for continuity, brevity and clarity. An excerpt appeared in Sunday’s Forbes CEO newsletter.
Tell me about your research.
Shadle: The reason we did that is we noticed so many of our clients, as well as companies that are out in market today, who are grappling with the decision on whether to engage in social issues of the day: Which ones they should engage on, is it right for them? What we’ve observed from companies who felt like they were in limbo: They felt an obligation on one side, but there was a bit of fear on the other. There was a fear that they would have a mismatch with expectations, or they were afraid that they would somehow find themselves in the center of some controversy. What many of them had seen is that there are some companies that found themselves in the middle of those controversies, and were somehow now the headlines where they didn’t mean to be.
We wanted to do this research because we had seen a lot of worthy opinions of consumers, but what we hadn’t seen a lot of was the perspective of the C-suite. What if we asked both sides the same or similar questions? How would they view the world that we’re in right now? There’s the popular acronym VUCA—volatility, uncertainty, complexity and ambiguity—and that’s been used to characterize the environment that we’re in right now. But I think there's another [characteristic] that I would add to that, and that is polarization.
Zeno Group Chief Reputation Strategist and Managing Director of Corporate Affairs Mark Shadle.
Zeno Group, GettyWe’re in this market today where, yes, there is this potential for a misstep. But at the same time, what we’ve seen is that there’s a large population out there that is very quick to take offense, and feels almost an obligation to express their outrage. What we’ve seen is that companies have had campaigns in the last 18 to 24 months, I would say, where they ran almost the same campaigns, and previously they had no reaction or only a positive reaction. And those same campaigns, which really hadn’t changed much, now elicited some sort of controversial reaction. All of that has contributed to this environment. The crisis of confidence is that companies want to do something, they feel they should do something, and yet at the same time, they’re afraid of the misstep.
In general, are companies getting involved in issues today? Are they staying out of them? Or are they being very careful and only toeing into things they see as pretty noncontroversial?
Because of the environment that I described, companies are pulling back a bit. They’re not as aggressive, and I think they are evaluating what they should do and where. Hence the idea of this responsibility reset, where they’re essentially resetting what they think their own expectations are, and what the expectations are of their stakeholders.
In the data, there was this really interesting dilemma. [In] the C-suite, 69% said that they felt that consumers had an unrealistic expectation of what companies could do to engage and address issues of the day. We thought that’s really interesting. What’s contributing to that? Eighty-one percent said that polarization is actually making it more difficult. Perhaps the biggest statistic to me, what I thought was most telling, was that 74% of corporate executives felt that no matter what they did, someone was going to be upset.
So it’s this interesting environment, [where] you can do things, but someone is going to be angry about it. That’s not always the way I think people approach their campaigns or the stances that they took. Half of them said it’s only going to get more difficult. But here’s what’s interesting: Despite how difficult that is, and how challenging a picture that is, 84% said that the issues that we are all facing as a society are too important to walk away. Despite how challenging it is, corporate executives realize these are important issues, and they need to stay in the game.
What is it that consumers want? They want engagement, but how far do they want corporations to go? Do they want to see things that might make them mad? Do they want to see just a bit of engagement on hot-button issues?
Consumers have an expectation that companies will engage on social issues. Two out of three consumers felt that companies should do more, and almost identically, two-thirds of corporate executives say they feel that they’re doing the right amount. That was an interesting disconnect.
But what consumers said, quite interestingly, was that where they want companies to engage are on topics that are relevant to their business. Whether it’s a consumer packaged goods company or a B2B company, they feel that you should be engaging on something that reflects who you are as a company and what you actually have some ability to change. We refer to those as shorthand as the ABCs of engagement. The A was for authenticity. When they decide whether or not to engage, they should be saying: Is this an issue that we should engage in? Is it authentic to our business? Do we have a track record? Is it expected? Is there some basis for us doing it consistent with our values? The second is the B, and that’s for business relevance. Is it something that relates somehow to our business? If we’re a company that uses a lot of water, we definitely should have something to say about water quality, or water preservation, or water conservation—as opposed to something that has nothing to do with our business whatsoever. And the C is really important because that was all about competence. If you’re going to engage on a social issue, it should be one where you can somehow use assets that you have or resources that you have, that you can make a meaningful change toward.
That’s where the genuine nature of the engagement comes through. What consumers said is they don’t need to hear corporations getting engaged on every single issue of the day. They would rather see them focus on the things that they continue with things that are directly relevant to their business. That’s where it comes across as being genuine, as opposed to marketing hype. I think there’s a new generation of consumers out there who are very attuned to the marketing hype, and they can see right through it, and they can see when a company is not being genuine. Those are the ones that they put right in the middle of the bullseye.
We’ve heard the stories about businesses that have engaged and turned off consumers. But what is the risk if a company doesn’t engage at all?
What we heard is that while some would say your silence speaks volumes, we would say the kind of rationale speaks volumes. There’s an expectation out there today that you will show your work. That you will explain why you’ve decided to engage on a particular social issue. But consumers are saying they also want to hear why you decided not to engage in another one. The companies that have done it well are the ones who have very clearly said, ‘We recognize this as an important issue that touches a lot of people. However, there are organizations that are far more resourced and far more qualified to tackle this issue than we are, which is why we are not engaging in it. We support those organizations and their efforts, but it's not something that you’re going to hear us talking a lot about because others are more qualified.’ Those are the ones that seem to be weathering the storm better than others, even if it’s a really hot issue of the day.
In the survey, 88% of business leaders say they feel this situation is going to get worse. What does worse mean in this situation? More polarization? More pressure? More issues?
It’s going to be more difficult for them, only because it’s going to take more work. They’re going to have to explain their rationale in ways that they didn’t before. A good example is the idea of 75% [who] think that someone’s going to be upset. What that means is that now, you actually have to prepare for the upset. You have to prepare for the outrage. Before, you would think: We’re going to launch this campaign, and everyone’s going to love it. What we’ve seen today is: I can guarantee you not everyone’s going to love it. Then say, ‘Well, how much is that an acceptable risk for your company?’
And then, when that outrage does occur—because of the polarization that we’ve seen, it’s almost inevitable that it will occur—what will you do about it? You have to scenario plan now. You have to war-game the solutions. You need a good crisis plan in place for almost the simplest of brand campaigns. It’s harder because you’re going to have to put more effort behind it. I think at the same time, they’re realizing that the polarization that we see today, it’s not going to lessen. And I think they also realize—we have heard this separately—that the opposition that they face are more organized, polarized agendas. They’re concerned not just about your average consumer. Now they need to be concerned about organized groups that want to use them as fuel for their own agenda. That’s not something that they’ve had to be as concerned about as they do today.
Is it worth it for companies to take the risk of offending someone, or should they work to find areas where middle ground exists?
The research that we did identified the issues that mattered most to people. We gave them a ranking. We asked them: What do you think are the most important issues facing society today? That’s interesting because consumers, they have opinions. There’s the obvious concern about war in conflict, but almost almost near the top was economic instability and poverty, the things that affect their own pocketbook. Mental health was up there. Climate change. These are big issues. I don’t think companies can step aside from considering them. But here’s the thing: It’s going to be different for every company. Every one is going to have a different business and a different risk profile.
The bottom line is, CEOs say they feel obligated because the issues are so important, and it is good business for them to be engaged on the issues that matter to their business and to their consumers. But here’s the thing: It’s also a recognition that they have a choice. If you were a consumer packaged goods company today, how many consumers are using your product? You can’t address every single issue of every single consumer. I think CEOs are starting to recognize we don’t have to be everything to everyone, but we can actually make some choices here.
There’s always a place for companies that will do good things for the planet and for people. I think consumers most definitely want to see companies that have character, and companies that show commitments and stick to them. And companies, on the flip side, I think they can respond to that with clarity. Explaining to people: Here’s what we're about. Being very explicit about their values and how they use them to make decisions. I think they can also respond with actions that show that they’re making meaningful progress against those things.
We actually gave respondents a chance to take a look and say: What do you think companies should be doing to address these social issues? It was ranked and [the options were] comply, advocate, support or be an activist. The majority said companies should do something more than comply. Just complying with the law and regulations was not considered to be enough. They wanted companies to do something, but they didn’t want to see companies being an activist. What they wanted to see, more than anything, was companies who were actually working with third parties to get problems solved. CEOs need to say: Who are our allies? Who are we investing in? Who are we partnering with? Because that’s what consumers are saying they want to see. They don’t expect companies to do it on their own, but they do expect some engagement with civil society.
Do you see consumer expectation for company engagement continuing? Or will consumers continue to care, but be more interested in actions from policymakers or groups that directly deal with different issues?
What’s going to happen in the future is consumers will have the same level of interest in seeing companies engage on issues of the day. I don’t think that’s going to go down. I don’t think it’s going to dramatically go up because I think it’s already quite high. But what I believe will emerge is an authenticity lens. I think that they are going to say, ‘I’m listening to your words, but I’m also looking at your actions.’ And they’re going to look at the consistency between them. I believe there will be a lessening of expectations that companies will weigh in on everything. But I still think that they’re going to say corporations have a lot of resources and a lot of assets that they can bring to the issues of the day, and they’re going to want to see it. They’re just going to want to see it directed in the right places.
Is there anything else you wanted to add about your findings?
As challenging as all of this is, it was surprising how few companies have a formal process in place for anticipating what reactions are going to be. Even less had a process in place for gauging the impact of the campaigns that they do have.
We looked at optimism and pessimism, and you might have seen that the paradox identified in the research. As much as the findings seem to be very serious, I think there’s a lot of opportunity in this. I don’t think it is all doom and gloom. I think there’s a lot of opportunities for companies to say: Let’s reset what we’re responsible for. Let’s bring partners. Let’s formalize the way that we do things. And let’s acknowledge the environment we’re in. I think the companies that can do that well are going to be rewarded in the marketplace and they’re going to be rewarded financially, too.
