When firms should enter the political arena

They should consider their declared values and what is expected of them

Even before Donald Trump took office, the calls for boycotts began. “@Amazon we are not shopping with you until u pull all Trump merchandise,” one woman wrote on Twitter in November. Another tweeted: “I’ll NEVER buy @LLBean for my daughter EVER AGAIN. I won’t support any1 that Trump does. Change UR ethics.”

These weren’t isolated incidents. For months, a campaign called Grab Your Wallet has been urging consumers to boycott dozens of companies — including Macy’s, L. L. Bean, Bloomingdale’s, Zappos and Amazon — for their links to Trump and his businesses. Their offences, such as selling Trump-branded products or having a board member who raised money for Trump, are neatly listed on the group’s website, alongside four forms of contact information for each business.

Plenty of other companies have gotten caught in anti-Trump campaigners’ cross-hairs. Last month, a trending hashtag on Twitter called on consumers to #DeleteUber after the ride-sharing company was accused of trying to profit during an anti-Trump taxi strike in New York City. More than 200,000 users deleted their accounts in protest.

But alienating the president’s supporters can be just as dangerous as angering his opponents. Earlier this year, Trump foes boycotted Nordstrom for carrying Ivanka Trump’s products; later, when the department store stopped selling the line, Trump fans launched a boycott of their own. (The company blamed declining sales for the decision.) #BoycottStarbucks became the top trending topic on Twitter after its chief executive announced the company would hire 10,000 refugees — an implicit rebuke to the president and his travel ban.

All of this has companies wondering whether to take stances on political issues. Are the reputational rewards worth the potential backlash? I advise businesses to ask two questions to figure this out the answer.

First: Is the issue directly related to the company’s core business — or to what Helio Fred Garcia, president of the Logos Consulting Group, calls the company’s “lived and declared values”?

A study by the global communication firm Weber Shandwick and K R C Research found that more people view political statements by chief executives favourably when they’re about issues that directly relate to their work. But when companies speak out on policies that aren’t clearly relevant to their businesses, more view them unfavourably.  

“Our research shows that consumers do not immediately understand why a CEO would be speaking up on an issue that isn’t directly relevant to what their core business is all about,” said Leslie Gaines-Ross, Weber Shandwick’s chief reputation strategist.

The second question businesses should ask is whether the people who matter most to them — including employees, customers, investors and board members — are affected by an issue or feel strongly about it and expect the company to speak out.