Business and Markets

Hoping for Spring: A Call for Intrinsic Leaders

March 6, 2017  • Judith F. Samuelson

Business leaders caught their breath last week – maybe for the first time since election day. Between the most presidential of Trump’s speeches and the distraction of the Academy Awards, the chaos of the last several months faded a bit – maybe just enough to consider the very real challenges that still loom large in the American psyche.

I spent the first month of the Trump administration traveling the west coast, taking the temperature of American corporations trying to duck the cross-fire of political upheaval – with boycotts launched from the left, from the right, or triggered by a tweet from 1600 Pennsylvania Avenue. Amid the chaos, one major law firm was compelled to issue a guide to managing attacks on social media.

It’s not clear yet if it’s safe for companies to move from defense to offense, but we won’t tackle our most complex societal problems without business at the table. So what do we need from our business leaders now?

A lot of public and consumer outrage is rooted in the raging debate about immigration, but that’s only one of the complex issues in the mix.  Enter a new kind of boycott. What’s the next move for a brand when the public protests something over which management has little, if any, control?

Take #DeleteUber. What did the 200,000 users who dropped the Uber app in the wake of Trump’s visa ban really want? Were they punishing a company that appeared to profit from a taxi strike in sympathy with protesters at a major airport? Were they trying to use their pocketbook to influence immigration policy? Or was the public reacting to signs of a corporate culture gone bad?

In an attempt to mollify angry consumers, the Uber CEO Travis Kalanick dropped out of the President’s business council. But taking a stand against White House policy in the age of Trump is treacherous ground for business leaders who are schooled to keep their head down and focus on the numbers.

In the 1960s and 70s, when the first large-scale public actions against companies took root, consumers protested product attributes or business decisions that were largely in the control of the company.

Nestlé was targeted for marketing infant formula to poor women in far-flung markets. Cesar Chavez created a movement and, ultimately, an effective boycott aimed at farm worker rights in California and beyond. In each case, long before the internet transformed communications, it took years for campaigners to see results – but the changes sought were within the command and control of the company or employer.

In more recent years, NGOs like Oxfam and Greenpeace have perfected the art of deploying social media to target big brands like Shell, Nike and McDonald’s. The campaign is carefully executed to reach deep into the company’s supply chain or industry. The campaigners turn issues from deforestation to human rights to labor conditions in remote places into a tangible cause for consumers. The effect is felt in boardrooms daily. Success requires coalitions, public-private partnerships, and new decision rules and protocols.

Fast forward to 2017. What happens when the business leader has no management levers to pull? For example, how should Coke or Walmart or Starbucks respond to the anger of Mexicans who created #AdiosProductosGringos to protest the President’s intention to build a wall and levy a border tax to pay for it?

Watching tech CEOs – first one, then two, then a dozen, then a parade – speak out on the travel ban issued by the White House offers hope that there are changes afoot. That after a decade of near silence, our business leaders have woken up to a new reality about the need to lean into the important issues of our day.

However, a further leap into the void by our corporate leaders will be required. It requires moving beyond the typical ‘business case’ justification.

Tech executives are still operating in their comfort zone; they find their voice in the familiar language of competitive advantage, global markets, and commitment to highly valued employees. Policy to radically curb immigration is a real risk to the bottom line. There’s safety in numbers for those who speak up.

What’s next? Because we, the public, want even more.

We want, we need, the kind of business leaders that this country once took for granted.

“Seventy five years ago, leadership from the American business community helped lay the foundation for policies that made the U.S. the most prosperous nation in the world. That leadership is needed again.”
— Steve Odland and Joe Minarik from 'Sustaining Capitalism'

Seventy-five years ago, executives with long-term vision and a belief in the country created millions of jobs to absorb the guys coming home from the front lines. They threw their weight behind the Marshall Plan to rebuild Europe. The founders of CED articulated a need, made the case to the public, organized networks and chapters in every state and in tens of thousands of communities across the country. They worked with government and embraced both risks and costs, even when the benefit could not be tied back to their bottom line – or to add luster to a brand.

Roger Martin, in his provocative essay, The Virtue Matrix, calls this “intrinsic leadership.” Prudential demonstrated intrinsic leadership when the company allowed individuals infected with HIV to access their life insurance survivor benefits to pay for costly treatment. There were costs and some risks for Prudential as the first mover, but the decision was an important example of meeting a real need and the industry soon followed suit. When Levi Strauss openly published its sources of supply to hold itself accountable to the highest labor standards, it challenged norms in an industry able to influence factory conditions around the world. Pepsi pursues healthier alternatives to high-fat, high-sugar snacks and sodas, in spite of the skeptics in the financial markets.

Intrinsic leadership is thoughtful, humble, and rooted in the needs of the commons. It can and does rebound to the bottom line as industry protocols evolve and the bar is raised on business as usual. But the risks for the first mover are real.

But what is leadership without risk?

The challenge for CEOs is clear. Citizens are looking for leaders on issues of real consequence. The big issues are no longer confined to the ballot box as consumers seek to align their dollars with their ideals. The problems – climate change, inequality, debilitated communities – have business implications, but the investment required can’t be measured in quarters.

We need the rational and future-oriented sensibility of commerce to help us make difficult decisions for the health of the commons. The ying and yang of the two – the health of commerce and the health of the commons – is found in our country’s DNA.

The reward will be nothing less than restoring our trust in business – trust that has been ruptured by decades of focus on the quarterly share price at the expense of the society that offers business its license to operate.

The seeds of change have been sown in this moment of upheaval. I, for one, can’t wait until spring.

This post originally appeared on LinkedIn. Judy Samuelson is the founder and executive director of the Business and Society Program which works with business executives and scholars to align business decisions and investments with the long-term health of society — and the planet.