The emergence of the conscious corporation

by | Jul 28, 2020

Image Credit: Rosie - Anda Corrie

I can vividly remember when I first saw Emma Gonzalez. 

She read her notes from a podium; head shaved, black tank top, tears in her eyes. Gonzalez thrust herself into the middle of the gun control debate after 17 people were killed at her high school on February 14th, 2018. She was so young— yet so strong —and committed to the cause that she captured everyone’s attention, including leadership at Dick’s Sporting Goods.

Ed Stack, CEO of Dick’s, took a bold step: raising the gun purchase age and prohibiting the sale of assault-style rifles in their stores. They even destroyed their existing inventory of assault rifles. 

According to Stack, “We’ve just decided that based on what’s happened and with these guns, we don’t want to be a part of this story.”

By this time, we had already seen companies make donations, boycott operators, and offer their services to help causes. This was different. Pulling those guns meant fewer sales and angry suppliers. That certainly happened. What Dick’s did not anticipate was that they had started a movement. Kroger, LL Bean, and Walmart quickly followed their lead. Gun manufacturers’ sales took a hit, and Dick’s sales rose. They topped quarterly revenue and earnings forecasts thanks to this new, inspired, group of younger consumers who were shopping with their conscience. 

The risk that Ed Stack took was probably unthinkable 20 years before. Historically, companies feared the ramifications to their business and, therefore, stayed clear of controversial topics. Corporations believed that building a healthy economy was their gig and our legislators would handle the civic duties. This all changed with the 2016 campaign for President.

The election of Donald Trump was emotional, confusing, and near-immediately divisive. It was The Battle of Winterfell, just with better lighting. Sparring between neighbors and politicians grew and with each jab people lost faith in our institutions. According to the Pew Research Center, by 2019 only 17% of Americans said they trust the government to do what is right. In 1958, that figure was 73%. 

This declining trust in government, however, did not change the human desire to believe in something or the need to belong. In fact, the more challenging the circumstances, the more we hunger for purpose, for belonging. Brands now have a unique opportunity to rally communities around the most pressing issues of our time and harness the collective voices for the greater good.

Since 2016, many of us took part in #deleteFacebook and our companies have emerged into the cultural conversations. Ford is making ventilators, Amazon is contributing to food banks and Bank of America is donating $1bn to causes that help address economic and racial inequality. Each of these actions raises the social consciousness and fills voids the government left unattended.

They also allow companies to stand out in crowded, competitive marketplaces and consumers are rewarding them. Today, 64% of consumers choose, switch, avoid, or boycott a brand based on its stance on societal issues.

A simple purchase can inspire consumers to feel like they are on the right side of causes, like they are a part of history.  But, where do companies start?

The goal for corporations is to show everyone that they are in it with us. Job #1 is to get their house in order and then create multi-faceted plans around a cause that aligns with their values. In response to the social outcry around George Floyd’s death, Google quickly devised their “Commitments to Racial Equity,” which overhauled their internal diversity programs and funded new initiatives designed to create opportunity for people of color inside and outside of the company. 

Their swift, decisive actions showed all of us that they spent little time calculating lost income and focused on how best to create change. The plan is chock-full of time-bound metrics, financial commitments, and an honest acknowledgment of where they have come up short. Sundar Pichai’s willingness to be transparent and accountable demonstrates their depth of commitment. 

To generate impact, taking a leadership position on critical societal issues is part of the deal. People will form stronger bonds with organizations that provoke conversation and change. Few companies have demonstrated this better than Patagonia. While politicians argue the merits of climate science, Patagonia boldly opens discussions around preservation and even took on the President when he posed a threat to protected land; a first for them. They have been unapologetic activists since the 1970s and use their revenue to support their cause and build community. Many people wear their clothes as signals that they are part of the Patagonia tribe and, therefore, helping to advance their cause. 

Don’t panic, brand builders. Corporations do not need a 40-year track record as activists to have meaningful impact. They can also work together for change within their industries— last summer, the leaders in the fashion industry did just that. Recognizing that fashion is the second-largest contributor to global pollution, 32 major names in fashion developed a plan to halt global warming, restore biodiversity, and protect the ocean. According to Marie-Claire Daveu, Chief Sustainability Officer at Kering, “Many companies have taken the initiative but if they do things on their own it has less impact on the ground than if they work together.”

Here we are in a historic time that makes us willing to mix capitalism and social justice like never before. Some companies seem apprehensive about the responsibility, but others are ready to be active agents of change. For them, moving quickly means they can shape movements, with their brands squarely in the middle. It is a remarkable deal we are striking with our companies. We give them the loyalty and profits that go along with the title “activist” company and they help us build a society that feels whole. 

Maybe this is how it should always have been; we are just learning how much we need each other. Regardless: we know that from this day on, we move forward together.

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Lisel’s Socials: LinkedIn

Editor’s Socials – Bennett D. Bennett: LinkedIn , Twitter

Written by Lisel Welden
Team Leader | Brand Builder | Marketing Strategist

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