Cocktails with Carl

Ideas on How a Business Can Effectively Navigate an Increasingly Divisive World

If you’ve been paying attention to headline news lately, you’ll notice that a number of iconic companies/brands are struggling to stay out in front of a number of brutal PR battles. By taking a particular stance on what might be deemed a controversial topic, these companies have forced their customers to make a hard decision on whether to continue patronizing their stores/products. As a result, customers are leaving, revenue expectations have been lowered, stock prices are declining, and market valuations are down well into the billions of dollars. Of course all of it is exacerbated by social media, the pressure to pick sides, and the opportunity to earn a high ESG score.

I am watching all of this with a lot of interest. Not because I have personal investments in any of these businesses. Rather, I am curious to learn how they each got into this situation to begin with and how they intend to exit as unscathed as possible. It’s quite fascinating. As of today, it looks like it might take a long time to win back the trust of these customers-if ever. So the question is, are these strategic decisions made by the leaders of these organizations or critical errors made without the knowledge of leadership?

Before we delve more into this, let’s first travel back in time to 1990. Michael Jordan was the most talented and popular basketball player in the world. Just a few years into his endorsement deal with Nike, the Air Jordan branded shoes were a rousing success, generating hundreds of millions of dollars in revenue for Nike and making Jordan an increasingly wealthy individual. So when he was asked to endorse the Democrat candidate for senate in his home state of North Carolina, Jordan refused stating that, “Republicans buy sneakers, too”. Was Jordan smart or was he a sellout? We’ll get back to that in a bit.

As business owners and leaders, we are often put into uncomfortable positions where we need to answer hard questions or make difficult decisions regarding our business/brand and how it relates to the social and/or political world around us. This is potentially dangerous territory. Should we take a hard stance or remain neutral? Make the wrong choice or give power to the wrong people and your business could be devastated. Fortunately, there are a number of things we can do to prepare for these situations before they occur. Below I’ve provided some ideas to help leaders confidently navigate these waters should they find themselves in a challenging situation.

Establish and publish a company value system.

What does your company believe in and what is guiding its decision making process? A written set of values will provide a roadmap for everyone to be on the same page. Having trouble making a difficult decision? Referring to a defined set of values can help to cut through the noise, bring clarity, and ease the tension. What are your company's values and have you written them down and talked about them with your team consistently?

Set controls/rules for ALL of your outward facing communication.

With the craziness of social media and the ease of internet searches, it’s vital that businesses have a plan to manage every possible touch point with the outside world. This includes all social media sites, web sites, photography, advertisements, and blog postings, etc. Decide now what is acceptable and what is off limits. Who has access to create, edit, and publish content? For example, if you throw a big company party and decide to post a bunch of photos to the company Instagram, who has the power to share these photos and have they been scrutinized to be sure they align with the rules established?

Know your customer inside and out.

“Wow, they apparently have no idea who their customer is.” Have you seen a comment like this on social media lately? I bet you have. A willingness to alienate a large segment of your customers is either rooted in ignorance or over confidence. In today’s world, there is a ton of data available about consumers. Are you working to extract and study that data in every way possible? What tools are you investing in or what partnerships have you formed to assist you in doing this? Have you defined a typical customer profile for your brand and is your team educated about who it is? When equipped with this data, you can make decisions knowing the risks in advance.

Create an internal “disaster plan”.

This is the “break glass to access alarm” phase-if it happens to get that far. After 9/11, many families developed a specific disaster plan to deal with anything that might happen like that again. Part of that plan may have included things such as how to communicate, where to meet, what necessities to inventory should stores close, etc. The idea was to not get caught off guard and panic. In similar fashion, businesses may want to create a disaster plan in advance and decide the following:

Who will be on the response team?

Will we hire a PR firm or use an attorney as an intermediary in our communication?

Who will be the face of the company in the media (if applicable)?

Who will decide upon and author the communication?

Now back to Jordan….He made a conscious decision not to alienate a large share of his potential customer base over a political endorsement. I’m sure he was under tremendous pressure from certain people to do it, but he was still early in his career and his goal was to become the most talented and beloved basketball player in the world-to ALL fans. I wonder what would have happened had he acquiesced.

On the flipside, there are many companies and brands that intentionally create shocking ad campaigns because they’ve decided it does fit their value system. They are strategically turning off segments of the market on purpose and they are letting the chips fall where they may. The Nike/Kapernick partnership might be a good example of this.

I’m not here to voice an opinion on what is the right or wrong way to navigate these situations. I’m simply suggesting you create a system for making it easier when the time does come. Without it, you may find your company back on its heels, flailing, waiting to receive that knock out punch.

Good Luck!

Cocktail Recipe: Tom Collins

Another classic cocktail to quench your summer thirst!

2 ozs Dry Gin

¾ oz Fresh Lemon Juice

½ oz Simple Syrup

2 ozs Club Soda

1 Lemon Wedge for Garnish

Fill a highball glass with ice and place into the freezer to chill. In a cocktail shaker filled with ice, combine the gin, lemon juice, and simple syrup and shake until combined. Strain into the chilled highball glass and top with club soda. Garnish with the lemon wedge.

Enjoy!