I grew up Coca-Cola. My dorm master at Woodberry Forest School, Mr. Richard Glover, was Pepsi. He served Pepsi on Turner Hall, had Pepsi stock, and he loved Pepsi. In our many discussions of the relative merits of the brand that went on for seeming hours as I drank Pepsi in those glass bottles, he threw me the ultimate piece of information to win the argument with me. Pepsi is Republican and Coke, Democrat.
His understanding of the political leanings of the two companies was complex, as they involved many sorts of news items and leanings, none terribly overt. The reality is that over the years, Coke has seemingly been Democratic, and other times, as with Eisenhower, more Republican. Just depends on how you see it, and which stockholders are donating to which campaign. (A separate thought. At some point, I gave Mr. Glover an antique Pepsi bottle opener, in exchange for free shoe shines for the remainder of the year. It was the best deal ever, and I have always liked Pepsi in theory ever since, even while thinking it too sweet.)
But back to the politics. Back 30 years ago, I had never heard of such a thing as a company being overtly political. No company, ever, was political. It was bad business. An executive who politicized his publicly traded company would be doing the company a sort of malfeasance. But his understanding made sense in the early 1980s, as Coke, headquartered in Atlanta, was of course seemingly more Democratic, and Pepsi, in corporate New York, seemingly more Rockefeller Republican. These labels, of course, no longer apply, and both brands now seem corporate slant alot of different ways. Overt politicization of a company, however, would have been a sort of malfeasance, a violation of a public trust and of fiduciary duty to all stockholders.
That is not to say that companies did not then make donations to apolitical things, or political conventions. I have the 1964 Atlantic City Democratic Convention guidebook, which is packed with corporate ads and donors. The back cover is Coke, and other companies include Avco Lycoming airplane engines, Federal Pacific Electric, Spiegel Catalogs, Republic Aviation, Aerojet-General, Shell, General Dynamics, Eastern Airlines, Stanley-Warner, Georgia-Pacific, Gilbert Systems, Loral Electronics, General Precision, and others. I presume that many of the same names would have sponsored the Republican Convention as well.
These sponsors, however, were above the fray, and the ads inside, if political, indicated how employees of the companies supported both parties, and participated as a part of the democratic, civic process. The political cast of the executives would have been indiscernible to the average consumer. Not because we have different media (newspapers always printed endorsements and appearances at party functions) but because company executives know that it was good business to be above politics, and knew how to stay above fray.
This year, a number of companies have been affected by political issues. Each situation is a bit different; there is the Nordstrom Ivanka shoe fracas, the Macy’s dropping of Trump lines and Target’s bathroom policy. Each situation could have been avoidable. Today, when half the country can’t stand the President, and the other half supports him, you want to be ABOVE the fray as alienating half your market is just that, alienating half your market.
Here are some general old school guidelines for keeping the brand safe. There are no rules here, only guidelines. The only rule is that it is a good policy to keep your mouth shut, and sleep on it before you sign a check or spout off on CNBC.
Writing these sort of things seems terribly obvious. But they are no longer obvious.
- Founder’s Discretion: Founders are more free to judiciously support who they like, and fund whomever they like as a candidate. If you started the company, you get more leeway in politics. Presumably, you know the risks, and can judge them accordingly. While Howard Shultz’ political remarks about immigration were not smart for a large part of his market, he gets a bit more ability to mouth off than a hired CEO who only owns stock in the company because he worked there. And the more divorced a family fortune is from the actual company, the safer you are in not hurting the brand. Ergo, no one sees Hyatt as a “Democrat” brand even as the Pritzker family supports some Democrats. That being said, any person who represents a publicly traded company should carefully consider how their actions help or hurt the brand among all consumers.
- Hired Hand CEOs: Publicly Traded CEOS and hired staff of companies do not get to publicly comment on candidates. Period. They vote for who they like, but they attend political functions and donate at the risk of alienating stockholders and consumers. This is not to say that execs have to refrain from donating to campaigns. It just means they need to step back each time, and think about the repercussions of what they do, not in helping the candidate, who they may like, but instead think about the company they represent. They need to watch the Netflix series The Queen to see how to behave. The reality? If you get the power of meeting with Winston Churchill each week, and the trappings of representing the everyday aspirations of the people of a large empire, you do not have the luxury of mouthing off in public on every issue out there. Again. If were a CEO or exec recruited to a company by a recruiter, you just that, a hired hand. Comport yourself accordingly.
- Issue Marketing: The idea of aligning a brand with a cause gained favor in the 1990s. It is not a good idea. I am so over companies saying they care. They do not care. They lay off employees. They sue people. They behave badly. Well, not all of them. But many do. And so the pronouncement that a company cares about breast cancer or world hunger or gender issues or water quality is beside the point. The evidence is in what you do with your own house, with your own employees. I do not want to hear about a company’s caring about breast cancer if they have a 5K deductible when you actually get breast cancer. Let not your pink bows speak, but instead your actions. That is not to say that companies cannot have causes. McDonald’s Ronald McDonald house is supported deeply by the company and its franchisees. They have a cash box at the drive thru, that’s it. And at all other times, the generosity comes from the company. But that is different than the cause of the week stuff that happens today.
- Stay Out of the News: Ginning up a “controversy” over a Super Bowl ad is so, well, Marketing c. 1995. I think we all see that you can cause a ruckus, get in the papers, and get some “exposure” for your rapidly declining “brand.” But this does not serve the brand long term. We can all see through Budweiser, which is no longer an American company. It has sold its once-delightful garden-themed parks and connected itself to a Hollywood celebrity culture in an attempt to remain relevant to a population that would rather have local craft beers. So instead, let us go back to ads where you show the merits of the product, and play up the everyday people who make the product. Again, an old advertising maxim. Show the product. Differentiate the product.
- Stay Away from Issue Conferences: Do we really need CEOs jetting about, frothing on about issues at international conferences? How about sticking to business, and making sure your companies do well by their employees and customers.
- Political issues: Do not align yourself on things ephemeral. Think of things eternal. You may think that the average person cares about your opinions, but they do not. If you have a personal feeling for a certain issue, as the Cathy family of Chic-fil-A has or the Hobby Lobby family has, you need to stick to that carefully grounded policy consistently, and not let the general public blackmail you into change. This goes for the left side, as well, but again, these are tightly held private companies. Of course, the tradition of a well-crafted op-ed, on an issue of concern to a publicly traded company, is a welcome part of the political process. These sorts of thoughtful intrusions into the process are helpful to all. For instance, Target would have been better to explain how store managers monitor the bathrooms, and how managers have great leeway in making them safe for all customers, instead of their reaction, which was defensive and insulting to many middle market customers. Frankly, average consumers don’t care what middle-level hired staff brand managers in Minneapolis think about trans-gender issues. Please shut up.
- Small family companies: When you serve the public, you don’t want to have a bumper-sticker on a prominent car, or a sign in your company parking lot. That is not to say that it is illegal. Instead, the reality is that it is a courtesy thing, out of respect for your customers, that you not take a political side in a public way. Of course, donate as you please out of your personal accounts, and appear where you like at dinners and fund-raisers. And go to monthly local party meetings. But try as best you can to separate your company identity from your personal identity.