Corporate CEOs Should Avoid Wokeness

The term "wokeness" implies speaking out on perceived injustices and sometimes in opposition to social norms.  Recently, more corporate CEOs have positioned their companies as advocates of political and social causes.  This has backfired for several CEOs.

An NPR/PBS poll found that a majority of Americans oppose companies using their public role to influence political, cultural, or social change.  There are likely similar views among shareholders, customers, employees, and suppliers.  

Nike ditched its Betsy Ross flag sneakers at the behest of a former professional athlete, who wears socks depicting police as pigs.  The resulting publicity revealed that Nike relies on low-wage, largely un-unionized foreign labor in what one publication called "abysmal working conditions."

After the urban riots in 2020, professional sports and Hollywood awards programs rushed to support Black Lives Matter (BLM), an organization with the objective of disrupting the nuclear family and defunding police while accusing every white person of being racist.  Their TV viewership plummeted.  A recent poll of voters found that support for BLM had dropped to 2%.

Procter & Gamble allowed its razor subsidiary to launch a marketing campaign bemoaning toxic masculinity.  It triggered a backlash and an $8-billion share value decline.  In 48 hours, the public reaction was clear: 23,000 likes and 214,000 dislikes on social media.

"Woke" policies isolate and divide people in many ways: race, sex, religion, age, political affiliation, geography, firearm ownership, ancestor behavior, and sexual preference are just a few.  Corporate CEOs should steer clear of fomenting such divisiveness.

There's a good chance a significant percentage of shareholders, clients, and employees don't share the CEO's views on social and political issues.  "Help Wanted" signs are everywhere.  Shares can be sold with the push of a button.  Most products and services have viable competitors.  Why stay with a company whose leadership besmirches your closely held beliefs?

Major League baseball (MLB) relocated its All-Star Game because of a new election law.  Because this new law underscored voter ID requirements, they moved from Atlanta, a city 51% black, to Denver, a city 9% black.  So, ironically the majority of the $100 million in expenditures from hosting the game were lost to many minority business-owners.

Impulsively moving from a majority black city to a city with twice the average income per resident damaged MLB's image.  The All-Star Game TV ratings were the second-lowest in history.

Some corporations appear to jump on wokeness as a cynical diversion.  Following the hostility big banks experienced after the 2008 recession, many rushed to appoint female and minority directors.  Goldman Sachs proclaimed they will never take another U.S. or European company public if its leadership isn't sufficiently "diverse," without defining "diverse."  Asia was excluded from its policy.  As complaints about rising drug prices grew louder, some pharmaceutical firms announced millions to fight climate change while their price hikes continued.  Coca-Cola, founded by a Confederate Army colonel and under fire for fueling a nationwide increase in obesity and diabetes in minority communities, suddenly decided to teach its employees to be less white.

Americans of all shapes, sizes, colors, and backgrounds tend to come together in schools, in the military, and at work.  Consider my own experience.  As a Yankee Christian white boy from a small town, I roomed at school with an black American from a Southern city.  As a green Army 2nd lieutenant, I reported to a black commanding officer and relied on an experienced Hispanic sergeant to keep me out of trouble.

But the workplace is where most Americans mix with people of varied backgrounds.  Most people spend a major portion of their life on the job.  Some equate overall happiness with the harmony and satisfaction experienced at work.  All want to work for a leader they admire and who they feel has their back.

My first boss and mentor in the corporate world was Jewish from New York City.  We traveled the U.S. together.  His tutoring contributed to my growth and advancement.  Later as a corporate CEO, I managed a cross-section of races, ages, creeds, and ethnicities of both sexes.  I learned to promote harmony within my team.  I knew that mutual respect and cooperation were critical to meeting our objectives.

A survey published in The Harvard Business Review found that 86% of employees supported the importance of a diverse workforce.  So a U.S. corporate CEO leading a truly diverse labor force should find that the personnel make up will approximate a cross-section of America.  If so, probably 25% are politically liberal, and 36% lean conservative.  Further, 2% are probably Muslim, 2% Jewish, 6% Asian, 13% Black, 18% Hispanic, 32% are legal gun-owners, 49% say the Bible should influence  our laws, 52% do not believe in man-made climate change, 80% support voter ID laws, and 94% identify as heterosexual. The workplace is where a variety of races, religions, beliefs, socio-economic backgrounds, and ages come together to work for a common goal.

In spite of this, some CEOs have succumbed to supporting causes that have no relation to the success of their shareholders and offend the closely held principles of many employees.  These causes may even run counter to the welfare of a majority of their clients.  In fact, if the full gamut of the goals of a few of the groups they  support were realized, the CEO and many employees would be out of work and shareholder value destroyed.

The importance of teamwork is essential in today's knowledge economy. Many jobs involve interacting with others who have diverse skills, in different professions, living on more than one continent and working at various levels of the organization   Team members need to possess mutual confidence and respect for their leaders as they interact with the least amount of friction.  Cohesion among employees creates a sense of commitment, which motivates stronger effort and higher performance.  Successful leaders pull people together instead of dividing them.

There are hundreds of organizations promoting social and political causes, with many having established national platforms and substantial funding.  Employees, shareholders, and customers of every corporation have multiple opportunities to support any of these organizations with their own individual time and money.

Michael Jordan, as a businessman and former professional athlete, co-branded a famous line of sport shoes.  A cultural icon, he's considered by many to have been the best at his sport.  He was asked why he didn't get more political in his public statements.  He replied, "Republicans buy sneakers, too."  Corporate boards and executives can more efficiently serve society by maintaining their traditional duty to maximize shareholder value and rein in politicized executives who risk fragmenting the workforce and antagonizing customers, suppliers, and shareholders.   

Prior to joining the business faculty of a Midwestern university, Tom Harvey was the CEO of several companies.

Image: JMacPherson via Flickr, CC BY 2.0.

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