How Companies Should Weigh In on a Controversy
The recent Harvard Business Review article, How Companies Should Weigh In on a Controversy, provides a roadmap for managing engagement with contentious societal issues. Anchored in global survey research and practical case studies, it outlines strategies for corporations to address stakeholder concerns while staying true to their values. From Bud Light’s missteps and Natura’s success to Florida Governor Ron DeSantis’ conflicts with the Disney Corporation, the article illustrates the critical balance between authentic corporate values and the expectations of a diverse audience.
Key lessons include the importance of consistency, transparent communication and understanding the nuance of stakeholder dynamics. Companies that ignore these principles risk losing trust, market standing and even legal leverage. This is particularly relevant as corporate and organizational leaders brace for the challenges ahead in a highly politicized environment where the Court of Public Opinion holds unprecedented power.
I encourage you to dive into this thoughtful piece. It’s a must-read for anyone tasked with guiding their organization through the ever-changing landscape of public discourse and societal expectations. As always, the Hennes Communications team is here to help you navigate these complexities with clarity and strategy.
Bruce Hennes, CEO
Hennes Communications
How Companies Should Weigh In on a Controversy
By David M. Bersoff, Sandra J. Sucher and Peter Tufano, writing for The Harvard Business Review
On April 1, 2023, just as the March Madness college basketball tournament was getting underway, the transgender influencer Dylan Mulvaney uploaded a sponsored post to Instagram to promote Bud Light. The backlash was immediate and cut deep. The beer brand was condemned by social conservatives across the United States, who launched a boycott.
In its first public statement, made two weeks after the uproar began, Anheuser-Busch, the brand’s parent, avoided any direct mention of the controversy or of Mulvaney, who had been the target of bitter attacks. She made clear her dismay. “For a company to hire a trans person and then not publicly stand by them is worse, in my opinion, than not hiring a trans person at all,” she said. The controversy is estimated to have cost Bud Light $395 million in U.S. sales, and the brand lost its place as America’s top-selling beer by revenue.
In contrast, consider Natura, the Brazilian cosmetics giant. In July 2020 the company made headlines after it hired the transgender actor Thammy Miranda to promote its Father’s Day campaign. Conservatives accused Natura of attacking “family values,” flooded social media with hate speech, and demanded a boycott of the company’s products.
Natura quickly stood by its decision to hire Miranda, stating, “Natura celebrates all ways of being a man, free of stereotypes and prejudices, and believes that when this masculinity meets fatherhood, relationships are transformed.” Brand experts observed that the company’s actions were consistent with its history: “Natura has been working with this purpose [inclusiveness, diversity, acceptance] for over a decade,” Adriano Sá, a professor at Saint Paul Escola de Negócios, told UOL Economia. “The campaign only reinforces the company’s positioning.”
The backlash didn’t seem to negatively affect Natura. Two days after the vitriol broke out, the company’s shares had jumped 6.7%, and Natura ended the week with more than 100,000 new social-media followers. And although the entire category suffered in this period because of the pandemic, Natura’s online sales shot up 225%.
A first lesson to be gleaned from this tale of two transgender spokespeople is that companies “speak” through their actions. People saw Mulvaney and Miranda as expressions of the companies’ values, whether intended or not. Natura’s actions were judged to be consistent with its long, visible record of support for diversity and inclusion. Bud Light, in contrast, took many of its stakeholders by surprise. The brand was not widely recognized for its decade-long support of LGBTQ+ rights, so its association with a trans spokesperson came across as a niche message that did not play well with its core consumers. Michel Doukeris, the CEO of Anheuser-Busch’s owner, AB InBev, described Bud Light drinkers this way: “One, they want to enjoy their beer without a debate. Two, they want Bud Light to focus on beer. Three, they want Bud Light to concentrate on the platforms that all consumers love, such as NFL, Folds of Honor [a scholarship program for children of fallen members of the armed forces], and music.”
Despite the rhetoric of shareholder primacy, 73% of respondents globally say that the primary duty of a company is to benefit all stakeholders.
A second lesson is that outcomes may be related less to an issue itself than to how the company responds to it, especially in the face of pushback. Natura doubled down on its principle of inclusivity, whereas Anheuser-Busch initially appeared to ignore the issue. (It may be tempting to argue that Brazil is simply more accepting of transgender people than the United States is, but a 2021 study by UCLA’s Williams Institute found that the two were virtually identical in their acceptance of LGBTQ+ individuals, ranking 23rd and 24th respectively among 175 countries.)
One point is crystal clear: Executives need guidance about managing their organizations’ engagement with societal issues, including hot-button topics such as gender, climate, and racial discrimination. We believe that companies can take a stand on such issues and successfully navigate both internal and external pushback if they acquire a more sophisticated understanding of their stakeholders’ concerns. Success does not mean avoiding public controversy or achieving unanimous support among key stakeholders. Rather, it results from adhering to processes and strategies that over the long term will lead to increased competitive advantage and an enhanced license to operate while also helping manage any short-term heat and scrutiny.
We don’t provide a simple playbook or easy solutions. We use recent survey research, along with examples from managerial best practice, to provide insights into how to prosper in a world where the private and public spheres are uneasily blending and businesses are expected to address major societal issues. We propose an approach that is both anchored in data and sensitive to values and context. It is intended to help leaders figure out which issues to address and how, ameliorate stakeholder disappointment, and manage any blowback. Data can tell you what your various stakeholders care about, but judgment is needed to carefully consider their conflicting preferences while remaining true to your company’s values.
Expectations of Business
In three separate surveys, administered in 2021 and 2022, we reached more than 75,000 people in 28 countries. We asked them about the role of business in society, which stakeholder groups’ interests should be prioritized, which issues (if any) they believed companies should weigh in on, and how business in general was accounting for stakeholders’ interests and performing on key issues.
Even granting that the public may be underinformed about the inner workings of corporations, we believe that people’s views regarding the proper role and the current performance of business in society matter, because the public consists of employees, consumers, investors, and voters—the broadest swath of stakeholders. We ignore their judgments at our peril, given their importance in determining a corporation’s long-term prospects.
Around the world people are clear about the core economic function of business. Its main job, acknowledged by the vast majority (85%) of those we surveyed, is to produce safe and reliable products, create jobs, create wealth, grow the economy, and drive innovation. But its second job is nearly as important: The societal duties of business were also deemed central by 75% of our respondents. Those duties include, for example, tackling climate change, addressing discrimination, supporting local communities, and stepping in when government is ineffectual. Clearly, societal expectations haven’t superseded traditional economic expectations; they are simply being added to business’s plate.
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