Unseating CEOs, disrupting businesses, politicizing corporate strategy, destroying products and creating new markets: The power of the public is relentlessly shaping the license to operate for organisations big and small.
The expression “power to the people” has for decades been both a political slogan and cultural expression, often used to describe opposition to an establishment. Entering 2019, I think this creed is increasingly becoming an apt description of the reality formed by converging mega-trends. I strongly believe today’s public is more powerful than ever before, and this is also one of the cornerstones of our “Fifth Seat” thinking, first pioneered by H+K Strategies’ Chairman and CEO Jack Martin.
Based on my observations, I think this is driven by the interplay between three big factors: A more enlightened and conscious public, global political polarization, and the power of social media. These have helped create both awareness, energy, and tools to make titans tremble.
Today, the public engages in how organizations are run, questions their actions, and demands a sustainable approach to business. I see daily how our clients and other organizations face a public demanding truth, transparency, and the highest ethical standards.
Moving capital and changing behavior
Recent examples of the corrective nature of public pressure on corporations abound aplenty.
In the article Name and shame? Evidence from the European Union tax haven blacklist, PhD Research Scholar Aija Polakova was able to show an interesting link between the European Union’s tax haven blacklist from 2017 and market behavior: When the list got publicized, investors chose to move capital elsewhere, and thereby punishing corporations placing money in countries identified as not doing enough to combat global tax evasion.
Another case in point can be seen in how the public have engaged itself in the question of how much corporations should pay its workers. In 2018, both Amazon and Walt Disney announced they would increase the minimum wage of its workforce to 15 dollars an hour. CEO Jeff Bezos acknowledged the effect of outside influence in the company statement, saying that “We listened to our critics, thought hard about what we wanted to do, and decided we want to lead.”
With a greater awareness of what is deemed sustainable and not, a narrow focus on profits is no longer enough for shareholders.
Polarized politics and its influence
For good or worse, our era’s political tensions have invigorated the public. Emotions running high in politics have spilled into the corporate arena.
When Nike chose to cast Colin Kaepernick as the face of its Just Do It campaign, it sparked a proxy war between the political left and right, with Nike’s market value as the scoreboard. Whilst Kaepernick for the political left became a champion for racial equality, the right labelled him unpatriotic. Consumers on each side of the political spectrum chose to channel their purchasing decisions for Nike apparel accordingly, leading to both boycotts and buycotts.
Furthermore, a long list of profiled companies has been forced to change course after having ended up on the wrong side of politically inflamed cases. Several multinational organizations ended up severing their ties to the NRA, after the NRA was heavily criticized for its response to the Stoneman Douglas High School shooting in February 2018.
Similarly, public pressure forced advertisers of The Ingraham Angle to pull out, after conservative talk show host Laura Ingraham accused one of the survivors of the Stoneman Douglas High School shooting, David Hogg, for “whining” about not getting accepted to several colleges. Hogg took to social media and called for a boycott of Ingraham, eventually leading several corporate backers to end their engagement with the show.
Democratizing the punditocracy
The last, contributing factor to the increased power of the public has been the rise of social media. Traditional channels such as newspapers and TV traditionally preferred experts to contribute to the marketplace of ideas; ordinary citizens’ possibility to break through was limited.
Social media presented a brave new world, where ordinary individuals suddenly found themselves in possession of a tool capable of organizing marches, toppling governments, and bringing down tycoons. The communications landscape we were a part of just some years ago have gone through a revolution. The era of hashtags have had immense influence on our society and borne genuine movements like #MeToo and #BlackLivesMatter that transcends the online realm and creates real change in the world.
Social media has nurtured the power of the public in relation to corporations as well. For years, the Dakota Access Pipeline have been one of the most hotly contested and debated cases in the United States. For protesters of the pipeline, social media and the hashtag #NoDAPL have been a key to offering the outside world a glimpse into what has been happening onsite.
In the age of polarized politics, heightened expectations of corporate social responsibility, and social platforms, the rules of the game have changed; the power of the public has become a force of nature.
This article was originally posted on LinkedIn.