“This City is what it is because our citizens are what they are.”Plato 428-348 BC, Athens
It started with the boycott against Uber.
As the protests against President Trump’s controversial executive order to restrict immigrants and refugees from entering the US heated up, the message #DeleteUber spread like crazy on Twitter and customers began avoiding the service.
Why attack Uber? Even though Uber is wildly popular, some people have always had a problem with the company because of the way it competes against traditional taxi services. Personally, I’m a fan because I believe strongly in disruptive innovators that leverage under-utilized capacity through the new sharing economy. But when taxi drivers, who are often immigrants, went on strike at JFK and La Guardia airports to protest anti-immigration policies, Uber did not join them. Instead, it eliminated its surge prices to help stranded passengers to and from the airport. This was seen as a “strike-breaking” effort.
Uber CEO Travis Kalanick was also a member of President Trump’s Strategic and Policy Forum as a business advisor. Protestors on social media went nuts demanding Kalanick resign from the forum. Taking advantage of the negative attention, Uber’s chief competitor, Lyft, donated $1 million to the ACLU (American Civil Liberties Union) to help them support legal challenges to anti-immigration policies. Kalanick resigned from the presidential forum a few days later.
Kalanick said he just wanted a seat at the table. This was a reasonable and smart thing for a CEO to do, but the perception of support for Trump’s policies created a real conflict between Uber and its customers. This threatened Uber’s reputation, credibility and future like no competitor could. How should Uber have handled that situation better?
Purpose is the New Customer Strategy
That next week over 100 tech companies signed an amicus brief to fight the executive order in court. It’s not surprising that tech companies would be pro-immigrant. Their need for engineers is so great they must hire as many people as they can from all over the world. Their markets are global and many of their founders or CEOs are immigrants, too. Tech companies also prize entrepreneurialism and innovation and look for it wherever they can find it.
But many companies outside tech also spoke out against the ban. Starbucks promised to hire 10,000 refugees over the next five years, and earned a boycott from Trump supporters. Nike, Levi Strauss, GE, and Chobani, the Greek yogurt brand also came out.
Others took a different approach. Tesla and SpaceX founder and CEO Elon Musk took heat from being on the forum, and defended himself on Twitter as being an advocate for alternative energy. However, his companies also joined the amicus brief. In contrast, UnderArmour CEO, Kevin Plank, voiced his support for President Trump as a pro-business leader who provided a real business opportunity for the country. While UnderArmour doesn’t manufacture many of its products in the US, it started as a local manufacturer and prizes that history. Amazingly, UnderArmour’s stock price seemed to take a big hit as a result.
How can we interpret or judge these different reactions?
A New Dilemma for CEOs
In the old days, companies worried only about profit, image and market share but things are different now. How can a business best navigate the next political or societal crisis?
The traditional answer is to check with the bottom line. The old rules say businesses should do whatever makes the most business sense and CEOs have a fiduciary obligation to shareholders.
But purpose-driven companies are stuck in a real dilemma. Being purpose-driven sets a company apart from competitors in a brand sense and helps them be more dynamic and innovative. I believe it is a source of real competitive advantage.
However, companies that are purpose-driven are viewed differently by customers, employees and the stock market. Because they are purpose-driven, people assume they should always act with values and ethics in mind. It almost doesn’t matter whether their purpose is aligned with a particular issue or not. Perception and expectations count more.
Purpose, in other words, can make you a target. If your purpose-driven company fails to take a position on controversial issues, customers can get very emotional and criticize you. If you take a public stand, you can get attacked by other customers.
I know the immigrant and refugee question is a tough one. In Europe, we are feeling the pressure a lot more than the United States. My own perspective, as someone who lives and works in multiple countries, is that global companies are much more open to migrants than most nations today.
Navigating areas where societal, political and business priorities clash is incredibly difficult. I don’t know what the right answer is, but I know the question is not going away soon. I believe that being a purpose-driven company is better today because people want more than products and services now; they also crave meaning. As the world becomes more chaotic, uncertain and polarized this need for meaning and purpose will only grow. Accordingly, societal, political and business clashes are likely to increase.
This is just another example of how Purpose is becoming a very serious business.
Pic Father vs Sun