Going for Woke – Part 1 | When is it too much, or not enough?

The economics guru Milton Friedman famously said “The social responsibility of business is to increase its profits”. Up until yesterday most companies heartily agreed, and convincing them to spend even a cent on corporate social responsibility was almost impossible. But today big brands are falling over themselves to prove who is the most ‘Woke’, and it’s fast becoming a joke. How did we get here, and how can we move forward to a saner world?

Once upon a time, ‘Woke’ described savvy people who were alert to social justice issues like racism, inequality and sexism. It used to be a compliment, but nowadays there’s been a massive shift in meaning – from people to corporate bodies, and from compliment to insult. Today ‘Woke’ has become the twin sister of ‘virtue signalling’, and is about establishing your moral credentials by taking a stand on certain social issues to impress others, without actually doing anything to deliver on that stand, apart from censuring others who don’t agree.

In the last three years this trend has become a corporate compulsion, as brands fall over each other to demonstrate how politicially correct they are. Then they condemn those who don’t sign up to their liberal views, under the misguided impression it might boost their sales. The trouble is, the basket of causes the woke agenda supports are those of the liberal metropolitan elite, and not your average Joe. These new Woke Warriors are also extremely hypocritical – there is rarely any real commitment to substantive change behind the slogans, and sometimes their bad behaviour completely contradicts them. In the process they’ve alienated huge segments of their customer base, to the point that a new twitter hashtag is gaining currency – #GoWokeGoBroke – meaning, as soon as a brand goes woke, they don’t boost their brand, they trash it.

It began with Nike in 2017, when it employed Colin Kaepernick as the poster boy of a social justice-themed ad campaign, celebrating his refusal to stand for the national anthem at a football game, in protest at systemic racism in the US. This outraged a huge number of Nike’s customers and its share price nosedived as a result. This was followed in 2019 by Gillette and it’s ‘The Best Men Can Be’ advert, which took aim at so-called ‘toxic masculinity’ in a crass way that alienated its core male customer base. In the six months following the ad, sales dropped by US$350 million and their market share shrunk by 8%.

Then in 2020 we’ve seen a veritable train wreck of similar examples, spurred on by the Black Lives Matter (BLM) Protests and various other hot button issues. First of all, iconic UK brands PG Tips, Yorkshire Tea and Sainsbury’s all released statements on Twitter supporting BLM, saying any customers who didn’t agree with their stand were welcome to take their custom elsewhere. Uber likewise launched a huge ad campaign with the slogan “If you tolerate racism, delete Uber.”

Launched in the wake of the BLM protest, Uber’s antiracism campaign “If you tolerate racism, delete Uber” totally backfired. It was deemed ‘hypocritical and offensive’ by many of its drivers, a large proportion of whom are people of colour, and routinely exploited by the company. Image credit: adweek.com

The message from all the above examples is implicit, “Not only do we support this really great cause, but if you don’t agree, you’re a bad person.” Brands that trash people like this may earn brownie points from the liberal elite, but they will ultimately isolate themselves from large segments of the population who find their radicalization off-putting.

On that point, Ben & Jerry’s patronisingly took on the UK government on Twitter over their efforts to keep out illegal immigrants, saying “Let’s remember we’re all human… People cannot be illegal.” In retaliation, British ministers branded their product “overpriced junk food”, and told the company to stick to making ice cream. More to the point, the British public were incensed, having voted the government in specifically to deal with illegal immigration.

How did we get here?

Back in 1970, Milton Friedman wrote a paper promoting ‘Shareholder Capitalism’ in which he claimed that the primary responsibility of a business was always to act in the long-term best interest of its shareholders. He wasn’t asserting that businesses should never be concerned about social good – in fact, he argued that free-market capitalism itself increases social welfare and that companies could support it, so long as it didn’t compromise the bottom line. He just believed that a company’s sole motivation for such engagement must always remain a long-term increase in shareholder wealth.

His views became very influential, to the point that for all the decades since then the overriding corporate mantra has been about ‘maximing shareholder returns’, and corporate social responsibility (CSR) programmes have, with notable exceptions, been not much more than a fig leaf to create local goodwill.

The result is not all bad. Since then, hundreds of millions of people around the world have prospered, as profit-seeking companies opened up new markets and created new jobs. But this single-minded focus on profits caused shareholder capitalism to become increasingly disconnected from the ‘total’ economy, and its roots in communities. It neglected the fact that companies are not just profit-making machines but also social organisms and corporate citizens, sustained by communities and the resources of the planet. That realisation has caused many to believe this form of capitalism is no longer sustainable.

So today the emphasis has competely changed. Nowadays the purpose of a company as defined by the Davos Manifesto in 2020 is to “engage all its stakeholders in shared and sustained value creation” and that a company serves “not only its shareholders, but all its stakeholders – employees, customers, suppliers, local communities and society at large.” Called ‘Stakeholder Capitalism’, the model being advocated is that of a business where its performance is measured not only in terms of profits but also on how it achieves its environmental, social and good governance objectives. In short it’s about building a better world.

One factor driving this change is that the emerging generation of customers and employees – millennials and Generation Z – no longer want to work for, invest in, or buy from companies whose values don’t align with their own. And it isn’t just millenials. Today, research has shown that most consumers and investors want companies and brands to have a conscience – to demonstrate a purpose that benefits both local communities and the world at large, as well as themselves.

This trend is something we would applaud, as up until very recently this focus on using corporate muscle to work for the greater good has been all too rare. But as we said in our blogpost ‘Wear your values on your sleeve’, associating an established brand with a social justice issue has to be “both genuine, and seen to be genuine”. It can’t simply be stuck onto a brand like an accessory, or as a PR-driven marketing ploy. Because people will spot the hypocrisy a mile off and it’ll go viral in a millisecond. And even if they haven’t noticed the disconnect, nobody likes to be preached at, particularly by people and organisations who have no authority to do so.

For example, while criticising the UK government over illegal immigration, Ben and Jerry’s have famously been sued for the way they exploit illegal immigrant labour in the US. As for Uber, over the last few years they’ve been sued repeatedly for cheating and underpaying hundreds of thousands of their mostly racial-minority drivers. That’s how much they care about racism.

Then let’s look at Gillette. In this ‘Me too’ era some people have applauded their moral stance against toxic male behaviour. But bearing in mind they charge on average 20% more for the women’s version of their razors, how anti-sexist are they really?

As for Sainsbury’s, their idea of showing solidarity with BLM is to create ‘safe spaces’ for their black staff in their stores. Doesn’t that sound like a new kind of race segregation, anyone? It also implies that all Sainsbury’s white customers and staff are a threat to every black person on the planet, even before they said ‘if you don’t like this idea, don’t shop in our stores’.

So we’re not in a good place right now, and with the Covid threat still hanging over our economies like a sword of Damocles, dealing with this uninvited nuisance is the last thing we need. But bearing in mind the very laudable desire for brands to become more socially and environmentally responsible, what can brand owners do to become more values-oriented, in a way that helps the planet and strengthens their brand, while not alienating their customers and the public at large?

We would like to share three basic tips, as follows:

1. Choose a cause that is authentic to your brand.

The problem with all the brands rushing to support BLM over the last summer is that there was no apparent link between the issue and their brand, or legacy of activism in this area. Consequently we have no reason to believe that the statements they come out with are sincere, and backed up by real commitment from the leadership, and genuine activism over the long term. ‘Cause marketing’ is not necessarily a bad idea, but it tends to backfire if the stance taken appears to be a one-off, or an opportunistic attempt to selfishly grab attention on the back of an issue.

When a brand ‘sees the light’ and repents of past bad behaviour, all well and good. But when this newly-enlightened brand starts speaking as an authority on a decades-old issue it transgressed in the past, and begins to lecture customers, it’s a slam dunk path to brand ridicule.

The reason Body Shop is one of the world’s most successful values-driven brands, is that the issues they embrace are clearly part of their brand DNA – animal rights, fair trade, workers rights and protecting the environment. Likewise the Patagonia brand. Everything the company does is about protecting the landscapes they equip hikers to walk through. So environmental activism is at the heart of their brand, and part of their brand story from the get go.

So when Patagonia confront governments over their environmental policies, and get some flak for doing so, customers not only support their stance, it’s a big part of why they’re loyal to their brand in the first place. And it’s not just a cunning marketing ploy to appeal to their mostly liberal-minded customer audience. They really are committed to the issue, from the founder and the leadership downwards.

So brands should only get behind a particular cause when they already have skin in the game. In other words, if their brand has some relevant part to play in the issue, and their leadership are already walking the talk.

Patagonia’s products are built to last, hence their daring campaign in 2011, ‘Don’t buy this jacket’. The message being, ‘If you already have one, you won’t need another’. Sales rose 30% following the campaign, and while this was an unintended consequence, it underlines how successful values-led businesses are when they are sincere about the issues they embrace.

2. Focus on actions over words.

Recent research has shown that people believe big brands have more power to solve social issues than governments, and expect them to use it. But that means they want big actions, not big words in an ad campaign. Companies need to be active and visible in their customer communities, fighting for their preferred causes, long before they start talking about it in their marketing.

One local example of this is DBS bank. Voted best bank in the world for three years running, one of the main reasons it is consistently voted best bank is because of its focus on CSR and being a good corporate citizen. It’s CEO Piyush Gupta is a staunch believer in the private sector’s capacity to shape society constructively, and his tenure at the helm of DBS has seen it do just that, especially during the current Covid crisis.

It’s offered complimentary insurance coverage and home-loan-payment relief for employees in affected industries, as well as deferred interest loans and support packages for small and midsize enterprises. And there are many other support measures they are digging deep into their own pockets to provide. For Gupta this is just what DBS has always done: “Purpose is perhaps the most overriding thing about our nature and culture. We were formed 50 years ago to help in the development of Singapore. If you look at our old reports, for the first decade, nobody worried about whether the bank was making money or not; all people worried about was whether the bank was contributing to Singapore’s development. That’s deeply rooted in our psyche— to do real things for real people. This value continues to be important.”

‘Cause marketing’ might sound like a great idea, but to work it needs to be preceded by long term action that happens under the radar screen, and be congruent with the brand in the first place. That is why DBS is so respected today.

3. Never act as the moral police of your customers.

Earlier this year, a member of Richard Branson’s Virgin Group, Virgin Trains, banned one of the UK’s most famous tabloids – the Daily Mail – from their trains, because of what they claimed was its editorial stance on issues like LGBT rights and immigration.

Richard Branson, who wasn’t consulted over the decision and reversed the ban, apologised to the Daily Mail and said something very significant about it in his personal blog: “Freedom of speech, freedom of choice and tolerance for differing views are the core principles of any free and open society… We must not ever be seen to be censoring what our customers read, and influencing their freedom of choice. Nor must we be seen to be moralising on behalf of others.” Well said.

That must have been a humiliating climb down for the management of Virgin Trains, and it probably put a big dent in their brand reputation. But they only have themselves to blame.

Even though Richard Branson isn’t a fan of the Daily Mail, his decision to reinstate the paper on his trains, against the views of his own management, earned him a lot of kudos for his principled stand in favour of free speech and against commercial enterprises preaching at their customers.

So here’s a lesson for any brand owner, large or small. Customers don’t want any kind of commercial enterprise either preaching at them or trying to calibrate their moral compass for them. Better for big brands to focus on quality offerings and responsible business practices without shouting about it, even when there’s no promise the public will even notice, let alone applaud them.

The way forward

Summing it all up, just as modern business is moving towards ‘stakeholder capitalism’ where value is shared among employees, customers, suppliers, local communities and society at large, so companies need to realise that today, their brands belong to and are built as much by their customers and the public, as by the company itself.

So while companies should indeed try to make the world a better place, and support worthy causes that make sense for their brand, in considering which cause to support brands should bear in mind the views and values of all their stakeholders – employees, customers, shareholders and the community – and not just those of the C-Suite. That way they will succeed in reinforcing their brand, and building consumer loyalty, as well as building a better world.