How to think about what to stand for in a changing world

By: Dain Dunston and Inna Ulanova (February, 2021)

In the summer of 1990, a few executives of the Coors Brewing Company in Golden, Colorado, were meeting in a corner office. Nestled in the foothills of the Rocky Mountains north of Denver, it was a magnificent setting for the corporate strategy discussion that was unfolding.

“It’s unfair!” one of the executives, known for his short fuse and lively temper, was shouting. The topic was the pressure and criticism being leveled against Coors and other major breweries for not taking a stand against drunk driving. The executive’s rant centered on a very important point, that beer companies were not responsible for what customers did with their product. This was a few years before the famous “Friends Don’t Let Friends Drive Drunk” campaign sponsored by the Ad Council, and the public was just beginning to think about drunk driving as something that was no longer funny.

“We’re not responsible when people drink and drive,” the executive was insisting. The third time he repeated the statement, a visiting consultant raised his hand and offered a thought.

“It’s true that Coors is not responsible when someone drinking your product kills someone. But you could take responsibility for solving the problem.” It’s not clear what effect the comment had that afternoon – it was probably only one of many they heard that year – but within a year, the company was increasing its messaging in ads to “Drink Responsibly.”

While they weren’t technically responsible for the actions of individual drunk drivers, they could take responsibility for the growing national problem and for changing how people thought about the issue. That one change of mindset (multiplied across many companies and many public messages) has saved millions of lives.

That’s the disruptive power of responsibility.

The Changing Face of Corporate Responsibility

In 1899, an aging man in a turban walked into the Pittsburgh offices of Charles Page Perin, one of the U.S. Steel industries most respected consulting engineers and made him an offer. “I want you to come to India with me, to find suitable iron ore and coking coal and the necessary fluxes. I am going to build a steel plant in India. Will you come?”

Perin’s guest was Jamshetji Tata, the patriarch of Tata & Sons, and one of India’s emerging industrialists. Perin was dumbfounded by the audacity of the request from this unknown caller, but he was struck by “the character and force that radiated from Tata’s face. And the kindliness, too.” He said yes on the spot and the Tatas were on their way to much more than a steel plant. They were on their way to the creation of India as an industrial state that could build its own powerplants, coal mines, and steel mills; and, later, its own railroads, cars, and trucks.

The Tata’s saw their responsibility very clearly: for India to gain independence, it would need its own industrial infrastructure. And because they planned all their business ventures to support that strategic purpose, they became known as “industrial Gandhis.” That’s a powerful sense of corporate responsibility.

Today, the Tata Group, founded in 1868, sees itself as India’s only value-based corporation. They see their mission – their “original intent” – as the improvement of quality of life in the more than 100 countries in which they operate. (For more on this remarkable company, read Nanovation: How a Little Car Can Teach the World to Think Big by Kevin and Jackie Freiberg and Dain Dunston.)

It is a cliché to say that the only thing leaders of global corporate entities care about is this quarter’s numbers. Organizational leaders are human beings with diverse interests that may enlighten their personal decisions. But it is true to say that recent efforts by business leaders to guide their organizations to take public positions reflect a new evolution of leadership thought.[i]

[i] The Creation of Wealth, R.M. Lala, Penguin Portfolio, 1981

Leading in a World of “Theoretical Warfare”

The father of one of the authors is an émigré from Soviet Union, a businessman who settled in Pittsburgh, Pennsylvania. He describes the “Cold War” between the US and the USSR as a “theoretical war,” a mindset war based on theories that were variously demented or mis-informed: conspiracy theories, societal theories, economic and historical theories.

Today, we are in a similar situation, with governments, political parties, and large populations devoted to theoretical views of reality which are driving policy in directions that seem to be having the effect of destabilizing our global social and economic orders.

How do leaders of business, healthcare and educational organizations respond to this crisis-laden environment? How do they communicate their direction and their commitments to stakeholders and the communities they do business in?

A Press Release is Not a Stand

In the wake of the killing of George Floyd in Minneapolis in the spring of 2020, many leaders of public and private institutions felt a need to speak out in support of minority populations – particularly Black – in their communities. They promised to commit to fairness toward employees, customers, and their communities. For many, if not most, of these leaders, the statements were genuine. Many major US corporations and institutions have been talking about diversity for decades. Some have made significant progress in providing better opportunities for women and minorities, and most have a long way to go.

The responses varied from simple posts on social media to emails to customers and employees to CEO videos decrying the state of racism in America and pledging to take variety of steps to combat systemic racism. But beyond the communications, it is unclear what changes were actually put into action.

What was the public reaction to corporate messages on race? In a June 2020 survey by JUST Capital and The Harris Poll, 84% of respondents favored CEOs and other high-profile business leaders communicating a stand on ending police violence and condemning killings of unarmed Black people by the police. Only 16% opposed such corporate statements.

But beyond releasing statements in support of ending systemic racism, did U.S. companies take action?

Many companies announced specific actions: Quaker Oats announced they were discontinuing their Aunt Jemima brand, an action many observers felt was long overdue. Simply ending the brand without an announcement might have been a more effective message than reminding the public of the inherently racist nature of their branding. Similarly, Mars Inc. said “the time was right” to evolve the visual branding of their Uncle Ben’s product line.

The most common commitments to action involved pledges to hire more Black executive. PepsiCo announced they planned to increase Black managerial positions by 30%, as did Adidas. Many companies made similar statements, but some companies took even more substantial, definitive action. Perhaps most dramatically, NASCAR banned images of the Confederate flag at their races. And further concretely, JPMorgan Chase committed $30 billion over a five-year period to address the racial wealth divide and reduce systemic racism against Black and Latino people.

When a crisis like the nationwide outrage following the Floyd death (and other killings) occurs, what kind of internal and external responses are necessary from the organization’s leadership? And what is the most effective way to think about how to lead through communication and example?

The Root of Responsible is Response

The Japanese teachings of Zen contain a story from 9th Century China regarding a student who asked an aged monk, Yunmen Wenyan, “What is the lesson of an entire lifetime?”

“An appropriate response,” the teacher replied, meaning that the core of responsibility is to know what the moment calls for. The word “responsible” comes from the Latin respondere, meaning, literally, “to pledge back to.” As early as the 1500’s the word was used to connote “answerable” or “accountable.” The word conveys the sense of “obligation” to offer the correct response to any situation.

But what is an appropriate response to a crisis? And what are the consequences, either of responding or of remaining silent? We suggest organizational leaders can identify the right response when they think in terms of three questions.

What are we responsible for?

What are we not responsible for?

What can we take responsibility for?

First, “What are we responsible for?” Beyond their responsibilities to the needs of their shareholders, there is almost universal agreement these days that corporate entities are responsible to the needs of their employees, the needs of their customers and the needs of the communities in which they do business.

Second, “What are we not responsible for?” That seemingly straightforward question is tricky, as many White Americans came to realize as they became engaged in deeper conversations on the nature of racism and the role the members of the majority play in supporting – or at least not tearing down – the structures of racism. In our deeply interconnected world, the list of things for which any of us is completely without responsibility seems to be shrinking.

And then, the third question: “What can we take responsibility for?” Beer companies were not responsible for drunk driving deaths. But in time, many “took responsibility” for the issue and worked to change the way the public thought about drinking and driving. JPMorgan Chase who, along with virtually every American bank, played a role in limiting the Black Community’s access to credit for homes and businesses, clearly sees that they can take responsibility for reversing the trends that have limited the ability of Black people to build wealth.

Responsibility is more than simply communicating a position. It’s not enough to plant a tree and post photos of your new “green initiative.” You’ll need to water the tree and pay attention to its needs for the right kind of light, the right kind of soil and the right kind of care. Responsibility is about taking right action.

Leading Meaning

In 2015, following a period of civil unrest sparked by police violence against Blacks, Starbucks’ CEO, Howard Schultz, began a series of open forums with employees to share their experiences with race. The dialogues were so constructive that the company decided to take the conversation “to the streets” with a campaign they called Race Together.

Beginning on March 16, 2015, baristas at stores across the United States were asked to continue the conversation on race with customers, writing #RaceTogether on coffee cups before serving them and, if they felt like it, open up a dialogue on race. The company backed up the campaign with conversation starters and helpful hints on how to discuss race with customers. In addition, they launched a nationwide campaign in the press and on social media to support the Race Together initiative.

Unfortunately, the company’s well-intentioned plan was widely mocked and they ended the program in less than a week. While the campaign certainly generated attention, with social media mentions of Starbucks rising 266%, and while some of the public reaction was supportive, a third of it was categorized as “hate.” Instead of bringing the nation together, the campaign simply illustrated the difficulty – and sometimes the dangers – of trying to advocate for tough issues. Many thought the campaign was naïve, some thought it was unfair to the employees, others thought it was unclear what the company’s goal was. As one customer posted on Twitter, “Not sure what @Starbucks was thinking. I don’t have time to explain 400 years of oppression to you & still make my train, #RaceTogether.”

Was the Race Together campaign a failed attempt to take responsible corporate action to solve a social problem? In a case study published by Georgetown University’s Center for Social Impact Communication, the authors pointed out that not only did the campaign not have a negative effect on either sales or stock value, it created a powerful engagement moment between employees and the company.

“There are … compelling reasons why Starbucks should engage race,” the CSIC study concluded. “First, people engage with their favorite brands more often than with government or nonprofits. Why not leverage the opportunity? The second is the cause of social activism pairs naturally with the modern success of the corporation. If a company is to be socially responsible, why not extend that contribution to social activism? Who is better poised to trigger social change than a corporation which is an organized, collective body designed to take and manage risks better than any other organized human endeavor can?”[i]

Inherent in the decision to launch the Rise Together campaign was the understanding of responsibility for racism, that racism wasn’t a problem that “racists’ needed to fix, that it was stitched throughout the fabric of society. And because the company has both a diverse workforce and a diverse customer base, they believed they could take responsibility for a conversation that would lead to new ways of thinking.

Did it succeed in that? The answer is yes, according to Corey duBrowa, Starbucks’ SVP of Global Communications. “The response from our employees,” he told the CSIC authors, “ was unreservedly positive. The one question that kept arising in each and every forum was “what else can WE do?”

[i] The Rise and Effect of Corporate and CEO Activism: An Analysis of Starbucks #RaceTogether Campaign, Georgetown University Center for Social Impact Communication, Authors: Aditya B. Veera, Lisa Puckett, and Ali Murshed. Faculty Advisor: John D. Trybus

Is Our Idea of Responsibility Changing?

There’s no doubt that over the past decades, we’ve seen a profound shift in the expressed purpose of business organizations. While the term “Corporate Social Responsibility” has been with us since the late 1960s, over time it has become conflated with “charity.” But social responsibility is more than encouraging employees to contribute more to United Way this year.

We favor the term “corporate societal responsibility” and believe it is consistent with the general acceptance that public companies have a responsibility to the common good, whether that means working towards zero-emissions production, communicating how to stay safe in a pandemic or shining a light on systemic racism and working to build a more inclusive business experience for customers and communities.

In a time when government institutions aren’t always able to reflect good leadership, the public is looking to the companies they work for and do business with to behave better. After all, the United States may be able to pull out of the Paris Climate Agreement, but United Parcel Service and United Airlines can’t. They can’t, because they understand they have a responsibility to do business win the real world and a responsibility to consider the effects of their actions on the future of society. They understand that responsibility is action, not simply the communication of sentiments.

Does a Public Company Have a Responsibility to Society?

Some say yes, some say no. But ask the question another way: do you and I have a responsibility to society? The answer is absolutely yes. We evolved as homo sapiens because that responsibility is literally in our DNA. When you see a toddler in the street, you don’t tweet a picture, you run out and grab the kid. But when we exempt our organizations from acting for the greater good, we create mob rule. That’s when we get cigarette companies who hide evidence that smoking causes cancer, oil companies who hide the proof that engine emissions create climate change, or beer companies who think drunk driving isn’t their problem. Our sense of societal responsibility, when it is healthy, leads to leads us to seek better outcomes.

In other words, at any moment, we are responsible for “an appropriate response.”

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[1] The Creation of Wealth, R.M. Lala, Penguin Portfolio, 1981

[1] The American Public Wants Companies to Take Action on Advancing Racial Equality – Report on JUST Capital/Harris Poll, July 9, 2020

[1] JPMorgan Chase Commits $30 Billion to Advance Racial Equity – press release, Oct. 8, 2020.

[1] The Rise and Effect of Corporate and CEO Activism: An Analysis of Starbucks #RaceTogether Campaign, Georgetown University Center for Social Impact Communication, Authors: Aditya B. Veera, Lisa Puckett, and Ali Murshed. Faculty Advisor: John D. TrybusYour Content Goes Here

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