The challenges that arose in 2020 and have continued into 2021 have left many business leaders wondering what comes next and how to react. Many have reacted very positively, as I report in depth in my new book, Social Goodness, and we have seen a huge surge in businesses prioritising ESG. In fact the six largest Canadian banks recently reported that they have added ESG components to their CEO’s compensation frameworks.
“From an investment perspective, as well as from a corporate perspective, it’s becoming clear that putting more onus on executives to steer their companies toward a lower-impact future on those types of issues, including climate change, is more and more important,” said Martin Vezer, the researcher who led the study.
Unfortunately other C-suites personnel have reacted badly, with many trying to cut corners and behaving in a less than supportive way towards staff, for example, and some have even tried to make out that they are behaving much better than they actually are. Which is a problem as it is in all our interests for CEOs to stop being asleep at the wheel or succumbing to woke washing because good business is the way of the future – for brand reputation, profits, society’s wellbeing and your own conscience.
Indeed, brands that don’t sort out their houses and try and fake it are finding that the general public (i.e. clients) are increasingly likely to take them to task – and VERY publicly.
Post-pandemic people are reacting fiercely to bad businesses
What was noticeable about 2020/21 is how people have come together to challenge and publicly call out and even boycott brands that are behaving badly, to the point where reputations get damaged and advertising agencies have started saying ”Hmm this whole equality and save the thang is really becoming important, perhaps you, our clients, should get a handle on that rather than trying to just sell stuff?”
Trouble with that of course with that, as highlighted recently by legionary copywriter, Steve Harrison, in an article entitled “Why adland must rediscover its commercial purpose – and play its part in the post-pandemic economic recovery”, is that most brands are still pretending to be committed to playing their part in making the world a better place. And so they end up sounding fake, because they are woke-washing, and as a result their adverts haven fallen far short of effective and, as I highlight in Social Goodness, end up being very bad for business instead of good.
This is a BIG problem because in 2021 patience is in short supply and intolerance is rising, and with the 24/7 transparency we now have as a result on digital, brands are increasingly finding they can’t get away with diddly squat.
But shouldn’t brands try and make the world a better place?
Of course brands should try and make the world a better place. Yes, of course they should invest in a sustainable supply chain and embed Social Goodness in every part of their business, because it matters. CEOs absolutely can and should be superheroes, leading the charge.
Yet many CEOs and business leaders are still pretending to be heroes without actually digging out that superhero cape and investing in doing the work. Just jumping on the bandwagon without doing the work is not a smart decision because Social Goodness matters to people because we have a world to save and we are all increasingly anxious and concerned. People are prioritising it in all aspects of their lives and choices and as a result they are increasingly reacting very badly to brand bad behaviour and to fakery of all sorts.
Bad behaviour comes in many guises, but mistreating staff is something that tends to be consistent alongside any other bad behaviour. Recently there have been a slew of new cases. Goldman Sachs, for example, has a reputation for prioritising profits above anything else and until recently graduates were falling over themselves for a chance to earn a share of those profits. However, reports of a toxic culture have been rumoured for a while and seems this ramped up during the pandemic. Then a survey of their junior staff was leaked and was all over social media within hours. In it the staff claimed workplace abuse, saying they were regularly expected to work a 90-110 hour week, and only had four hours sleep a night. They asked – begged – to be allowed to work JUST an 80-hour week (let’s just repeat that – just an 80-hour week). On a scale of 1 to 10, the analysts rated their mental health as a 2.8 and their physical well-being as a 2.1, compared with 8.8 and 9.0 respectively, before starting at Goldman. Seventy-seven percent of respondents said they felt like they had been a victim of workplace abuse.
“What is not ok to me is 110-120 hours over the course of a week! The math is simple, that leaves 4 hours a day for eating, sleeping, showering, bathroom and general transition time,” one analyst said. “This is beyond the level of ‘hard-working,’ this is inhumane/abuse.”
Predictably the backlash was huge.
The CEO, David Solomon, then stated that the company would enforce the no-work Saturday policy. The reaction to that small concession hasn’t been good either, nor to the recent announcement that the leadership teams sent snack boxes to staff, which is in stark contrast to the ‘thank yous’ their peers organised, including Credit Suisse, whose bankers are getting a one-time $20,000 bonus for dealing with an “unprecedented” workload during the pandemic, while Citigroup CEO Jane Fraser banned internal video calls on Fridays and introduced a companywide holiday in March called ‘Citi Reset Day’.
Then there was Ikea France, which has ended up in court after it was revealed that they had been spying on their staff, and now British Gas is generating a lot of negative coverage because the business has said that it will be firing any employees who do not accept a 15% pay reduction.
It’s not just restricted to businesses, either: Australian PM Scott Morrison has recently been forced to appoint extra women to his cabinet and other positions after a backlash against his government’s handling of sexual assault allegations in parliament.
Woke washing is a very risky strategy in 2021
A trillion US dollars was invested into ethical brands in 2020 for the first time and, as already noted, a good ESG profile is a tick of approval that means a business can attract more investment because it’s what people want in 2021. Therefore it’s clearly very tempting for CEOs and business leaders, as well as their advertising agencies, to try and just bandwagon it to try and get some of that action, especially when they have seen profits knocked or debts rise as a result of the pandemic.
It’s an increasingly risky strategy.
It might have worked 10 years ago before the world became so interconnected and social media meant that everything is on view 24/7 and there is no place to hide. Now in 2021 it’s really easy to get found out and if that happens the backlash can be severe – as has been seen with the revolt of bond investors over bogus green debt flooding the market.
We also saw the Deliveroo stock drop by more than 30% following its initial public offering mainly because of labour practices i.e. the business floundered because investors didn’t like the way it treats its people. Another sticking point was the way it has structured the board to give outsized voting rights to its founder, Will Shu.
BlackRock is another example. They are currently battling the bad reputation fallout from a social media campaign by Greenpeace and others against their investment in businesses that are destroying the Amazon, despite claiming that they’d ceased. Then there is Burger King, who recently had to remove their controversial #IWD ‘Women belong in the kitchen’ tweet and publicly apologise after it generated an almighty outcry. It wasn’t just about the tweet by the way, but resulted in every aspect of the business being dissected on social media, from the makeup of the board (mostly male as you’ll have obviously guessed) to their staff pay (mostly very low) to the (questionable) protection of the female employees against sexual harassment.
Time to invest in that superhero cape
The old fashioned macho ‘treat people and the environment badly’ toxic culture obviously continues apace in some quarters, despite all evidence to the contrary that it is not approved of by, or working for, most people or this planet we call home. You’d think they’d have noticed how much the world has shifted in the last 18 months, how much backlash they are likely to get, how people will boycott them, and see how the good people will avoid working for them… but I guess if you are in an insulated bubble then you’ll only see what’s immediately in front of you.
In short, it seems many CEOs have yet to find, let along put on, their superhero capes. Many are still end up winging it (to put it politely) or woke washing (not so politely) and then finding out “Surprise!” that people notice. That people don’t like it. That people – clients – rally, boycott, rally others to boycott, and attack.
That not doing the good thing – the ethical thing – can backfire very badly.
In contrast those businesses have been investing in good practice, sustainable supply chains, people’s wellbeing, etc, are reaping the rewards in all ways – including staff happiness, loyalty and productiveness, increased profits, enhanced reputation, and increased customer trust and retention.
Then there’s the point – which often seems to get missed for some reason – that businesses are not separate to the world. Business is part of society and world. Anything that happens within society and the world affects BUSINESS, and so it is in company leaders’ best interests to work for the good of society and the world.
So, all you CEOs, business leaders, entrepreneurs, business owners, time to get your superhero cape and put it on.
Your time to be superhero is NOW.