In the Q3 update to ZEITGUIDE 2018, we covered how more brands are betting that the exposure gained from embracing activist causes now outweighs any backlash.

Enjoy this free preview from our Q3 digest blow. And for even more insight, order ZEITGUIDE 2018, our annual almanac that includes the book published in January and all quarterly updates, today.

ON THE CEO’S MIND: THE POLITICAL CHIEF EXECUTIVE

In April and January, we discussed how CEOs can better prepare their businesses to handle cyber-threats. It’s just about inevitable that every company will have to deal with a cyber event at some point, but drills, employee training and investments in the latest tech are a few ways for CEOs to reduce these risks.

Since then, another concerning issue has bubbled up, one for which a concrete risk-avoidance strategy doesn’t exist: the constant churn of political events challenging CEOs—and their companies—to take a stance and craft an impactful response.

Notable examples from the past year have included Disney head Bob Igeradvocating for stricter gun laws after the Las Vegas mass shooting, a stance he’s reiterated following ensuing tragedies. During Pride Month in June, you’d be hard pressed to find a brand not marking the occasion either by participating in Pride festivities or donating to LGBTQ+ causes. And the Trump administration policy of separating families attempting to cross the U.S. border illegally engendered widespread backlash that included formal statements from heads of Apple, Airbnb and Microsoft.

These days, brands are more often finding that these issues touch on their businesses directly, creating even more of an imperative to respond. When a Starbucks employee was accused of racially profiling two customers in April, the company shut down all its locations for an afternoon of racial sensitivity training for employees. Walmart, the largest gun retailer in the U.S., joined Dick’s Sporting Goods in raising the minimum age for buying a gun in its stores to 21.

So, What’s Next?

We expect even more of a convergence between politics and brands, despite the risk of losing once-devoted consumers this represents. Taking a firm stand may prove to make good business sense in the long term:

—Walmart’s own internal research found that 85 percent of its shoppers want to see the company “make it clear what values [they] stand for.”

—Younger consumers are particularly interested in the politics of the companies they engage with. Fuse, a marketing firm, conducted a survey of 2,000 teens aged 14 to 17, discovering 67 percent are more likely to buy from companies that support causes than those that don’t. And as young consumers grow in their spending power, so too will the imperative for businesses to take political stands, even at the risk of alienating some other customers.

It’s also important for a company’s employees to feel that their employer is doing the right thing. Pressure from employees led Google to pull out of a partnership, dubbed Project Maven, with the U.S. Department of Defense that involved using AI to analyze videos and images, information that could be used for targeted drone strikes. Amazon has faced pressure to terminate contracts for supplying police departments with facial recognition technology. Ensuring tech, products and services are being used for good is an increasingly important facet of a company’s employee experience (EX) that allows it to remain competitive for top talent.

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