Fortune CEO Initiative: How to take a stand and the role of business in society

When organizations take a stance on societal issues, they almost always find themselves at odds with some of their own stakeholders, especially at a time when almost every issue is politicized.

at wealthAt last Thursday’s CEO Initiative Summit in Palm Beach, Fla., a group of business leaders discussed how companies can lead with purpose, even if they can’t always make everyone happy. Citing events ranging from the death of George Floyd to Georgia’s controversial 2021 election law revision and more recently the repeal of Roe v. calfthe panel did not lack concrete examples of situations in which companies felt compelled to take a stand on a socially important issue.

Bottom Line: Regardless of the circumstances, companies that have clearly defined their reason for existence and communicate that purpose throughout their organization fare much better than those that attempt to step back into social responsibility once a crisis hits.

“Just naming a purpose is absolutely not enough,” said Jessica Orkin, CEO of consulting firm SYPartners, noting that this is just the beginning. While companies need to find a reason for being off their balance sheets, they also need to develop and implement processes to integrate that purpose into business operations and decision-making within their organizations. This ensures that the company’s actions match its words.

This is where companies often fail, said Janeen Gelbart, co-founder and CEO of Indiggo, maker of an AI solution that helps companies execute strategy and purpose-driven initiatives across their enterprise. “When it comes to implementation, things break down, especially at scale and in different regions, because of the lack of strategic clarity at scale,” she said.

Because every organization has different things in different corners, it can prove nearly impossible to imbue every employee or process with the company’s core principles or make decisions that reflect the company’s core values. This breakdown can lead to bad results, in some cases those that make the evening news.

Organizations today have more data and more insight than ever before into where the scaling of an organization’s culture or values ​​is breaking down. But in an era marked by heightened public expectations of companies and a social media environment that can quickly assault an individual or company, business leaders are often drawn into socially or politically charged debates by current events – a problem for which there is no technological solution. In these cases, Gelbart said, there is no substitute for honesty and clear communication.

“I think it’s really important for an organization to articulate their DNA, their values, what they believe in, very, very, very clearly – to make sure they’re not just leaves blowing in the wind trying to trying to please a lot of people or trying to be popular,” said Gelbart. “I think if you can stick to that in the most neutral and central way, it’s easier to defend your choices and what you believe in.”

All panellists agreed that companies that enter the crisis with a clearly defined purpose are far better off than those that try to define their position on societal issues when things are already going sideways.

“When you’ve worked on these things before, you get a lot more credibility and grace from your shareholders than when you get caught doing something and it’s not something you cared about,” Matt McDonald said. President of Penta, a provider of data-driven stakeholder engagement solutions. “You have to do the work when no one is looking.”

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