Weighing the Cost of Corporate Activism
“Republicans buy shoes, too.”
This was Michael Jordan’s famous reported (but never actually confirmed) response when then-Charlotte, N.C., mayor Harvey Gantt sought MJ’s endorsement in a 1990 North Carolina senatorial race against Republican incumbent Jesse Helms.
Gantt, a Democrat who served two terms as Charlotte’s mayor, was the first African-American man to ever be elected to that position in the Queen City.
His opponent, long known as “Senator No,” Helms espoused a particularly strident brand of conservatism, and frequently fought legislation that afforded increased civil rights to a number of minority groups.
A blessing from Jordan—NBA superstar and a native North Carolinian whose popularity transcended demographics—could have been a real difference maker for Gantt in an election that he ultimately lost. But whatever he said or didn’t say in response to the endorsement request, Jordan stayed out of the fray.
Over the years, Jordan has carefully crafted a neutral, non-offensive public image. His brand has mostly managed to sidestep discussions of divisive social and/or political topics. In this case, his reluctance to stump for a liberal Democratic candidate may have been based on concern that, in response, right-leaning consumers might shy away from the myriad products and brands associated with him (to include Gatorade, McDonald's, Coca-Cola, Wheaties, Hanes, and many more).
The foundation of Jordan’s athletic empire was built primarily on one product: the Nike Air Jordan basketball shoe. The iconic sneaker debuted in 1984, and still rakes in millions for Jordan and Nike each year, along with all sorts of other apparel bearing the famous Jordan Jumpman logo.
We’ll never know what (if any) effect backing Gantt would have had on Air Jordan sales, or on Michael Jordan the brand. But he might have believed that wading into political waters wasn’t worth the risk. Most companies at the time certainly believed the same—that steering clear of any issue with even a whiff of controversy was always the safe, smart play.
Flash forward to 2018. The current political and social environment seems polarized in ways that we couldn’t have imagined in 1990. Yet many big, well-known brands—including Nike—feel emboldened, even obligated, to take public stands on the explosive issues of the day.
Why the reversal? To start, i4cp research finds that large numbers of consumers and prospective employees more or less demand it. Consider that 46% of nearly 400 respondents to an i4cp pulse survey say they strongly or very strongly believe that organizations should have a stated position on current social and political matters. Given this and other findings from i4cp’s research, it certainly seems that the days when a company could remain a spectator in the cultural debate are long gone.
Taking a calculated risk
There are repercussions that come from speaking one’s mind. Naturally, expressing a strong viewpoint might alienate those who don’t share in that view.
And we’re seeing that this applies in corporate America as well. For example, 65% of respondents to i4cp’s recent survey said they would not buy from a company if they disagreed with that organization’s stated beliefs. Another 62% said they wouldn’t work for a company with a worldview that wasn’t like their own.
Such figures aside, though, we still see most companies avoiding the social and political arena, at least for now. Consider that 56% of employees polled said their employer hasn’t ever taken a public stance on a contentious topic, with 30% saying their employer has spoken out on a touchy subject at some point.
But that trend isn’t likely to hold. And you can count Nike—the brand that has benefited the most from Jordan’s middle-of-the-road persona throughout his 30-plus years as a public figure—as an organization that already falls into the latter category.
The sports equipment and apparel giant launched an ad campaign in 2018 featuring Colin Kaepernick, the NFL quarterback who lit the match on a political powder keg during the 2016 football season. During preseason games that year, he started kneeling as the national anthem played before games, in protest of what he saw as racial injustice in America.
Several players around the league soon joined him in taking a knee for the anthem. And, just as quickly, a heated national debate began. And it’s still raging. Some cheer Kaepernick for using his public platform to exercise his First Amendment rights. Others see red when they see him and other athletes opting not to stand for what they view as a symbolic expression of American pride.
Kaepernick, meanwhile, was released by the San Francisco 49ers the same season he started this movement and has not played a down since.
As a player, Kaepernick might be considered radioactive around the NFL. But Nike has put him front and center in ads celebrating the 30 th anniversary of its defining “Just Do It” campaign.
The tagline for this new campaign? “Believe in something. Even if it means sacrificing everything.”
Kaepernick’s expression of his beliefs might very well mean sacrificing a lucrative NFL career. But Nike has thus far been rewarded for bringing him on board.
Yes, Nike has faced boycotts. But it also saw its stock price soar after the print and TV spots featuring Kaepernick first appeared, and sales have spiked since Nike’s late-August announcement that Kaepernick would be part of the new campaign.
Knowing the marketplace
The risk Nike took was a calculated, informed one. Nike’s leadership knew their customers, they knew their target market, and they figured they were likely to emerge relatively unscathed.
Nike and its connection to Kaepernick may be the most high-profile case of a company that’s made this kind of bet by staking out a position on a hot-button subject. But there might not be a better example of an organization that wears its beliefs like a badge—or a nice winter fleece—than Patagonia Inc.
In 2018, the Ventura, Calif.-based outdoor apparel retailer launched Patagonia Action Works, a digital platform designed to connect Patagonia customers with environmental action groups in their communities.
More recently, Patagonia CEO Rose Marcario announced that the organization will donate $10 million it received in federal tax cuts to various organizations “committed to protecting air, land, and water, and finding solutions to the climate crisis,” according to a statement from Marcario.
In that same statement, Marcario describes the corporate tax cuts initiated by the Trump administration as “irresponsible.” She also cited Trump’s refusal to accept the findings of an especially grim climate change report as a key factor in Patagonia’s decision to put this $10 million “back into the planet.”
This isn’t the first time that Patagonia has taken on President Trump. The company previously sued his administration in an effort to block its attempt at significantly reducing the size of several national monuments—protected sites long considered historically, geographically, or culturally important—and opening the land up to commercial development and activities such as mining and logging.
All of these developments have occurred in the past 12 months, so it’s too early to say what if any long-term impact such moves will have on Patagonia’s sales. But there must surely be some Patagonia customers who love quality micro-puff hoodies, but don’t like some of the social and political stances the company has taken. Just as some consumers out there can’t stand the trend that Colin Kaepernick started on NFL sidelines, but still lace up their Nikes when they hit the gym or go for a run.
We’ll see if that holds. As one participant in the i4cp survey made clear in a written response when asked about organizations taking political or social stands, this isn’t a cut-and-dry issue.
“It’s complicated. I avoid certain companies whose beliefs I strongly disagree with yet tolerate others where I am mildly opposed.”
Not every company that entrenches itself on one side of an issue might come out completely clean.
But customers are increasingly interested in aligning themselves with brands they believe have a worldview similar to their own. And, as i4cp’s research makes clear, an organization could ultimately pay a steeper price for staying silent about its views than for speaking out on them.