In an era when corporate apologies are commonplace, CEO resignations no longer surprise us, and frontline employees are held accountable for their personal social media postings, it’s clear that public opinion matters to business today perhaps more than it ever has. Research has shown that even appointed-for-life Supreme Court justices are not immune to worrying about what others think. In such a heightened environment, how can business leaders know whether they’re responding appropriately to public pressure, or being too reactive? How do we decide when to hold the line and when to shift it?
I became interested in public opinion when I began studying how the social context influences organizational leaders. In one research paper, I suggested that feeling accountable to an audience impacts how decision-makers assess the performance of their organizations. Building on that research, I studied public opinion as a source of accountability pressures. By examining Pentagon press briefings from 2003-2006, I found that as
support of the Iraq War dwindled, the briefings talked less about things such as combat, reconstruction, and rebuilding government—key war performance indicators. Public opposition prompted Pentagon leaders to divert attention to other topics such as the war in Afghanistan and the war on terror and thus be less transparent.
Business leaders face similar pressures—often their response is based on intuition and is subconscious. A conformity process takes hold that is analogous to what we often see when individuals are exposed to peer pressure. Just as asserting your independence from your peers can sometimes turn you into an outcast, businesses that go against prevailing views may see their reputation take a hit. The challenge for executives is to overcome the tendency to focus too narrowly on the competitive environment, so they can tune to other external forces weighing on that environment.
I suggest three tips for tackling this challenge:
Enhance your sensitivity to the world at large. Debates and events regarding social issues that may at first sight appear to be peripheral to the nature of your business may take on much greater significance than one might expect. Being able to identify in a timely manner significant public reactions often requires monitoring hotly debated issues on traditional media as well as trending topics on social media. When the Charleston church shooting occurred, most people expected it to fuel public rage around the issues of gun control and racial tensions. But in the space of hours a less predictable issue came up. An article in The Atlantic calling for the removal of the confederate flag from government buildings was shared more than 500,000 times on Facebook and the hashtag #takedowntheflag was used in hundreds of thousands of tweets. Having monitored this tsunami of public reactions, Wal-Mart, Sears, and Ebay, were able to demonstrate sensitivity to public opposition to the flag by quickly banning the sales of merchandise bearing it.
You don’t have to be the first to respond to shifts in public opinion, but you can’t be the last. The first company to take actions that reflect shifts in public views rarely finds that doing so provides a competitive advantage, but being the last company to make a popular change—or, even worse, being the company that goes against public opinion—can be incredibly costly. In response to shifts in public opinion, for example, major corporations have announced unprecedented increases in minimum wages. Small businesses are now facing the decision of whether to conform or to oppose this movement. My research suggests that doing nothing while arguing that an increase in the minimum wage threatens the survival of a small business and hurts the community is a risky approach. But small businesses like Comix Experience, a San Francisco comic book and graphic novel store, that are increasing the minimum wage while seeking ways to deal with the additional costs are putting themselves in a much safer position than those that continue to resist public opinion.
Watch out for conflicts between public opinion and your company’s values. Deeply ingrained company values, norms, or beliefs can make an organization reluctant to acknowledge societal change. Research suggests that decision makers who’ve publicly committed to certain values are more likely to disregard people who disagree, even when those dissenters are key stakeholders. For example, businesses that incorporate religious beliefs in their identity are more likely to oppose new policies regarding same-sex marriage. Consider the case of senior executives at the food chain Chick-Fil-A who justified their opposition to same-sex marriage by evoking strongly held religious values that were key to the company culture. Negative and costly public reactions followed: mayors prevented the company from coming to their cities; suppliers pulled out of deals; and customers in urban areas boycotted the business.
Organizational values that clash with public opinion are particularly risky because they can strain your company culture—your best bet is to recognize such conflicts early and acknowledge them openly with all your key stakeholders, particularly your employees. Simply acknowledging shifts in public sentiment can be a powerful catalyst for change. As mentioned above, the propensity to conform is a universal human tendency, so explaining why a company is at risk of becoming a social outlier can help promote the need for change.