The executives of America’s leading global brands have an important decision to make. The populist movements around the world has left the global business elite in crisis, with speakers at this month’s Davos meeting lamenting the decline of the neoliberal world. But that may not be true for US business execs. Many Davos attendees remarked on a dramatic shift in attitude among American business leaders. As Harvard’s Lawrence Summers explains, ““I’ve been very troubled by the attitude of business people from the U.S., people who were terribly afraid of what this would mean for America’s place in the world are now hailing those who surround Donald Trump as great geniuses.”
After Carrier was “bully pulpitted” into retreating from its Mexican investment, a parade of companies have lined up behind the administration’s “America First” economics, including major global brands like Dow, Sprint, Ford and IBM. Supporting an administration in hopes of favorable policies like trade protection and deregulation is old school corporate political strategy. But old strategies can back fire in today’s global world where a broad spectrum of global stakeholders - not just national politicians - influence corporate success. And something new is happening that might impact executive’s political calculus.
While populist success in the US, not to mention Brexit, Philippine’s Duterte and France’s Le Pen, point to a retreat of economic globalism; a new Political Globalism is on the rise. Born out of a simple Facebook post, this weekend’s Women’s March on Washington has become a global event and signals an emerging counter weight to the populists.
The day after the inauguration, millions of marchers in 200 cities and 80 countries - including Antarctica – turned out to express an alternative set global political values that include economic inclusion, access to healthcare, individual security, environmental integrity and women’s rights. Led principally by an invigorated female electorate, this event should catch the attention of business execs, as well as male-dominated legislatures.
Business leaders are not blind to the marcher’s concerns. A 2016 PwC survey shows that a majority of execs recognize economic globalism is not helping address issues like inequality or climate change. The World Economic Forum has long argued that global business leaders need to exert “Responsive and Responsible Leadership”, a responsibility stemming from the fact that major global brands control 80% of global profits. But so far business leaders demur, claiming that it is government’s role to make globalism inclusive.
This attitude has consequences. As PwC’s Global Chairman puts it, “Public discontent has the potential to erode trust which is needed for long term sustainable performance… CEOs to have a deeper, two-way relationship with stakeholders, customers, employees, and the public.”
And here lies the challenge for global brands. Through brand building and half-a-trillion dollars in advertising spend, global companies are already in a relationship with global audiences. And by default global brands have become powerful transmitters of global norms and values. Everything global brands communicate either reinforces current norms or alters them. The choices made by global companies impact the lives of many more people than any national government, reaching across the planet in a way no single country can.
So what will your brand stand for in the great globalization crisis? There is no need for altruism to guide your decision. Actively supporting the emergence of a more equitable, inclusive form of globalization that respects human rights and the environment is in the business interest of global brands. Protectionism is a disaster for global brands. Business leaders know this, but surprisingly few actually act on it.
The one executive that is lionized as an example of this kind of global leadership is Unilever’s Paul Polman. “Unilever has a simple but clear purpose”, states the CEO, “to make sustainable living commonplace. We believe that this is the best way to ensure long-term growth.” To do so the company has actively engaging with local communities, NGOs and corporate partners to build a portfolio of pro-social brands. And best of all Unilever’s Sustainable Living Plan is driving business value. The company’s brands that have an integrated social purpose are growing at twice the rate of their traditional brands. They account for half of Unilever’s growth.
Given the success of Unilever one might expect other global brand leaders to pile on, but there is a reason Paul Polman gets so much attention. He is still an outlier.
So what will it be? So far it seems like business executives, in the United States at least, are more willing to knuckle under to the neo-protectionist populists than to stand up for an inclusive form of globalization. This is a mistake. There is an opportunity for global brands to commit to, and contribute to, the forging a global economy founded on global values that ensure shared prosperity and justice. Populism is an historic throwback and commercial dead-end. Take a risk and take a stand for an equitable, prosperous global future. If Paul Polman is any indication, expect your shareholders - and your children - to thank you.
Here's the calculus for the execs leading global brands. Are we going backwards to make the past great again? Or are we going forward?