Decision Vision Episode 172: Should I Align My Company with a Political Position? – An Interview with Peter Baron, Carabiner Communications
If a company chooses to align with a political position, how does it impact revenue? Do consumers care more about their products than their politics? Peter Baron, CEO of Carabiner Communications, and host Mike Blake come to some interesting thoughts on this topic while considering examples of companies that have taken strong political positions such as Nike, Disney, and others. They discuss the kinds of influence companies engage in, what might factor into a board’s decision to take a position, the role of diversity on a board, the impact of “easy outrage,” and much more.
Carabiner Communications is a leading full-spectrum marketing and public relations firm. Founded in 2004, Carabiner Communications has a proven history of helping companies tell their most engaging stories and navigate a path to success. As their name implies, the agency helps B2B tech and healthcare organizations get connected to their targeted audiences and the influencers who have their ear.
The Carabiner team is comprised of experienced professionals whose services include messaging and branding, content development and marketing, public relations, lead generation, and more. They are known for being strategic, cost-effective, and always ready to partner with great companies to drive sales.
Peter Baron, CEO, Carabiner Communications
Although Peter began his career with a large PR agency in NYC, he ultimately found his way to the warm and sunny South and made it home. True to our agency name, he is one connected guy—some folks think he knows pretty much everyone in the Atlanta tech community. Peter is typically the Carabiner you’ll run into at conferences and networking events, where he’s friendly, open, and loves to talk about the latest technology trends or his large family.
While Peter drives agency direction and business development for Carabiner, he also consults frequently on accounts and offers high-level campaign strategy. He loves to brainstorm! Peter enjoys the great outdoors, including hiking, kayaking, and camping.
Fun fact: You may not realize it since he dropped the accent years ago, but Peter is from “across the pond”— he’s an expatriate of the U.K.
Mike Blake, Brady Ware & Company
Michael Blake is the host of the Decision Vision podcast series and a Director of Brady Ware & Company. Mike specializes in the valuation of intellectual property-driven firms, such as software firms, aerospace firms, and professional services firms, most frequently in the capacity as a transaction advisor, helping clients obtain great outcomes from complex transaction opportunities. He is also a specialist in the appraisal of intellectual properties as stand-alone assets, such as software, trade secrets, and patents.
Mike has been a full-time business appraiser for 13 years with public accounting firms, boutique business appraisal firms, and an owner of his own firm. Prior to that, he spent 8 years in venture capital and investment banking, including transactions in the U.S., Israel, Russia, Ukraine, and Belarus.
Brady Ware & Company
Brady Ware & Company is a regional full-service accounting and advisory firm which helps businesses and entrepreneurs make visions a reality. Brady Ware services clients nationally from its offices in Alpharetta, GA; Columbus and Dayton, OH; and Richmond, IN. The firm is growth-minded, committed to the regions in which they operate, and most importantly, they make significant investments in their people and service offerings to meet the changing financial needs of those they are privileged to serve. The firm is dedicated to providing results that make a difference for its clients.
Decision Vision Podcast Series
Decision Vision is a podcast covering topics and issues facing small business owners and connecting them with solutions from leading experts. This series is presented by Brady Ware & Company. If you are a decision-maker for a small business, we’d love to hear from you. Contact us at firstname.lastname@example.org and make sure to listen to every Thursday to the Decision Vision podcast.
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Intro: [00:00:01] Welcome to Decision Vision, a podcast series focusing on critical business decisions. Brought to you by Brady Ware & Company. Brady Ware is a regional, full-service accounting and advisory firm that helps businesses and entrepreneurs make visions a reality.
Mike Blake: [00:00:22] Welcome to Decision Vision, a podcast giving you, the listener, clear vision to make great decisions. In each episode, we discuss the process of decision making in a different topic from the business owners’ or executives’ perspective. We aren’t necessarily telling you what to do, but we can put you in a position to make an informed decision on your own and understand when you might need help along the way.
Mike Blake: [00:00:44] My name is Mike Blake and I’m your host for today’s program. I am the managing partner of Brady Ware Arpeggio, a data-driven management consultancy which brings clarity to owners and managers of unique businesses facing unique strategic decisions. Our parent, Brady Ware & Company, is sponsoring this podcast. Brady Ware is a public accounting firm with offices in Dayton, Ohio; Alpharetta, Georgia; Columbus, Ohio; and Richmond, Indiana.
Mike Blake: [00:01:08] If you’d like to engage with me on social media with my Chart of the Day and other content, I’m on LinkedIn as myself and @unblakeable on Facebook, Twitter, Clubhouse, and Instagram. I also host a LinkedIn Group called Unblakeable’s Group That Doesn’t Suck, so please join that as well if you would like to engage.
Mike Blake: [00:01:26] Today’s topic feels extremely timely, and I wish I could tell you that on May 31st I had the foresight that the topic was going to be so timely as it is, but I can’t. Sometimes just things work out. I don’t want to use the word luck, because given where we are, that’s not a term I’m very comfortable with.
Mike Blake: [00:01:51] But the topic today is, Should I align my company with a political position? And whether you find yourself on the left or the right of the political spectrum, I think few people would argue that we are in an unusually fractured political environment, which is spilling over into the social environment. And as a result, competing ideologies are now competing for whatever power, influence, resources they can muster in order to ensure the outcome of a society that they deem ideal, or at least as close to ideal as is humanly possible.
Mike Blake: [00:02:43] And I’m old enough to remember apartheid in the movement against American companies, or rather the social movement that were protesting companies that would continue to do business with South Africa, because people felt that in doing so, you are propping up the apartheid government there. And, of course, in the late ’80s, early ’90s, the apartheid government went away. South Africa is now what it is today. But that’s an early example of social activism, at least in my memory. Social activism, putting pressure on companies to take a specific position.
Mike Blake: [00:03:24] And, now, in recent history and, frankly, as current events, we see quite a bit of that. There was a fairly extraordinary step of Nike deciding to go all in with Colin Kaepernick. A move that I thought was risky. I still think it was risky. But it did work out for them. It turns out the 100 people or so that burned Nike shoes on YouTube were probably about the only 100 customers they lost. And their stock price has gone through the roof ever since. And one of the object lessons there is you have to be careful just because you see somebody on the media saying something or doing something, that doesn’t mean that there’s a critical mass of support behind it.
Mike Blake: [00:04:11] And more recently, we have seen the fight between the government of the State of Georgia and Disney. And, now, and we’ve seen it with companies lining up on two sides of the Russia-Ukraine war. Most now, I think companies, some of them somewhat belatedly, and even perhaps begrudgingly, are choosing to withdraw from Russia as a show of support for the Ukrainians in that particular war.
Mike Blake: [00:04:43] And now that we find ourselves in the wake of the Texas school shootings and the Buffalo hate crime shootings, the next battleground clearly is going to be gun control. And then, later this year, it’s a drop dead certainty that abortion is going to be a position that consumers are, frankly, just going to demand that companies take a position on.
Mike Blake: [00:05:11] I remember in college, Peter Elich, a practicing Catholic, was very supportive of anti-abortion causes. And that did hurt for a long time Domino’s position in the college market, which tend to skew more liberal.
Mike Blake: [00:05:31] But the point is that, to my mind anyway, this notion of companies that are going to be asked to take a public political position, and not only take a public position, but actually act on it, possibly to the short term apparent detriment to their businesses, I think, is something that is likely here to stay, at least for the medium term. And that means that as business owners, as business decision makers, and advisors, we’re going to be in a position of making that decision, like it or not, and helping other people make that decision.
Mike Blake: [00:06:04] And so, joining us today to help us understand at least his perspective on this, and I think his perspective is quite valuable and learned, is Peter Baron, who is CEO of Carabiner Communications, which is a leading full-spectrum marketing and public relations firm.
Mike Blake: [00:06:19] Founded in 2004, they have a proven history of helping companies tell their most engaging stories and navigate a path to success. As their name implies, the agency helps B2B tech and health care organizations get connected to their targeted audiences and the influencers who have their ear. The Carabiner team is comprised of experienced professionals, whose services include messaging and branding, content development and marketing, public relations, lead generation and more. They are known for being strategic, cost effective and always ready to partner with great companies to drive sales.
Mike Blake: [00:06:50] Although Peter began his career with a large public relations agency in New York City, he ultimately found his way to the warm and sunny South and made it home. True to the agency name, he is one connected guy. Some folks think – and I’m one of them – he knows pretty much everyone in the Atlanta tech community. And as an aside, they like him. A lot of people like that, they don’t necessarily like them. That’s an important distinction. Peter is typically the Carabiner you run into at conferences and networking events where he’s friendly, open, and loves to talk about the latest technology trends or his large family.
Mike Blake: [00:07:24] While Peter drives agency direction and business development for Carabiner, he also consults frequently on accounts and offers high level campaign strategy. He loves to brainstorm – and I can attest to that. He also enjoys the great outdoors, including hiking, kayaking, and camping, great places for brainstorming. And fun fact, he may not realize it, since he dropped the accent years ago, but Peter is from across the pond and he’s an expatriate of the United Kingdom. Your Majesty, Peter Baron, welcome to the Decision Vision podcast – or Your Excellency.
Peter Baron: [00:07:54] Thank you. Thank you. It’s so good to be here. Thanks, Mike.
Mike Blake: [00:07:58] So, great to see you again. And thanks for coming on to talk about, frankly, what I think is a very difficult topic. And I imagine if you’re not getting questions about it now, you’re going to quite a bit. Businesses seem to be more willing to align themselves with political causes, I think, than they have in the past. Do you agree with that observation? If so, why do you think that is?
Peter Baron: [00:08:25] I think so. It’s certainly more visible than it has. But I think the thing to realize is not necessarily because of PR guys like me. And I’ve been doing this since 1985, so it’s been a few years. And I think back to my education and the things that we were taught. It led to sort of a discipline in the boardroom or at least in the corporate communications team where these kinds of things have been discussed and thrashed around for a long time because what, ultimately, I think you’re trying to do as a business is either try to control your business environment or operate well within an environment.
Peter Baron: [00:09:08] So, the fact that this topic has come up and the companies might be feeling more pressure is interesting. But over the arc of time, I think you see that companies have tried to stay ahead of this curve and you know that they’re working pretty hard right now to figure out what they want to do. And so, when the pressure comes publicly, it’s not unanticipated would be my thought.
Mike Blake: [00:09:37] So, one question I have is, just because we observe something doesn’t necessarily make it true. But are companies in actuality becoming more active in the political discourse in our country? Or have they been all along realistically and it’s simply becoming more visible than it has been?
Peter Baron: [00:10:00] I think they’ve probably been involved all along. I made a couple of notes in preparing for the show, and it’s interesting to quantify some things. But if you think about being aligned or involved with political causes, there are a number of ways to do that. One is publicly through your messaging and how you get involved. Another is what you do behind the scenes with your dollars.
Peter Baron: [00:10:24] So, lobbying, for instance. And when you look at lobbying, I wanted to see what was going on in terms of increasing dollars. So, in 2021, the total lobbying spending in the United States amounted to $3.73 billion. And this was an increase from the three-and-a-half billion the year before.
Peter Baron: [00:10:49] And the leaders in terms of spending were the National Association of Realtors, which is fascinating. I mean, this is kind of an interesting time to buy and sell homes. The next group was the U.S. Chamber of Commerce. The next is the Pharmaceutical Research and Manufacturers of America. And then, the last one was the American Hospital Association.
Peter Baron: [00:11:14] So, you know, spending a good bit of money. Pfizer spent 10.9 million on lobbying in 2020. I mean, you could argue at a time when companies that were producing a COVID vaccine didn’t really need to spend a lot of money. They were making a lot of money. But, yeah, they’re still applying their dollars in the halls of Congress or, perhaps, even on a state level. So, that’s, to me, evidence of how businesses really play in the political spectrum.
Peter Baron: [00:11:48] But I know our show is probably more about what we’re seeing in the news right now. So, the public pressure to play, I think, realistically they’re being pretty sophisticated players.
Mike Blake: [00:12:01] Well, you know, I do think those two things are linked. I agree with you, they’ve been playing all along through lobbying. And lobbying, to me, is kind of interesting. Nobody likes lobbyists unless they’re lobbying for something that you care about and agree with. And lobbying is also quite opaque. I’m sure it’s happened, I just can’t remember, but I can remember the last time a specific company – a trade association, yes, like the NRA, sure – has been taken to task over their lobbying activity. I don’t think, for whatever reason, it’s not considered a part of the brand or maybe it’s just simply on some level expected once your company achieves a certain critical mass.
Mike Blake: [00:12:53] But beyond that now, what are you seeing companies considering as actions they might take to go beyond simple lobbying? And I’ll put campaign donations in sort of the same bucket because they’re not quite as visible. What steps are they considering taking now?
Peter Baron: [00:13:11] Lobbying and donations, of course, are the first two things that you see. But activism and encouraging their workforce to do something. This is not a particularly charged example, but you’ve got a lot of companies that like to steer their employees into doing things. Like Habitat for Humanity, Home Depot, doing these crews where they go out and help build homes. I think that’s more of a grassroots effort. There are lots of companies doing that.
Peter Baron: [00:13:48] Many of them are forced into doing things with compliance. So, you look at environmental, social, and governmental ESG, compliance requirements in the construction space. And I’m not an expert there, but I read a little bit about it recently. But there were a lot of requirements for LEED buildings. These are buildings that are built using standards that indicate that the materials are sourced reasonably locally and that sustainable methods are being used. A lot of those things have been now encoded into regulation on the state level, county level, but also on the federal level too.
Peter Baron: [00:14:27] So, in terms of actions that companies are taking, some of them are not voluntary, they’re compliance oriented. And I guess if a company doesn’t like the requirements, then you have to circle back to the lobbying and say, “Well, what you’re asking for me to do here on a lawsuit is an opportunity.” And there are certainly a lot of actions taken into the legal sphere.
Peter Baron: [00:14:55] Boards, you do find board members being involved. It used to be that the board members were encouraged to be on the symphony board just to get some public exposure or to be good citizens in their communities. But, now, board members are bringing their influence to bear, and other organizations too. I’m not sure they’re on political campaign committees.
Peter Baron: [00:15:19] But I guess it was in 2010, the Supreme Court said the companies could make direct investments in presidential elections. When a company takes a decision like that, that’s going to be an interesting discussion in the boardroom, who do you decide to pick? And maybe there’s a majority owner, but can you imagine it as sort of a diversely held public corporation if one of those is going to endorse a political candidate or not. That’ll be a fascinating discussion.
Mike Blake: [00:15:55] Yeah. And I want to come back to that, because I do think that’s an interesting part of the discussion. But before I do, you used a word, which I think is critically important, I want to kind of go back to and drill down on, which is influence. I speculate, but I don’t know – I don’t have the data to support this. I don’t know the data exists – that at least some of these politically oriented activities are intended to simply gain influence in government rather than embrace, or espouse, or promote a particular political position.
Mike Blake: [00:16:31] Indeed, I think I’ve seen a number of instances where the same company has made campaign donations to the two opposing candidates in the same election. In some respect, that tells me that they don’t really care who wins. They just want to make sure that whoever wins is going to take their phone call.
Peter Baron: [00:16:51] Yeah. It’s kind of a funny fact now that Trump has come and gone. But prior to Trump running for president, 50 percent of his donations went to the Democrat Party and the other 52 Republican. I mean, that kind of underlines your point in kind of a highly public funny way. I do think that, yes, maintaining a business environment is one of the sort of top responsibilities for any of these big businesses.
Peter Baron: [00:17:24] But as you were reading the introduction to the show, you talked about unique businesses. And I think a lot of our discussion so far has involved big businesses, highly public. But when you talked about unique businesses, I thought, well, if I’m driving along the road going somewhere, I’m usually in traffic with vans that belong to plumbers, and electricians, and dry cleaners, and legitimate businesses that are beholden to their customers. And they wake up every day trying to find parts so they can fix things, or source products so they can sell them and install them, and trying to do good work and try to hire people. And, you know, we never know or ask what causes they’re supporting.
Peter Baron: [00:18:12] So, part of the discussion that’s interesting is, what part of our economy, which is mostly small businesses, even care about this and what level does it become? Do you have the luxury, for instance, of trying to be somebody that’s being a leader in this space?
Mike Blake: [00:18:30] Now, that circles back nicely, I think, to the question about the boardroom is that, how do you suppose – maybe you’ve been in those discussions. I have not – those discussions go? Is it a CEO, or is it a board member, or a member of the executive team and says, “Hey, our company has an obligation to take this particular stance.”
Mike Blake: [00:18:57] And it seems to me there are really two questions to be answered. Number one is, do we want to take and spend shareholder capital on any stance at all? And then, B, you’re going to pick a side. How do you do that? What are the implications? How do you even broach that? I mean, just that conversation internally, unless you’re really sure that everybody is just aligned, that has the capacity to destroy a management team in about a-half-an-hour, doesn’t it?
Peter Baron: [00:19:28] That does. And you should have a board that has diverse opinions where they can speak openly and debate with one another but, hopefully, reach a consensus at some point. One thing that I’ve observed over time is that, large corporations spend a good bit of time and money on risk evaluation. And this information is regularly discussed in board meetings. And so, this sort of climate – unless you’re brand new to a board – if you’ve been on a board for a number of years, every meeting, you’ve got this sort of evaluation of risk and the climate that they’re involved in. And so, their comments are always going to be made inside of that sort of soup mixture.
Peter Baron: [00:20:18] So, the question I would have is, given that you understand what the primary risk factors are for your business – let’s say you’re Georgia-Pacific and you’re still generating electricity from coal fired plants, or you’re Home Depot and you’re sourcing wood from places like the Amazon – all of these sort of hot button issues, you’re aware of these things from a risk standpoint, and you probably persist in doing them. So, the energy companies that are still getting oil out of fracking operations even though they’re highly unpopular.
Peter Baron: [00:20:55] So, it seems like the business’s persist in doing things the way that they’re currently set up until the point becomes not as big of a risk for them to make a change. Does that sound cynical? I think that’s part of the evaluation that the board is almost required to make, is, when is the right time for us to leave this sort of maybe older, dirtier way of doing things or a way that’s marginalizing a group of people? Is now the right time for us to do that without breaking the company? And there might be some people out there that say, “I don’t care if it breaks the company. Let’s go ahead and do it anyway.”
Mike Blake: [00:21:37] So, you mentioned something else in passing, I think is quite interesting, I want to come back to that. And you talked about wanting boards to be diverse and bring diverse opinions to the table. And I hadn’t thought of this angle before, but now I’m thinking about it. And that is that, I wonder if companies that are willing to take strong political positions – I’m going to use Disney for a moment because Disney is an example where they’re just flat out entering into open conflict with the Florida government. And they’ve basically said, “We’ll go toe to toe. We can match you dollar for dollar in court. And probably can out market you.”
Mike Blake: [00:22:24] I wonder if that suggests that Disney’s board may not be all that diverse. If they are able to take such a strong position that they’re willing to openly confront and, in some respects, I guess, really defy the wishes of the government of their host state, it seems implausible to me that it’s possible to get a truly independent and diverse board in full alignment over such a strong, risky position.
Peter Baron: [00:22:58] That’s interesting. As you were speaking, I wondered that it would be interesting to look at the composition of the Disney board. You can argue – and this is sort of coming from my perspective as an immigrant somewhat. I’ve lived in the United States for a long time. I lived in the West. I lived in the South – I wonder how many people on the Disney board are actually from the South? Do any of them have ties to Florida other than perhaps living there fairly recently?
Peter Baron: [00:23:32] But this is a complete guess on my part, but as a sort of leading entity in the entertainment business, that there are probably more folks from the West Coast generalities – so forgive me if I’m way off here – where positions that they have seen, and growing up with, and become accustomed to, and things that this is natural, everybody should think and feel this way, are not the thoughts and feelings in the positions of a board in Kissimmee, Florida.
Peter Baron: [00:24:12] You get up to that sort of northern part, I mean, Orlando is a big city, but it’s a long way from Miami. I don’t know how far it is from Tallahassee, but Florida is an interesting state as they’re finding out. So, I wonder from a diversity standpoint if the board isn’t more reflective of a non-Florida State mentality – that’s maybe an obvious thing, right? They’re obviously not.
Mike Blake: [00:24:43] I bet you a lot of them come from California. You know, a typical entertainment company.
Peter Baron: [00:24:48] Yeah. That’s kind of what I was implying there. And California does look at the world differently, but California is invading the rest of the country.
Mike Blake: [00:25:00] Well, that’s certainly one position, right? That some are interpreting that California’s, in fact, either they’re invading or they’re using their economic power to promulgate certain viewpoints, I guess. But the fact that they’ve taken the extraordinary step of openly defying a strong Florida Government that, right now, may very well be currently led by somebody who may be the Republican nominee in 2024. And I’m not advocating one way or the other. This isn’t the forum for it. But I do have a curiosity of what the process was and how hard it was to achieve the kind of consensus at the upper levels of that company required to take a combative stand out to that extent.
Peter Baron: [00:25:58] Like you said, I think that’s probably right. There probably was a unanimity – is that the right way to say that? – in terms of thought and philosophy with regards to wanting to take this on like they did.
Mike Blake: [00:26:13] So, I’m going to ask you a very unfair question, because you’re not a sociologist but I know this is something you think about. In your mind, do you have a view as to the social implications of corporations aligning themselves politically like this? Is it in your mind something that can be distorting to society, something that can be helpful, or maybe you haven’t even sorted it through yet. But what do you think are the implications?
Peter Baron: [00:26:44] Yeah. I do have a thought or two. They tend not to be political but social. So, like, I don’t have any TOMS shoes, but I like the fact that TOMS gives a pair of shoes away when somebody buys a pair of shoes. And I think that’s really cool. And there are others that do it with socks or other materials as well. And when you look and you read about some of these companies – I know Zappos is involved with social causes, too – you realize that they’re coming from places where the leadership of the company has genuine concerns and they tend to be apolitical, but wanting to address a broad need, sometimes overseas, sometimes domestically.
Peter Baron: [00:27:34] When you look at a political stance that a company has taken and does that have a social impact? I’ve done a little bit of reading and I’m sort of trying to remember myself, I can’t see that it’s had a sort of overly negative impact.
Peter Baron: [00:27:55] You look at companies, again, not political, but you look at somebody like Chick-fil-A who is probably making decisions from a religious philosophy. Opening their store six days a week instead of seven. They’re the number five fast food company rising in sales all the time. And yet there have been periods through the last few years where there have been boycotts because of the thoughts and beliefs and opinions, or perceived thoughts and opinions, of their leadership. It hasn’t seemed to have affected their growth.
Peter Baron: [00:28:37] There might be people that won’t eat there and never will. But to your point in the opening with Colin Kaepernick and Nike, maybe the 100 people that burned their shoes were the only people that stopped doing business with them. So, I wouldn’t imagine that companies taking political stances in terms of helping or entering their business tends not to be that dramatic.
Peter Baron: [00:29:05] And if you’ve got a second, I found a quote here, this is from a McKinsey report. It’s talking about this is a professor at Northwestern University, Kellogg School of Management noted that in 2019, taking a political stance can be good for business. However, to be successful, the key is for companies to know who they are, and who their core shareholders are, and what those stakeholders believe in. The article goes on to note that we live in an era of easy outrage. But King said that when consumers threaten to boycott a brand, the company’s reputation will generally be affected more than its finances. In that light, it also seems to evolve into an era of great forgiveness.
Peter Baron: [00:29:53] That’s the quote I was trying to find. It’s not only the quote, but it does seem interesting that when people are making decisions about where to spend their money, it doesn’t really seem to make that big of a difference.
Mike Blake: [00:30:03] Yeah. I’ve seen similar data. The Economist had a good article, I’m going to say about three years ago, that basically showed that, for the most part, boycotts don’t work. And the reason they don’t work – I’ll get into the finance geek part of this – it actually boils down to game theory. Because as someone who says they’re going to participate in a boycott, you gain the social approval as if you were actually behaving that way. But because there’s no way to actually check upon your actual behavior, you can still do as you did, but would you still achieve the same sort of social approval or social capital?
Mike Blake: [00:30:47] So, at that point, what is the cost of cheating? What is the likelihood of being caught and basically outed? And so, effectively, there isn’t really no evidence that boycotts impact a company one way or the other.
Mike Blake: [00:31:07] And I suspect, also, to the extent that people are so extreme, that they’ll modify their purchasing decisions. Let’s take Disney. Lots of people have gotten on T.V. and said, “Well, I’ll never go to Disney World again. I’m never going to watch Snow White,” everything else, “we’re boycotting.” But I think our political spectrum is a bell curve. For everybody who says they’re no longer going to do that again, there’s another person on the other side who says, “I’m going to make it a point to make sure that Disney gets all my money at every single opportunity to reward them for the position that they took.”
Mike Blake: [00:31:41] And then, there’s the 99.5 percent of the rest of the population that may express an opinion. But at the end of the day, as economists say, they express their reveal preferences, don’t believe what people say, believe what they spend their money on.
Peter Baron: [00:31:56] Right. Yeah. Those are great points. I mean, you made the Nike analogy earlier. I found a number, Nike’s overall brand value increased by $6 billion after its decision to feature Colin Kaepernick. And that’s an old number. So, businesses are in business to make money. And so, this climate that we’re in with this – what was the quote I used? – easy outrage. What’s making the easy outrage possible? People always had the same temperament or similar temperament to what we have now. But I think we’re in kind of a middle of a movement, almost, where we realize that things can be done for good.
Peter Baron: [00:32:45] Obviously, with the social changes that came in the early days of the pandemic with racial issues, movements were formed and noise made and good changes made. And I think people were encouraged by that. And sort of we’re told, you can’t be seen as being thoughtful about this. You have to be seen as making statements.
Mike Blake: [00:33:14] And the ones that were like, “Well, hold on a minute. I really need to think this through. I need to know how I feel about this.” Like, “Well, you’re part of the problem.” You really need to hurry and make up your mind. And if you’re not making up your mind, actually they tell you which side you’re on. That’s a little bit of the problem we have with this.
Mike Blake: [00:33:37] I really love that term easy outrage. I agree with you, it’s something that social media has enabled because, now, if you’re outraged about something, it used to be kind of hard to find somebody that was just as outraged about it as you are even more. Where, now, 1,000 people having the same outrage, and maybe the only 1,000 people that are truly outraged about it, are only a click away. And they’re an amplification chamber, basically.
Peter Baron: [00:34:08] I think in the climate we’re in, though, it’s going to have a season. Because I think being considerate and thoughtful is valued more highly. And because we’re on a timeline as things go forward and as you look back, you know, you try to learn the lessons of history. And it’s hard to be running at ten all the time.
Mike Blake: [00:34:39] Yeah. I mean, that’s not the topic of the conversation, but I’m going to interject it anyway. I know people that appear to have an endless capacity for outrage. I have the capacity to be outraged for about three things in any one given point in time. And one of those is usually being frustrated with one of my sports teams screwing something up. And it takes a lot of energy.
Mike Blake: [00:35:08] But, now, coming back to the actual topic, I do wonder – and maybe this is too cynical, but there’s data to back this up – if outrage sells.
Peter Baron: [00:35:20] Good question.
Mike Blake: [00:35:20] And my support for that is that The Economist, again – every time I mention that I should be getting some kind of royalty, but anyway – they published a great article about two years ago that outlined the case that the more outrage a media outlet generates, the more profitable they are. And they’re more profitable because people who are outraged are going to spend more time in the place that feeds their outrage, because, in fact, it’s a dopamine manipulation when somebody sort of satisfying your outrage, there’s a hormonal reaction.
Mike Blake: [00:36:01] And, second, when those people self-identify – this gets into your neck of the woods, Peter – is, what a great way to identify your customer avatar. They’re screaming at you all the time saying this is the one thing that I care about. As opposed to the olden days where 50 percent of advertising was wasted. In an outrage environment now, in the right kind of medium, you’re getting 90 percent efficiency in your advertising dollars now.
Peter Baron: [00:36:34] Yeah. I totally agree. I mean, if you look at some of the billionaires that make investments politically, several of them are from this industry that really makes a lot of money from fanning the outrage. So, you’ve got Rupert Murdoch with the Fox Group and you’ve got Michael Bloomberg. There’s a number that directly benefit from people tuning in and persisting to tune in.
Mike Blake: [00:37:14] Elon Musk is another.
Peter Baron: [00:37:17] Yeah. Yeah. The whole Twitter thing. I mean, it’s a platform for people to listen to thoughts and opinions all the time. And a confession, a number of years ago, probably – probably 20 years ago – I would be driving around a lot in the car to meetings and would listen to AM radio. And I found it very stimulating and interesting, but also enraging. And then, I realized that it was sort of coloring my thoughts and opinions of people. So, I couldn’t almost enter a room without trying to figure out who was what.
Peter Baron: [00:37:54] And I decided that that’s not the way I want to be. I like people and I want to sort of treat them for who they really are. And I stopped listening to it. And then, I realized, “Boy, my life is so much happier now.” Plus, I’m not listening to as many commercials. And then, I thought, “Okay. Yeah. That’s the whole deal, right?” They want to keep me on the line to have me listening to commercials. And so, that’s the moneymaker for all of this. Let me engage these people so that they’ll keep coming and I can keep putting commercials in front of them and making money.
Peter Baron: [00:38:32] But having said that, I think, for instance, if you look at the right hand side of the spectrum on the left, both of those, I think, have kind of shot all their bullets and they’re declining audiences. People are just sick of it. Especially when the war in Ukraine started, people wanted to find other sources for information. And I did. I’d be looking to the German, the French, the British streaming broadcasts. I even was looking at Al-Jazeera just to try and figure out where’s the real information here. Completely didn’t even consider the sort of two main U.S. sources of information. And I think a lot of people are either getting to that point or have gotten to that point.
Peter Baron: [00:39:23] What does that say for audience loss, losing customers? That too much of the same thing all the time, milking it, milking it until you’ve lost the trust of your customers. To me, that’s not doing your business a favor.
Mike Blake: [00:39:39] So, in your mind, when companies are choosing to align with some political position, do you think that that’s being led top down that the company executives are in effect thinking, “Because we have this resource, because we have this audience, and because we have this money, we have an obligation to do something.” Or do you think that it’s more being led, “Our customers who align with us expect us to do something and, therefore, we have to take a position where our customers will start to be confused with our why.”
Peter Baron: [00:40:20] I’ve got two answers. One of them is Koch Industries, and the other is a quote from Unilever. So, Koch Industries – that’s not Coca Cola – K-O-C-H, they own Georgia-Pacific and several others. I know they’re at least $15 billion, maybe be a lot more. Their political involvement is really driven by the ideology of the two brothers that own this immensely huge private company. I know there’s probably a lot of people that work at Georgia-Pacific that don’t side with the views of their owners.
Mike Blake: [00:41:05] I know someone who quit Georgia-Pacific over it.
Peter Baron: [00:41:07] Yeah. Yeah. And, actually, we were doing work for them when Koch bought them. And there were a lot of people that were not happy with sort of leanings of the Koch brothers and others that were. So, some corporations make their decisions based on the very top level. This is kind of their ideology and they’re going to use their resource pool to take care of it.
Peter Baron: [00:41:29] But then, you look at the other side of the coin, there’s a quote from Paul Polman, the CEO of Unilever. He said, “I go on a lot of home visits or I go around with shoppers, and I seldom met a consumer who buys our wonderful Knorr products, or Lipton, or OMO, or Skippy because they like our strategy. And so, our business is a very simple one of getting the right products to the right place and of the right quality and the right price all the time.” I thought it was fascinating given that this guy is kind of well-known for making comments about social causes that, really, what they’re about as a company. And he’s going on home visits. How many CEOs actually go to see somebody that buys Skippy Peanut Butter?
Mike Blake: [00:42:21] Well, I would argue that’s probably why they’ve enjoyed success. But, you know, that says a really interesting thing. And that at the end of the day, consumers have a problem they’ve got to solve. And if the company is solving that problem well and better than a readily available alternative, then perhaps a lot of customers will just sort of turn a blind eye or, frankly, just will override it, saying, “Yeah. I don’t love the fact that the Koch brothers presumably are contributing heavily to Republican candidates.”
Mike Blake: [00:43:03] But on the other hand, “They have the best flying at the best price, they can have it on my jobsite in two days. I have a business to run.” And I wonder if what we’re discovering here is that when businesses take a political position, they are expressing a high level of confidence in their market power that they aren’t going to alienate customers. Because it is hard for them to switch. It would be more painful for them to switch than it would be to continue to pay money that they know may ultimately be directed at a cause to which they are opposed.
Peter Baron: [00:43:43] I think that’s a good summation. In fact, if you were to try and look for an example of a company that really suffered because of taking the political position, it might be hard to find more.
Mike Blake: [00:43:55] And I was going to ask about that. I know that there are small companies that might have. There is a restaurant in town, I’m sure that you know it, over there near 285 and 75, and I’m not going to call them out by name, but they’re very well known in the business community. We’ve all had breakfast there.
Peter Baron: [00:44:18] Oh, okay.
Mike Blake: [00:44:19] And then, shortly before the 2020 election, they decided they were going to go all in for Donald Trump. And a lot of people, some people you and I both know that have been longtime patrons, long time cheerleaders just said – I’m going to assume for the moment they actually did what they said they did – “I’m never going back there again.” Again, did it hurt or did it also encourage people who were supporters of Donald Trump to say, “Okay. We got to rally around this restaurant and reward them for taking this position because it’s costing them business.”
Mike Blake: [00:44:55] And absent a very expensive survey, there’s really no practical way to know that. But I do know they’re still operating. And when you go there, there’s still a lot of people in the restaurant.
Peter Baron: [00:45:05] Okay. I was going to ask, are they still in business?
Mike Blake: [00:45:07] They are. They are in a state that voted blue last election.
Peter Baron: [00:45:15] Well, and hanging on through COVID, too, is pretty remarkable achievement.
Mike Blake: [00:45:20] Yep, very much so.
Peter Baron: [00:45:22] And especially a test when you’re taking a political statement like that.
Mike Blake: [00:45:26] Yep. Yeah.
Peter Baron: [00:45:27] So, the examples may be visible with smaller companies. But with bigger ones, take your Disney example, a global brand, nobody in France or England or Germany or Japan is going to even know about the stance that they’re taking with Florida. They’re just going to want to tune in and continue to enjoy the content. And they’re going to continue to pump out that’s why they have a relationship with Disney.
Mike Blake: [00:45:57] Well, you know, maybe something to this would be fun to research to see if anybody has done a paper on this. But I think Disney has a certain amount of monopoly power. You know, they’re the preeminent brand in amusement parks, with all due respect to Six Flags. I think the Disney brand has a greater mystique to it. And the fact that they own so many entertainment properties from Mickey Mouse to Star Wars. And I think they own Marvel. I think they do.
Peter Baron: [00:46:29] They do. Good for them, because Marvel has been a gold mine.
Mike Blake: [00:46:33] Yeah. Yeah. So, I do think that they own Marvel. And, of course, they own ESPN, which means they own a lot of the sports franchises. I wonder if part of that conversation – and this can be painful for some people here – Disney says, “You know what? They’re going to be mad. They’re going to go away for a while. But, eventually, their kids are going to say, ‘I want to watch Star Wars. I want to watch Marvel.'” And as a parent, there’s a limit to how long you’re willing to sort of allow that to go on for some people. I know I wouldn’t be that committed. I’m like, “Okay. Here’s Luke Skywalker. Go.”
Peter Baron: [00:47:16] Yeah. I totally agree. And when you watch that content, it doesn’t come with a warning. By the way, this is the stand that they took in 2022 in Florida. It’s just not going to linger. So, taking the long view is really important. I think some people wonder why, sort of jumping on the bandwagon too late on some issues.
Peter Baron: [00:47:47] When you think about Walmart – and this may date the show – but the last week or so, Walmart apologized because they were going to be selling merchandise around Juneteenth. And so, they took the merchandise away and apologized that they’d done this. And then, there’s a variety of comments that are made after the fact. Some of them saying, “Well, they should have kept it in there, because there’s probably a lot of people in the United States that don’t even know what Juneteenth is.” And they’re bringing visibility to this. And others saying, “Well, they’re kind of exploiting this opportunity to respectfully celebrate this day by commercializing it.”
Peter Baron: [00:48:32] So, they sort of damned if they did and if they didn’t. But, nonetheless, here’s this global corporation that felt like they made a misstep and had to pull back and apologize. It’s fascinating.
Mike Blake: [00:48:45] I’m glad you mentioned that, because I do wonder if in some cases, at least some cases, many companies, like it or not, are taking a political position. Even through an action, you’re taking a political position. And Walmart probably caused that problem. But you’re the PR expert. I’m not. If they never broached the topic at all, they probably would have been better off than had they done what they did, which is have a false start. Because nobody would have had the conversation. But now that they did, their position, either way they go, they’re going to be viewed as heroes by somebody and bad people by somebody else.
Peter Baron: [00:49:35] Right. And this is a company that probably worked really hard. And this probably wasn’t a board level decision. The apology was. But getting the items designed and manufactured, that was done at sort of product management level. They probably have a pretty reasonably diverse board now. And that discussion to pull the products and apologize went through that forum, I would think. And you can second guess it now, but they made the decision. It probably made clear sense.
Peter Baron: [00:50:11] And I think to err on the side – and probably this is where they went risk management – of being respectful and not seen as leveraging something, there are a lot of sensitivities about is probably the right place to be. The comments about, “Well, most people don’t know what it is. Thanks for helping us with publicizing this.” They could have hoped for that, but probably wouldn’t have gotten enough of that to make it worth it.
Mike Blake: [00:50:39] I’m talking with Peter Baron. And the topic is, Should I align my company with a political position? And by the way, Walmart, I’m sure if you want Peter’s help to resolve those issues in the future, he’d be glad to take your call or email. So, give him a shout if you’re listening out there in Bentonville, Arkansas.
Mike Blake: [00:50:59] You mentioned something in passing. I want to make sure that I didn’t skip over because I do think it’s important. And that is, in your view, is the timing of taking a political position an important factor in the decision? Being an early adopter, if you will, versus a latecomer. One’s a riskier position, the other possibly perceived as being a bandwagon jumper. What’s your view on that? If a client is asking you, “Hey, should we take this position early or late?” What do you think would be more likely to advise?
Peter Baron: [00:51:34] Yeah. I like that question. I think it’s really, really a tough one. So, through the lens of history, you know, people are buying Mercedes-Benz despite decisions they made during World War II. Same with Mitsubishi and other Japanese brands, we love them now, right?
Peter Baron: [00:51:55] So, you can make political decisions and throw your support in certain directions, and probably regret it, but do okay in the end if you can survive as a business. And I think what we’ve decided through our conversations are, many political decisions that are made that are existential for corporations, they may affect profit. But if you’re taking the long view, then it’s a different discussion.
Peter Baron: [00:52:29] I think that’s my advice is, take a long view. Have a hard look at your customers. Drive like the Unilever guy over to the customers and find out how they’re enjoying the Skippy Peanut Butter and what’s their life like. And realize your position with them. You’re a supplier of a vessel that you screw the top off of and they put a knife into and spread it on bread. That’s who you are. Don’t get ahead of yourself.
Peter Baron: [00:53:02] And, you know, don’t feel like you’ve got this right to change the world. So, you certainly have clout and the ability to do some things. But be careful about how you view yourself in the world. It’s a timeline that you should really be considering getting into early, getting into late. I have done enough research to know if that really hurts or helps. Publicity-wise, yeah, getting in early is obviously better for publicity.
Mike Blake: [00:53:38] Peter, this has been a great conversation. I have a bunch of questions that I could have asked, but we’ve had such a thoughtful conversation, we just don’t have the time. So, I’m sure there are questions that either our listeners wish we would have covered or wish we would have covered more than we did. If somebody wants to contact you for advice on this question, can they do so? And if so, what’s the best way for them to contact you?
Peter Baron: [00:53:59] Yeah. The best way is probably email, which is pbaron, B-A-R-O-N, @carabinercomms, which is C-A-R-A-B-I-N-E-R-C-O-M-M-S, .com.
Mike Blake: [00:54:14] That’s going to wrap it up for today’s program. I’d like to thank Peter Baron so much for sharing his expertise with us.
Mike Blake: [00:54:20] We will be exploring a new topic each week, so please tune in so that when you’re faced with your next business decision, you have clear vision when making it. If you enjoy these podcasts, please consider leaving a review with your favorite podcast aggregator. It helps people find us that we can help them.
Mike Blake: [00:54:37] If you would like to engage with me on social media with my Chart of the Day and other content, I’m on LinkedIn as myself and @unblakeable on Facebook, Twitter, Clubhouse, and Instagram. Also, check out my LinkedIn Group called Unblakeable’s Group That Doesn’t Suck. Once again, this is Mike Blake. Our sponsor is Brady Ware & Company. And this has been the Decision Vision podcast.