Social Activism: Opportunities and Risks for Businesses

Social activism is increasingly pressuring business to take stances on political and social issues. Recent examples include the imbroglio over Nike’s “Betsy Ross flag” shoe, banks divesting from for-profit prisons, and politicians like Bernie Sanders and Alexandria Ocasio-Cortez calling out Walmart and Amazon by name. Activism presents both opportunities and risks for businesses, so RANE spoke with Bill Coletti of KITH to learn how they should navigate the new activist environment.

Coletti argues that there are three types of risks—strategic, preventable, and external—that create the larger category of activist risk.

  • Strategic risks are those the company purposefully takes to maximize corporate value, such as Nike’s embrace of Colin Kaepernick, which drew in large amounts of new, younger customers.
  • Preventable risks are those that come about through mistakes that the company should have stopped, such as protecting corporate data against “hacktivists” such as Anonymous.
  • External risks are those outside of company control and which the company can only take steps to mitigate, such as Amazon being targeted by vocal politicians with dedicated followings.

Coletti recommends that companies review their corporate culture and decide if there are issues on which they want to choose sides. He argues that not every company needs to take a stance on every issue but should consider which issues most affect their industry and then, after a careful cost-benefit analysis, decide on their stance.

  • Coletti recommends that companies build activist risk into their understanding of supply chain risk management by undertaking a comprehensive review of their operations to discover how different activist interests could affect their particular operations and market, from beginning to end.
  • Companies need to also consider how their employees will react to activist movements, warns Coletti. The recent Wayfair employee walkout over the company’s business with government contractors that run migrant detention centers may have been prevented—or at least minimized—by early communication with concerned employees.

Predicting when a company will come under activist attention, or for what issue, is difficult at best, says Coletti, and the risk of being targeted by activists is compounded by more businesses taking political and social stances that open them up to criticism. Many companies believe that if they are targeted, the problem will eventually resolve itself, he says, and, as such, many “mistake fire for smoke.”

  • Activists pressuring companies is nothing new, says Coletti, citing Ralph Nader’s late 1960s campaign against car manufacturers for their resistance to adding safety measures to cars. What is new, says Coletti, is social media, which acts as a force multiplier.

Coletti warns that, instead of hoping activist pressure goes away, companies should be proactive, and he argues that this requires tracking social media since most activist campaigns start there. By tracking social media, companies can identify key activist influencers, their typical targets, and set thresholds for when social media activist activity becomes a concern to the business

  • RANE social media analytics experts note that, historically, listening to activists on social media has been difficult due to the sheer number of users and the complex relationships among them. Cutting edge mathematical concepts such as graph theory, however, now enable experts to cut through the volume and chaos.
  • RANE social media analytics experts have mapped out online networks and actors to successfully identify social media communities. These networks can then be further mapped to identify sub-networks as well as key individuals within the community. This information allows companies to track activist actors that may create opportunities or challenges for their business.

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