Is CEO activism the key to engaged employees?

CEO activism can be a dou­ble-edged sword, but chief exec­u­tives are increas­ing­ly recog­nis­ing the val­ue of tak­ing a stance on key soci­etal issues, not least in terms of employ­ee engage­ment.

Although adopt­ing a pub­lic posi­tion on impor­tant mat­ters is still not wide­spread, it is set to become more com­mon­place over the next few years and for good rea­son. Accord­ing to research and advi­so­ry firm Gart­ner, 87 per cent of staff now expect senior exec­u­tives to make a pub­lic stand on issues that are rel­e­vant to the busi­ness, while just under three-quar­ters believe the same should be true even for unre­lat­ed mat­ters.

The biggest push in this direc­tion is com­ing from mil­len­ni­als and Generation‑Z work­ers, many of whom are not only social­ly active and vocal them­selves, but will also make up the sin­gle biggest seg­ment of the work­force over the next five years, which means the sub­ject is not going to go away.

As a result, those senior lead­ers who fail to don the CEO activism man­tle around issues of their own choos­ing risk being over­tak­en by events and fac­ing pres­sure to act. This means the issue will choose them instead, warns Michael Bar­ring­ton-Hib­bert, founder of exec­u­tive search and advi­so­ry firm Bar­ring­ton Hib­bert Asso­ciates.

But there are oth­er dri­vers behind the grow­ing desire of some lead­ers to get involved in CEO activism. These con­sist of a prag­mat­ic mix of altru­ism, which has been catal­ysed in some instances by the human tragedy caused by the coro­n­avirus pan­dem­ic, and recog­ni­tion of the com­mer­cial appeal of busi­ness­es tak­ing a pur­pose-led approach.

Dave Vann, man­ag­ing direc­tor of strat­e­gy and cre­ative agency ABA, explains: “It’s part­ly dri­ven by a desire to serve soci­ety, but there’s also the view that by doing so, employ­ees will be more moti­vat­ed and work hard­er for you, which affects the bot­tom line. It also appeals to cus­tomers, which means it can help increase mar­ket share too.”

Boosting employee engagement

Put anoth­er way, says Matt Git­sham, asso­ciate pro­fes­sor and direc­tor of the Ashridge Cen­tre for Busi­ness and Sus­tain­abil­i­ty at Hult Inter­na­tion­al Busi­ness School, there is “much evi­dence that those organ­i­sa­tions try­ing to do some­thing pos­i­tive can have an equal­ly pos­i­tive effect on employ­ee moti­va­tion and morale”.

On the down­side though, if lead­ers get it wrong, they can do seri­ous dam­age not only to employ­ee engage­ment, but also to the company’s wider brand and rep­u­ta­tion.

“If a par­tic­u­lar stance seems oppor­tunis­tic or as if someone’s jump­ing on the band­wag­on, it can feel jar­ring and will be con­sid­ered insin­cere and cyn­i­cal,” Git­sham explains. “So it’s a real­ly good thing if done in the right way, but it’s pret­ty neg­a­tive if not.”

It is this fear of sip­ping at a poi­soned chal­ice that puts many senior exec­u­tives off from going down this route in the first place. While the accept­abil­i­ty of stick­ing their heads above the para­pet is more wide­ly recog­nised than in the past, few have ben­e­fit­ed from the lead­er­ship devel­op­ment train­ing nec­es­sary to pre­pare them for speak­ing out pub­licly in ways that avoid poten­tial mis­in­ter­pre­ta­tion and sub­se­quent attack, par­tic­u­lar­ly in polarised soci­eties, such as the UK and Amer­i­ca.

But, as Git­sham points out, lead­ers are essen­tial­ly damned if they do and damned if they don’t. “While you need to be aware of the risks to the brand, you also need to bal­ance it against the risk of not say­ing any­thing at all, as both approach­es will inevitably upset some­one,” he says.

As a result, not only is it ben­e­fi­cial to obtain pro­fes­sion­al guid­ance, but it is also advis­able for senior exec­u­tives to sup­port only those issues that chime with their own beliefs and val­ues, although ide­al­ly they should con­nect with the core pur­pose of the busi­ness too.

The importance of taking action

“The cru­cial thing is that you believe in it, as tak­ing a stance will only work if it’s mean­ing­ful, authen­tic and aligns with what you’re doing in the organ­i­sa­tion,” says Git­sham. “So if you speak out against insti­tu­tion­al racism and can talk about what you’re doing to tack­le it inter­nal­ly, it’s much more pow­er­ful and con­vinc­ing than if you’ve nev­er done any­thing about it before.”

In the case of a sud­den epiphany though, pub­lic state­ments must also go hand in hand with a mean­ing­ful pro­gramme of work to fol­low through and effect change, he adds.

Inter­est­ing­ly, the impor­tance of tak­ing action is also reflect­ed in Gartner’s research. It reveals that if busi­ness lead­ers sim­ply make a pub­lic state­ment on a giv­en top­ic with­out doing any­thing, staff sat­is­fac­tion rates fall by 38 per cent as cyn­i­cism and dis­il­lu­sion set in. If words are backed up with appro­pri­ate activ­i­ties though, engage­ment leaps by 60 per cent.

Anoth­er con­sid­er­a­tion when try­ing to get CEO activism right is dis­cussing the real­i­ty on the ground with a range of stake­hold­er groups, which includes employ­ees. This involves can­vass­ing opin­ions on var­i­ous top­ics, but it also means “doing the ground­work, find­ing the gaps and blind spots, and under­stand­ing what’s going on” in the organ­i­sa­tion day to day, says Vann.

This kind of approach not only boosts indi­vid­ual cred­i­bil­i­ty and pre­vents basic errors, but also helps cre­ate a wider feel­ing of shared pur­pose and val­ues inter­nal­ly and exter­nal­ly, which again boosts engage­ment.

“You don’t want your brand to be whol­ly wrapped up in, and depen­dent on, the CEO. The issue also needs to be accept­ed as part of the organ­i­sa­tion­al cul­ture so oth­er peo­ple can own it in their own way too. But if the CEO can infect oth­ers with their pas­sion, that’s where it becomes real­ly pow­er­ful,” Vann con­cludes.