You have likely heard the saying that generally says hard times create strong men, strong men create good times, good times create weak men, and weak men create hard times. Well, the same goes for corporations. Times are getting tough, and that means it is time for you to get back to business.
On the back of a macroeconomic environment that heavily favored big businesses, including a long bull run in stocks and cheap and available access to credit, not to mention some extra crony benefits from the government, big corporate businesses have generally done very well.
The one area that hasn’t favored businesses is the labor market, where there are now almost two jobs available for every job seeker. The combination of “good times creating weak corporations” and employees having outsized leverage has led a whole slew of corporations to take their eyes off the proverbial ball — in this case, running their business — and take on a slew of social and cultural agendas.
Companies have waded into a variety of social, cultural and political agendas that have absolutely nothing to do with their businesses and the goods and services they provide to customers. Often, it hasn’t gone well. Companies have faced social media backlash, boycotts, and, in many cases, reduced revenues and stock prices.
You, as a business, don’t have the luxury to spout off and wade into the social discourse any more. The economic environment has changed. The Federal Reserve is tightening its policy that disproportionately benefitted you at the expense of smaller competitors. The Fed is also trying to slow down demand to help quell the rampant inflation that it, alongside government fiscal policy, has stoked. Energy and commodity prices will likely remain elevated. The financials of many of your customers and clients will get tighter. Countries around the world also face inflation and recessions; others face unrest from coming food shortages, which will impact the economy globally. Right now, more than ever, you need to mind your own business, both figuratively and literally.
Even the labor situation will likely shift, as the attempt to control inflation will most likely cause many businesses to cut back on hiring or lay off personnel, as we are seeing with many of the tech growth companies already, if they don’t shutter completely.
Now is the time to re-evaluate what matters — and that is running a business, not being a cultural pundit.
As we have seen from the backlash, many customers despise when you stop being a business and start speaking on unrelated issues. While it may appear there is a lot of interest or support in your being a cultural warrior, the reality is that there is a silent majority. The ranting on Twitter is rarely indicative of the real world, and social media is not a great place from which to take social counsel.
Of course, there are exceptions. If you have a brand that is based on a social or cultural movement, then it is entirely appropriate. Digital marketing strategist Mack Collier said it eloquently in a response to a tweet, “Patagonia is a great example of doing it the right way. The brand wears its values on its sleeve and owns any discussion relating to those values.” He also expressed that while the brand’s values and his may not align, he has appreciation for the company’s approach. Ultimately, your cultural or social initiative has to be authentic and appropriate, or else you end up being Walmart, widely roasted for not taking an important holiday seriously by marketing “Juneteenth ice cream.”
Moreover, you don’t need to prove your worth. Being a good business is, in itself, a social good. You provide unique goods and services that add value to communities and to individuals, improving the quality of their lives. You may enable the creation and growth of new businesses, including small businesses as vendors. You provide employment opportunities. The money your employees make goes back into growing income and wealth for even more individuals, replicated millions of times each day. This is a unique social impact that is more than a one-time handout; it’s an ongoing source of benefit that touches many lives.
So forget the bs alphabet soup. Stop hiding behind the money grabs like ESG. Keep your focus on your business. Appreciate your customers and provide great products, services, and thoughtful customer service. Take great care of your employees. Help them share in the value they are creating alongside you with access to equity options and other wealth creation opportunities by funding 401k(s) for them. Treat them, and your vendors and other partners, generously and with respect. That’s all you need to do to be a good corporate citizen, and the market will take care of the rest.
It’s time that you mind your business, because not doing so will have real financial consequences, not only for you, but for those who rely upon you in the economy.