Yahoo Finance’s Myles Udland, Brian Sozzi, and Julie Hyman discuss the latest news in Trump’s business backlash with Renee Richardson Gosline, MIT Sloan School of Business.
JULIE HYMAN: Fallout continues from last week's storming of the Capitol by violent protesters. As we talked about today the House is voting on impeachment but there's also been a lot of corporate fallout, of course, with a lot of companies suspending donations to all political candidates. The latest that we got is that Walmart and Disney are going to be indefinitely stopping contributions to members of Congress who voted against certifying Joe Biden's election victory. We also just heard from Airbnb that they're canceling some reservations linked to the inauguration because they fear that it may be individuals who are planning more actions in D.C., more violence in D.C.
To discuss all of this we are now joined by Renee Richardson Gosline. She is with the MIT Sloan School of Business where she is a senior lecturer in the Management Science group there. And boy this is quite a lesson in management and branding isn't it, Renee? To see all of these companies come out and make these comments. What do you make of it? Is it sort of disingenuous, is it sort of marketing, or how are you reading these actions?
RENEE RICHARDSON GOSLINE: Yes. I think there's certainly a lot of reputation concern in management going on here. And I think that these companies are paying attention to customer sentiments. The data are there that suggest that the tide has turned and continues to turn as this is an unfolding and ongoing story. But I also think that this isn't particularly risky given that and I think that now is the time for leadership. You know, branding is not a popularity contest, contrary to some-- some people's belief. And so it is good business to take a stand. And when you find that your customers and the context has changed and taking a stance that aligns with your values makes sense.
MYLES UDLAND: And you know, Renee, this morning Edelman came out with its latest Trust Barometer Index and it showed that business is the only major institution viewed by consumers as both competent and ethical. You know, ahead of NGO's and certainly the media and government, as well. And I'm just curious, this new world we're entering where business is seen as the place to go for leadership on kind of your-- your personal ethic, in a way. I mean consuming is sort of the main thing that we all do. How does that change the role of the corporation going forward? What is-- like when you are teaching students, how are they to think about their role in the future of the corporation, which I think is is being reshaped in real time. Certainly by the actions we're seeing this week, among others.
RENEE RICHARDSON GOSLINE: Absolutely. I think we have to ask the question, who doesn't have to issue these kinds of statements? Because who, all along, has been engaging in behaviors that suggest leadership, that suggest values are important, right? We don't hear Chobani, we don't hear Patagonia, we don't hear Ben and Jerry's, sort of having to take a stand like this because that's been consistent with their ethos. And so I think it's important that we think about that consistency, especially because 71% of consumers say that they choose brands that align with their values. Right? So given what's going on here it's really critical that we think about leadership and ethics and connections with our customers as being not just good business but the right thing to do.
BRIAN SOZZI: Let's say you at one of-- you're a CEO at one of these companies that is now saying, you know what? Let's say you're at Google, you're Sundar Pichai and you just kicked President Trump off your YouTube platform for an indefinite amount of time. How do you ultimately bring that back at some point? Do you bring it back? What steps need to be taken before that would happen at a Google or another company could come back and start contributing again to politicians and not hurt their brand?
RENEE RICHARDSON GOSLINE: That's a great question. So I think we need to think about external and internal issues. So the customer experience and the employee experience. And one thing we're seeing is not just customer reaction to this but also employees. Employees being proud of the places in which they work. If you look at some of the content on Twitter people sort of really congratulating their firms, right? And that's important because how employees feel affects how customers experience your product. So I think before making a move like that to-- to stop a sort of boycott or to reverse course, it's important to pay attention to both sides of this coin and to think about the long term implications about potentially being seen as inauthentic. You know, you don't want to have a 'this you?' moment on Twitter where you're called out for being hypocritical or in-- inconsistent.
JULIE HYMAN: Yeah, definitely. Companies do not want to be seen as hypocritical in this environment. There's another company that I want to bring up that took some action this morning, not regarding the events of last week, but the general push toward racial justice in this country. I'm talking about Apple. The company, back in June, did a $100 million pledge to combat systemic racism. And then today they're sort of talking about some of the details of that. Education and funding opportunities, funding opportunities for minority businesses, in particular. What do you-- you know, when you hear something like that, I'm curious, these companies taking action. What does the action have to look like? You know, is it about giving money? Is it about, to your point, Patagonia doesn't necessarily trumpet everything it does. But this is a lot of money and it's a big-- it's a big push. So is that the right way to do it?
RENEE RICHARDSON GOSLINE: I think economic capital shifting is an important step but it's not enough. Right? It's not enough because people are looking for longer term and structural change. I think in the case of Apple this is a really important step because of the brand's community, its culture that it cultivates. That Apple is a very symbolic brand and it's important then to the extent that you have a brand that's symbolic, that's more than mere utilitarian. That you provide customers with reasons to believe in you and to have loyalty in you and to trust you beyond mere functionality. That's what helps you avoid commodification and from a tech world where there's constant innovation, there's constant sort of a treadmill of catching up and staying ahead, it's a smart move to not only sort of give a monetary kind of commitment but also to make structural change, as well.
JULIE HYMAN: Right. And this one looks like maybe it's doing both. But well I guess we'll have to get more details and transparency and accountability as time goes on. Renee Richardson Gosline of the MIT Sloan School of Business. Thank you, Renee. Appreciate it.
RENEE RICHARDSON GOSLINE: My pleasure, thanks.