Over the past decade, we have witnessed a massive change in companies’ willingness to engage in societal issues, like The Voice Referendum in Australia, climate change, Indigenous affairs in general, and the LGBTQIA+ movement. Partly, it’s driven by a desire to showcase a company’s social licence to operate.
The Voice Referendum: A case study
The Voice Referendum was probably the most interesting, as over half the population defeated it in every Australian state. While many supported it, for a major corporation, this means more than half its customers were against The Voice.
Apart from some media commentary, I haven’t noticed any company punished for its support of The Voice, but it’s a salient caution to tread carefully when it comes to riding a corporation into a public debate, particularly if there are politics involved.
Woolworths and Australia Day: A lesson in public perception
That was certainly on display when supermarket giant Woolworths shifted its attitude towards Australia Day. It was not the first retailer to downgrade Australia Day merchandise, but it certainly attracted the most negative attention, resulting in an advertising campaign to explain its position. For some, it had breached its social licence to operate, as witnessed by Federal Opposition leader Peter Dutton’s call for a boycott of the group.
The evolution of the social licence to operate
The concept of a social licence to operate has been about since the mid-1990’s but it has certainly gained prominence in the past decade. Since the Royal Commission into the banking, superannuation, and financial services industry and some resulting negative findings, there has been a massive push in those organisations to look at everything they do through a ‘client lens’.
“ The takeaway is don’t jump on a bandwagon just because it’s making the most noise.”
Likewise, the past few years for national airline carrier Qantas has been a bumpy road due to its perceived lack of customer focus. It will pursue a strategy to turn that around, however, it drives home the point organisations must be diligent in not just looking at their external perception, but driving a culture that raises red flags when activities could lead to poor customer outcomes.
The role of CEOs in upholding company values
In that vein, CEOs need to live and breathe a company’s values. Again, this is not a new concept, but it takes on greater prominence when companies increasingly become highly visible and subject to public and political scrutiny for perceived breaches of their social licence to operate.
Strategic caution in corporate responsibility
An interesting story progressing internationally can be found in the car industry. At the start of the decade brands like Mercedes and Volvo heavily pushed the message they were going all-electric vehicles in a relatively short timeframe.
Mercedes recently admitted its push for an all-electric fleet wasn’t going well, and it would be manufacturing combustion engines well into the next decade. Ford and GM have also shifted down the rhetoric on electric, and Toyota’s chairman, Akio Toyoda, earlier this year said electric cars will never account for more than 30% of the global car market.
In a few short years the angelic glow around the electric car transformation has dulled significantly. While zero-emission technology is still the coveted goal, the takeaway is don’t jump on a bandwagon just because it’s making the most noise.
[**Full disclosure: The views and opinion expressed in this publication are those of the author. They do not reflect the views or opinions of any organisation or entity.]
