When JPMorgan Chase CEO Jamie Dimon took a knee with employees to signal support for the Black Lives Matter movement, the move brought more criticism than praise. Activists and Black business owners were quick to point out the bank’s recent history of lending discrimination and its lack of Black executives. Similarly, companies including Estée Lauder, Pinterest, and Facebook were also blasted for taking strong public stances against racial injustice while failing to address racism within their own organizations or make progress diversifying their workforce and management ranks. Criticism of hollow corporate statements on social media has been so widespread that it even earned its own hashtag: #pulluporshutup.
The public backlash over these generic corporate responses represents a marked difference from 2014, when brands went largely unchallenged for standing on the sidelines or issuing noncommittal statements during the Black Lives Matter protests in Ferguson, Missouri. At that time, calls for the Washington football team to change its name faded after team management and the NFL refused to acknowledge them. In recent weeks, however, the team has bowed to sustained public pressure and announced that it will drop the “Redskins” name and logo.
What we are seeing is that, after years of tolerating companies making weak pledges and looking the other way, the public has raised the bar for what constitutes an acceptable corporate response to racial injustice. It is no longer enough to issue a boilerplate statement and move on—companies must engage directly and authentically with the issue and own their past failures to be taken seriously. A response that falls short of expectations can prompt a swift backlash, threatening the reputation a brand has spent decades building.
Fortunately, companies that tackle crises head-on often come out stronger than before. Nike drew public outrage in the 1990s when it emerged that the company’s workers in Southeast Asia were toiling in inhumane conditions. Executives initially rejected responsibility and tried to push the blame onto suppliers, but after mounting public pressure, the company engaged with the issue and committed to regular factory audits, a higher minimum age for workers, and clean air standards across all production sites. Nike has since been recognized as a global leader in labor rights and has made labor activism, once a stain on its reputation, an integral part of its legacy.
The catch is that there is no one-size-fits-all response to crisis that works across the board. My research suggests that a brand’s reputation and the public’s expectations of them play a major role in determining how their response to a crisis will be received. These two factors often interact in counterintuitive ways. For example, companies with stronger reputations are actually more at risk of inciting public wrath. The public perceives them as having greater responsibility for building a path forward and leading with integrity. Any misstep feels like not just a mistake, but a betrayal of trust.
This interaction between reputation and expectations has been on display in the sports industry’s response to the Black Lives Matter movement. NASCAR was widely praised for banning Confederate flags from its races, a move that in any other context would be seen as the bare minimum for a modern company. But the sport has been losing fans in recent years and, given their cultural image, the public expects little from NASCAR on issues of race. The NFL, meanwhile, has a much larger and broader fan base and has continued to face criticism even after apologizing for its past handling of players such as Colin Kaepernick kneeling to protest racial injustice. The public’s expectations of the NFL are higher than NASCAR in this area and, as a result, fans have been disappointed even as the football league evolves its stance.
The NBA offers an interesting counterpoint to the NFL, as the league has made being progressive on issues of social justice an integral part of its brand. Players and coaches have embraced the Black Lives Matter movement and the league responded to recent protests by announcing opportunities to integrate social justice messages on players’ jerseys and game courts. In doing so, the NBA matched its response to both its reputation and the high expectations of its fans.
As the experiences of America’s sports leagues demonstrate, every company’s circumstances are unique and determine how their responses to crisis will be received by the public. Given this, what should businesses keep in mind as they navigate ongoing calls for action to address racial inequality?
1. Companies should be attuned to what people expect from them
That requires understanding not only your reputation, but also how your responsibility for an issue is perceived by the public. Facebook, for example, has received significant criticism for its unwillingness to regulate hate speech on its platform. This criticism is rooted in a disconnect wherein the company sees this issue as not its responsibility, while the public places the blame squarely on its shoulders.
Of course, companies should be driven by doing what is right rather than simply trying to match expectations—but understanding your accountability in the eyes of the public can help clarify the appropriate response. Starbucks has sometimes swung far beyond expectations, such as their widely-panned effort to have their baristas discuss racism with customers, while at other times the company has tried too hard to remain neutral by, for example, restricting baristas from wearing BLM protest symbols. At both ends of the spectrum, the company attracted criticism as a result of not understanding its appropriate role in addressing a complex societal issue. The balance can be difficult to get right, but also rewarding when done well—the public responded positively to Starbucks’s nationwide day of racial-bias training for its employees following an incident of discrimination in one of its Philadelphia stores.
2. Companies should pursue authentic responses that connect to their strengths and their brands
Instead of issuing a generic statement or making a donation, businesses can draw on their existing competencies to stand out and demonstrate their investment in a cause. For instance, Audible responded to the coronavirus crisis by making educational books available to kids stuck at home for free. Uber has leaned into its strengths by offering free delivery for Black-owned businesses through Uber Eats for the rest of the year.
3. Companies should mount a consistent response across their organizations and in their messaging
The public, aided by social media, is incredibly quick these days to detect disingenuous statements and to root out mismatches between internal actions and external posturing. The controversy around JPMorgan Chase stems from the fact that the company has a history of discrimination inside its organization while decrying racism in public statements.
The noncommittal tactics and generic responses that companies offered in the past will no longer cut it in today’s racial justice movement. Businesses must engage with the issue directly, authentically, and consistently, acknowledging their past mistakes and developing concrete plans for moving forward while paying close attention to public expectations. Those that do can follow in the footsteps of Nike and turn crisis into an opportunity for positive change.
If it truly listens and responds to the public’s expectations, a company like JPMorgan Chase can become a leader on racial justice rather than trying to constantly cover its tracks. By the same token, Amazon could be a trailblazer on workers’ rights and Facebook could take the lead on efforts to root out hate speech online. If companies follow a path of learning and growth rather than simply damage control, we might actually see lasting change grow out of crisis.
Jonathan Bundy is an associate professor at Arizona State University’s W.P. Carey School of Business. His research focuses on corporate reputation, crisis management, and the relationships between businesses and their stakeholders.