Insights

It’s time to talk to the activists

Companies welcoming activists to the table may see unexpected benefits

It is time for companies to engage with activists.

At least, that’s the view of Brayden King, a professor of management and organisations at the Kellogg School of Management.

King has spent his life researching the impact of activists on companies, and he’s reached some interesting conclusions.

Collective action works. If a company boycott gets noticed by the national media, activists get some form of concession in one in four cases. King has found that consumers rarely change their behaviour even if they publicly support a boycott – there is no slump in sales. But the action shines a light on a company’s behaviours or issues, which causes stakeholders to pay attention.

Protests can therefore impact a company’s broader reputation, potentially damaging relationships with customers and employees.

The easiest response a company can make is to issue a statement. It’s cheap and easy but also carries risks if the words don’t lead to actions.

King is fascinated by the growing trend of chief executives speaking out on issues unrelated to their core business. His research shows that this activism is driven by the belief that it is what employees want and is thus only likely to increase as workforces comprise more Millennial and Gen Z, who are willing to quit jobs that don’t align to their personal values.

The most significant action is perhaps to welcome activists into a company’s discussions. The best example of the impact of such an approach is at Nike, which was targeted by activists in the 1990s for its alleged use of sweatshop labour. By working in partnership with these activists, Nike improved its operations and its reputation and is today viewed as a company that cares about racial justice and human rights.

King concludes: ‘I think that activists increasingly do have a place at the table. We see them as voices that matter, and companies and governments throughout the world are increasingly willing to let them in and have them help set better practices.’