Kim Whitler | Why Are Executives Engaging in Activism That Creates Business Risk?

0:00The CMO Confidential podcast is a proud member of the I Hear Everything podcast network. Looking to launch or scale your podcast? I Hear Everything delivers podcast production, growth, and monetization solutions that transform your words into profit. Ready to give your brand a voice? Then visit IHearEverything.com.

0:22Kim Whitler:Welcome to CMO Confidential, the podcast that takes you inside the drama, decisions, and choices that go with being the head of marketing. Hosted by five-time CMO Mike Linton. Typeface has completely changed the process of large campaign executions. Everyone knows AI can help with images and headlines, but the real impact is making the leap from a creative brief to a live multi-channel large campaign at speed. Typeface just announced its marketing orchestration Engine, the first platform built to automate campaign workflows. You can roll out campaigns that used to take months in just a few hours.

1:04Typeface uses agentic AI to orchestrate the entire process, taking one campaign and instantly orchestrating it into thousands of personalized experiences across ads, email, and video. Major brands like ASICS and Post Holdings are already transforming their marketing with Typeface. See how to move from brief to personalized campaigns in hours, not months at typeface.ai slash CMO. Welcome marketers, advertisers, and those who love them, the Chief Marketing Officer Confidential. CMO Confidential is a program that takes you inside the drama, the decisions, and the politics that go with being the head of marketing at any company in what is one of the most scrutinized jobs in the executive suite.

1:52I'm Mike Linton, the former Chief Marketing Officer of Best Buy, eBay, Farmers Insurance, and Ancestry.com. Here today with my guest, Dr. Kim Whittler. Today's topic, why are executives engaging in activism that creates business risk? Kim started her career at P &G and went on to be a general manager of Aurora Foods and the CMO of David's Bridal. She then shifted to the academic world and is now a professor at the University of Virginia Darden School of Business, and she serves on the American Marketing Association board. She is a tireless researcher of the CMO position and just published new work on activism, picking the right company, and CMO versus CFO pay.

2:38Hi. Kim is a CMO Confidential OG and debuted as our first academic guest back in 2023. Welcome back, Kim. Thanks, Mike. It's so great to be here. I am so excited about all the success. I really am. You have worked hard, and this is, I think, the top marketing podcast. So it's an honor for me to be here and to see how far it's come. Well, thanks. We love having you on the show. So let's jump right in and talk about your recently published work on corporate activism, risk, and you called it executive flip-flops. Tell us about this study in general and your motivation for even fielding it in the first place.

3:19Yeah, you know, this all started actually for me way back with Nike and Colin Kaepernick, because at the time I thought this is a math problem. You know, when you are a mass brand and then you reposition yourself to be either liberal or conservative, that can be challenging. So that prompted my original interest. More recently, I've been doing some work with Thomas Barta, who's over in Europe. He's a former McKinsey partner. And we wrote a paper in Journal of Retailing where we looked at, we published a paper where we looked at the enterprise risk model. As part of that, one of the things that fascinated me was trying to understand why companies, the best run companies in the world, largest, the most respected, the most resourced were the ones getting into more and more hot water on activism statements.

4:12And the flip flops are things like Coca-Cola CEO or Disney CEO who start in the middle. They move to one side. They get hit by that other side. They then try to move back to the middle. And so you see this, you see in real time CEOs not even understanding exactly what their core position is because they're reacting. And so that prompted us to understand where is the pressure coming from? Because my perception outside in is that a lot of pressure is coming from the media or consumers, social media, right? And that that's causing companies to, CEOs to react. So what we did in this study is we both do a lot of work with executives.

4:55He travels all around the world. I travel predominantly in North America working with sea level groups. We do workshops. I do a lot of cases like on sociopolitical activism and workshops on it. What we. We broke the Budweiser case that you wrote on the show when it was published. So, yeah, that is. And you did the first case on that on that topic. Yeah. Yeah. Well, what I then do is I write the case, but then I have conversations with executives. If you're the CEO, what would you do? Why? What's the risk? How do you navigate this most effectively so that they can feel the heat that comes from making these decisions in real time?

5:31So what we did is we ended up creating, through our experience, we identified 14 different pressure sources. Okay. And then what we ended up doing is conducting a survey across North America, Europe, and APAC at three different organizational levels where we looked at where the pressure is coming from in the C-suite, senior management, and junior management, which, by the way, is interesting because it's different. Yeah. It's not the same pressure. It's not the same pressure. And so what we wanted to understand is what are the sources of pressure that's causing people to feel like they need to react?

6:07And so that's generally what the research was. It was just published in HBR, I don't know, three months ago or so. And so there's an article about it in HBR. Hey, I want to flip down to the pressures. You guys clustered the pressures into three groups, employees, external stakeholders like consumers and investors, and then other external stakeholders like media and influence groups. And you kind of put these pressures together. Can we talk about the pressures and what you concluded from there? Yeah. So we started with, let's talk about the individual. There is pressure internally. And by the way, I do a lot of work with C-level groups.

6:54And when you talk about, well, what's the right decision, the pressure for them to act is really an internal pressure regarding what they personally believe is right and wrong. And this is where sociopolitical beliefs conflate with kind of corporate management. Right. So it's one of the key sources is the person's own belief system. Right. Right. So you have a lot of young people who say, well, this is right and wrong. I'm pro-choice. I'm pro-life. Yeah. And then that belief system affects how they think about managing the brand and business. They don't divorce them. So you have your own belief system, which can be a source of pressure.

7:36Then inside the company, you can have, as a C-level leader, you can have members of your department below you. You can have leaders above you, like the CEO or board. You can have internal CSR DEI departments. Okay, that's a pressure source. These other sustainability CSR DEI groups that are trying to do the right thing that may be exerting some sort of pressure on you. All of those people above to the side and below can exert internal pressure. So that's a second group. That's the kind of the internal group. Then outside, you have key stakeholders. Stakeholders are going to be investors and owners, collaborators, agencies.

8:19So if you're in marketing, your ad agency could exert pressure on you. Or if you're an ad agency, your client could exert pressure on you. It could be consultants. So it's people that have a vested interest in the company but are external to the firm. Then you have a third group who are just external influencers or pressure sources. That could be consumers. That could be the press. that could be um uh activists that could be influencers it could be celebrity influencers expert influencers social media influencers etc and then you have family friends family and friends and so forth who could also be exerting pressure okay that's in your that's in your ecosystem so we have all of these different individuals or groups that could be saying things to decision makers that affect how they see whether or not they should get involved in activism.

9:17And one of the keys is those outside third parties, not the investors, not the shareholders, because they're probably more driven by financials, but maybe not always. But when you throw in the media and the social and the influencers and everything else, they really want you to make a statement. They don't they don't really care about anything, but you they want to get you onto the field. Right. Yeah. I mean, the external people, again, as I always say, there's one question I can ask that 100 % of consumers will respond the same way, regardless of what the political ideology. Do you want your favorite brand on a topic that you care a lot about picking the other side?

9:58liberals will say no never pick the conservative side conservatives will say no never pick the liberal side everybody agrees yeah that that's the only source of agreement otherwise what they want is to get you to align with them to adopt their view so the pressure outside is from interest groups or bots as we saw in the american eagle a lot of the pressure and the make-believe social media stuff was fake. And so a lot of that, they have no interest in the company per se, they just want the company to do what they want the company to do. We are taking a short break from this show for a word from our sponsor, Typeface.

10:47To orchestrate workflows across channels, meet ARC agents, your AI teammates handling complexity, so you can focus on what matters. All within a reimagined workspace where you and AI create as one. Spaces works the way you do. Create anything, from documents to videos to entire campaigns, at scale. Our agents help you craft campaign storyboards, powered by your brand hub, giving you the perfect starting point. Transform one asset into countless variations for every audience and market.

11:28Join industry leaders already reimagining their content lifecycle with Typeface. Welcome to marketing's next chapter, where every story finds its voice.

11:41Now, back to our discussion. So when you conclude you got all these pressures, you know, I think when I was reading the research, I concluded it's like a giant pressure meter. Like, how do I manage these pressures? Well, so first of all, I have to give you tremendous credit. So I'm stealing your pressure meter idea because you came up with it. And I said, this is genius because what we do is we have ratings, but essentially you are right. It's like a thermometer, a pressure meter from highest pressure to lowest pressure. And before I dive into managing it, do you want to hear a couple of the very cool things Oh, I do.

12:23We do. We absolutely want to hear that, Kim. Okay. So, and this is what I love about research when I am so wrong. Like where if Kim's little, you know, hypothesis was wrong. Okay. At the very top of the firm, the single biggest pressure is themselves. Really? Yes. So at the top of the firm, it's the pressure is what I need to do what I believe is right. And so if it's a if it's a if it's a let me pick some is very heated abortion. okay whether you're pro-choice or pro-life people are there's not many people in the middle a lot of people are really strongly one side or another and so if you're thinking about how to deal with that um you you know you have a personal kind of point of view and that that pressure to do what you think is right is is is tremendous at the top of the firm that are pressure levers are much less important.

13:21Although the executives or the people inside the firm are far more important than the external people. Now at the senior level, okay, what's fascinating to me is they have the highest level of pressure across almost all sources. So the people who are getting caught are kind of the senior level managers because they have a lot of pressure from above. They have a lot of pressure from beside them, from below them. Hey Kim, is that the C-suite or one below the C-suite? That's going to be more right below the C-suite. Like the VP, SVP layer. Right? So they're getting caught in the organization, the VP, the SVP layer.

13:59The junior manager, their pressure is coming from outside. It's coming from the press. It's coming from consumers. So more of their pressure tends to be outside. So the junior folks, they're feeling pressure from outside. the more mid to senior level folks are feeling it from everything but a lot from inside yeah and then at the top it's coming a lot from themselves so so in general what what we find what i think is interesting is that all of these different groups these pressure sources matter because they have different effects depending on where you are in the firm and so forth and now we could get even more granular.

14:42I wanted to say a lot of these pressures though, they're almost half of them at least are self-imposed pressures. They're not real pressures. And if you also conclude, like a lot of pro athletes will conclude, I don't care what the media says, I'm just playing my game. You could also make a case that a lot of that is a pressure you don't actually have to care about. Am I right about this thought? Yes. And I think if you go back, again, I'm doing some newer research. I'm very fascinated by this. If you go back to around 2017, 18, 19, there is a steady drumbeat of companies must take a stand. Right.

15:22Silence is complicity. Okay. Silence is complicity. Silence is complicity. If you don't take a stand, then you are complicit with the worst possible actions. and I you know look I work with a lot of of young people uh and I was talking to an undergrad who came to me and said that she was feeling this at that time that she had to publicly make a statement on a hot button issue yeah and I said what now I lived in post-communist Eastern Europe I spent a lot of time in the 90s going back and forth to China when I hear that you have no agency that you must do something. Yeah. You know, I get the tingles because I'm like, no, actually you do have a choice.

16:07And she said, Kim, I don't, because I'm told that if I don't take a stand, then my silence means that I'm on the wrong side. And I said, bring the student here who's giving you pressure. And here's what I'm going to ask them. Do you believe in child abuse, female abuse or animal abuse? And they're going to say, no. I'm going to say, well, where have you taken a stand? If you don't take a stand publicly, then I must presume you are for it. That's the logical argument. The reality is there are millions of issues, and you cannot actually take a stand on everything. Now, granted, there are some that people will argue are so - So important.

16:45You must take a stand, right? You must take a stand. But again, no, actually, you do have agency, and you do not have to. And so what I encourage executives to do is to at least step back and say, does this make sense? What are the potential ramifications and consequences and so forth? So I think a lot of this, there was this mean, this underlying narrative that you have to get engaged, that consumers want you to get engaged. By the way, all that research was deeply problematic. Yeah. It's particularly problematic and flawed. But regardless, there are a couple of key research elements. Well, go back, because I think what you said is the research is flawed because it asks a single question, basically.

17:26Like, do you think your brand should care about whatever you pick your topic? And everyone said, sure. But if you make them make a choice, like, should your brand care about a social topic or invent the next flavor for you or lower your pricing? they would say, oh my God, I want the brand to make a better brand for me. Isn't that right? It's even simpler than that. If you change the question frame and you change the options, either of them or both of them, I can get you a result that you want. So for example, if I just simply ask the question, do you think companies should take a stand on sociopolitical issues.

18:05And if I give you binary yes, no, two thirds of people will say yes. If I give you four options, always, sometimes, rarely, never, 51%, a majority of people say rarely or never. Those are two, same question frame, two different options, binary yes, no, four item options and all of a sudden the conclusion changes now i can go ask all sorts of other questions we have constrained resources here are choices of how you could invest in uh you could invest in um those resources you as a consumer how would you like your favorite brand to invest the resources at the very bottom is on socio-political activism so the problem with the question is that the people oftentimes who did that at that time wanted an answer of companies need to do more that's what they wanted and so well well the media definitely wants it because it sells news yeah yeah i mean this is managerial research but the companies sponsoring it were companies that played in the area of activism so there's an inherent alignment with the conclusion and the nature of the company that actually did the research which always for me it's kind of like I won't mention the company's name, but way back in the day, 20 years ago, there was a company that was a big consulting company on helping marketers measure marketing.

19:32And they kept doing research that said that marketers can't measure marketing. OK, well, that conclusion leads you to go need to buy their services. That is an inherent conflict of interest. Right. It's like my dentist who keeps telling me that I need to go get more dental work. So you get my point. So I think there can be an inherent potential issue if the company sponsoring the research has a dog in the hunt in terms of the conclusion. And so at that time, there was all this research that I think was flawed in design, either intentionally or unintentionally, I don't know, but that could mislead people.

20:12And what it did is it misled a lot of companies to believe that everybody wanted them to go spend their resources doing things that were generally not aligned with their company. I agree. Well, I mean, it's like, do I really want my mayonnaise to take a stand or do I want to pick the mayonnaise that comes in the right packaging for me? Or that's healthy, Mike. Yeah. Would I rather have Coke focusing on creating better, more healthful drinks that help address childhood obesity and diabetes? Or do I want them to take a stand on the Georgia voting reform bill? The reality is, is getting engaged in a reform bill like that requires time at the very top of the firm.

20:57You just don't, I mean, that could involve the board, the C-suite to evaluate. I wasn't there, but I'm certain it did. Right. And then you have the aftermath and you have the blowback that lasted for over a year. You know, how much time did that take and resources at the very top of the firm that could have been deployed into other areas? So this begs the question, if I take the pressure meter and I take the fact that a ton of these pressures are self-inflicted or self-interested pressures, like from the media or the activists, there's a huge list that says, danger, Will Robinson, it's dangerous to do this, you know, Nike, Gillette, but like Coke, tons of people taking a stand.

21:47you know, Salesforce, Mark Benioff, flip-flop this year. Why do folks still take a stand? And are there any companies that truly benefit from taking a stand? Because it sounds like if you take a stand, it hurts the business and it hurts your brand and it may actually hurt you as the person that does it. Yeah, no, I'm glad that you asked that question because I don't want that to be the takeaway, which is, you know, coming from the practicing world into the academic world, the answer to almost every question is it depends. And the reason we do that is because there are conditions where things are good and bad.

22:25There are things, it's not all one, it's not binary. Activism's bad. That's not the case. In fact, there are a number of examples where sociopolitical activism is really good. And the paper that I referenced earlier, the journal, In fact, Mike, I can give you links to some of these. There's a great model. I've got a great model in that paper that the practitioners use that helps you think about risk. You know, where on the model do you fit? Does the opportunity to engage in that sociopolitical activism effort put you? Is it high risk, low risk? Does it risk your market share? Does it risk your business model?

23:05So it's a model that helps you think through this. There are many companies that engage in lower risk activism. What I mean by that is it's not divisive. It aligns well with their consumers' beliefs. Give me a good example of that. Okay. So most brands are mass brands. So when I work with CEOs, I always say, how many of you manage liberal or conservative brands? And almost nobody does. Okay. Then you are targeting the masses. That means liberals, independents, communists, socialists, MAGA, conservatives, the whole spectrum. That means ideally you want to keep them and you want to grow them. Now, if you're a liberal brand, then be liberal.

23:43If you're a conservative brand, be conservative. But for the vast majority of brands, they want everybody. So risk increases when you move to a side or another side, because once you stand up on one issue, you own the party. And it shifts the positioning of the brand. So some good examples that have lower risk are brands like Dove's Campaign for Real Beauty. OK, what are they standing up for? The self-esteem for young girls. Who is against that? If you're liberal, if you're independent, if you're conservative, everybody generally is for improving the self-esteem of young people, young women, et cetera.

24:18So it's not divisive like abortion or gun control or, you know, any other issue that's so very clearly tied to politics. Another example would be PetSmart Charities. Now, by the way, it also doesn't risk their business model because they're focused on the beauty of young women, which is connected to their core positioning. And all the products they sell are, you know, beauty bar, a lot of stuff. So PetSmart Charities, what is PetSmart about? Helping improve the lives and well-being of animals. So what is their sociopolitical activism? They were born with a PetSmart Charities arm. From the very beginning, they donate roughly 6 % of their earnings to helping drive adoptions of dogs and cats.

25:02They are the largest adoption organization in the country. And so, again, who's against saving the lives of dogs and cats? Okay, that's a popular, universal, non-divisive issue. And, oh, by the way, it deeply aligns with their core business model. And, by the way, they do it in their stores. So you acquire the pet in the stores. they give you a whole new pet program i used to be the head of marketing strategy there we create a whole program around how to move you from adoption to becoming it you know to getting everything you need at the store to get a lifelong customer so there's a connection between the two nehemiah manufacturing firehouse i could go on and on there are many companies that do this really well but they're all taking stands that are close to the brand they're not running around you know talking about something that isn't in their wheelhouse so to speak it's close to the brand and it's not a liberal or conservative issue at the heart of this is unless you want to reposition your brand to be liberal or conservative do not stand up on a liberal or conservative issue because if i came out and told you i was pro-choice or i told you i was pro-life you would immediately pegged me as liberal or conservative yeah i told you one position and brands are the same way if they own one position it reflects the whole positioning of the brand and so it becomes them problematic because it shifts their position from being nike was for everybody but when nike decided to kneel for the american flag two conservatives they said we are anti-american were not patriotic.

26:41Liberals saw that as very patriotic and very American. But the problem is not everybody saw it the same way. And so then you potentially alienate a consumer group. Now, again, if Nike wanted to reposition itself as liberal, it's a good move. But my guess is that they didn't want to do that because they never changed their purpose. Their purpose was to motivate and inspire all people. Not liberals, all people. So, if you send it to us, we will post the kind of evaluation criteria. I want to flip over to an article you wrote called, Marketers Need to Pick the Right Company. Tell me what you mean by that and how marketers should think about picking the right company.

27:35so i'm i'm going to for a second because this is so personal to your audience it's hard for them to see it so what i'm going to do is i'm going to give you an example using young people okay so i constantly work with you know i'm at dart and i work with mba students and how do they make decisions on companies oftentimes external prestige yeah right oh is this a good brand name based on what my peers are saying or some other factor. Money. And my advice to them constantly, and I'll come back to the research, is if you find the place where it aligns with your capabilities and you love the work, you love the people and the culture, it will unleash your potential.

28:21You will be more successful, you will move up faster, and the money is not at the bottom. So when you are focused on picking a job or a company based on the prestige and not its ability to unleash, to tap into your potential, to unleash your capability, you are at risk. And I see this when students then will, former alumni, you know, sometimes call and say, gosh, I'm leaving this company after a year or two. It wasn't a good fit. So what we did is we stepped back and this is a 14 year project. I started this in my in the when i started when i converted you do some of the most lengthy deep research of anybody i've ever seen so well it's because it's impossible to get some of this stuff published because it's not you know the easy stuff to get published is oftentimes minor and incremental add a variable and what i'm doing is starting from scratch having to use grounded theory having to go see what practitioners actually do then we do empirical stuff in this case, we had three different data sets, job specs.

29:20I did over 500 interviews. And then we did two rounds of surveys over time. So it was just a very extensive project to figure it out. But basically what we did is we extracted what is the role of a CMO. So I have a model in this paper of what the pieces and parts of a job are. And then what we did is we evaluated alignment. So if you think about there are P &L roles and there are staff marketing roles. Those are not the same. Not even close. Yeah. And then there are CMOs who have been trained in different ways. Some CMOs have never had a marketing class. Other CMOs have marketing degrees. Some CMOs grew up in CPG.