Best Practices

Best Practices


When the Houston Rockets general manager tweeted support for Hong Kong in early October, a firestorm erupted. There was serious backlash from China, and both National Basketball Association commissioner Adam Silver and player LeBron James tried to patch things up, prompting further backlash from fans in the United States about acquiescence and pandering to China.

The NBAs business relationship with China is reportedly worth more than $4 billion, not to mention the additional impact on marketing and sponsorship opportunities for players. This has prompted me to consider whether it is ever a good idea to mix business with politics, particularly in the lubricants industry.

Certainly the NBA fracas is not the first of its kind. And interestingly, not all instances of mixing business and politics have resulted in negative consequences. Consider Nikes focus on Colin Kaepernick in an ad campaign, which resulted in some temporary negative reactions observed in the companys stock price but ultimately was seen as supportive of the brand. Patagonia has been very vocal on the topic of protecting the environment, including donating its $10 million tax benefit in 2018 to environmental causes, and this hasnt hurt the companys growth trajectory. Thus, I think the key question for companies to consider is whether a political stance is necessary and if so, how to assess and minimize the risks while maximizing the benefits of such a stance.

For the small and medium-sized players in the lubricants industry, I would argue that there is little need to get involved in a political cause. Of course our products and industry are to some extent intertwined with the climate change debate, but the role of the small and medium-sized players on that front is to be prepared for and enable the ultimate changes that new technologies will bring. To the extent that you do enable such new technologies, I would promote such contributions and see the risks of such promotions as low.

Examples of this could be advertising new products that reduce fuel consumption or are tailored for wind turbines, and the like. I would avoid any other kind of political statements such as endorsement of political candidates or parties or positions on hot-button issues, as it is just not necessary and is likely to alienate some current or future customers. I would take steps to ensure that your employees do not take public positions on social or other media that could be construed as being posted on your companys behalf. I would also train customer-facing employees on how to handle politically sensitive conversations.

I do see a distinction between a business taking political positions and having social responsibility. It is becoming more acceptable, if not expected, for businesses to place social responsibility high on the company agenda. I encourage business leaders to take steps to improve sustainability of their businesses, such as by reducing waste, improving safety and conserving energy in their operations, and by taking steps to understand and improve how their products and packaging are disposed of by downstream customers.

Setting and achieving targets in areas of social responsibility and sustainability can be a powerful, positive statement to your customers as well as to current and prospective employees. I would also encourage companies to create links with their local communities and to do good works in those communities. I would avoid causes that are overtly political and instead support causes such as food pantries, house construction for the needy, park and playground improvement and other such causes that improve the quality of community life.

There may come a time that your company is virtually forced into taking a side on a controversial issue. Consider trying to low-key it rather than making it into a front-page event. Consider as an example the case of Delta Airlines, which some years ago decided to eliminate a discount it offered to National Rifle Association members in the wake of a terrible school shooting incident. The cutting of Deltas NRA discount became front-page news and resulted in the withdrawal (albeit temporary) of a significant state tax deduction. Ironically, it later came out that this discount was used by a startlingly small number of people-just 13.

In the end, there was no lasting damage to Delta, but I wonder why they chose to do this when the public at large, even those who are for gun control, would not be expecting the airlines to lead on this issue. Perhaps Delta took the action in order to avoid news coming out related to their ties to the NRA, in which case I wonder if it could have been done in a less visible way.

The message here is to consider carefully whether taking a side is really essential for your business, and if so, to plan carefully how and when you do it, and to assess and manage the risks involved before taking any action. In addition, if you do decide as a company that you must take sides on a controversial issue, be sure that you are consistent down the road on this issue and that the action you take is authentic and true to your company values and brand.

If yours is a large multinational company or you have an international aspect to your business, in addition to dealing with political issues you must be especially sensitive to cultural issues. Ensure that employees doing business abroad are educated in cultural norms and the historical background of places where they work. Consider having local agents or employees that can help company visitors navigate the landscape. China is a special case today given the high level of rhetoric going on between China and the United States, and I would ensure special attention is given to training employees working in the Asia-Pacific region.

I would like to recap key points here:

Dont take political stands if you dont have to.

If you must take a stand on a controversial issue, consider risks in advance and manage the process well.

Act in a socially responsible way and promote those actions. Social responsibility is distinct from political involvement.

Train employees on cultural sensitivities abroad, especially with regard to China.

Set expectations for employees on use of social media.

Sara Lefcourt of Lefcourt Consulting LLC specializes in helping companies to improve profits, reduce risk and step up their operations. Her experience includes many years in marketing, sales and procurement, first for Exxon and then at Infineum, where she was vice president, supply. Email her at or phone (908) 400-5210.

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