Good morning.
It’s a sign of the sad state of U.S. public debate that nothing escapes political polarization these days, business included. Rising corporate attention to social issues—racial justice, climate change, inequality—is derided by commentators as “woke” behavior, with pundits on the left dismissing it as insincere posturing, while those on the right attack it as unwise politics. Friday’s commentary by the editorial board of the Wall Street Journal—”Woke Capital’s Political Warning“—is just the latest.
But when you talk to CEOs who are leading the way on this, their justification is strictly business. They’re motivated first and foremost by winning the war for talent, but also by opportunities to differentiate themselves with customers and investors.
That was clear at a session Fortune held last week, in collaboration with McKinsey & Co. Beth Ford, CEO of Land O’Lakes, who has been focusing on the need to support rural communities, says it is “not a political statement,” but rather critical to the long-term survival of her business. “I was not from a small town; I was from the big city.” But in her new job she came to the “recognition that there was a hollowing out of rural communities. And to me, the way I thought of that from a business perspective is that this is where our members live.”
Likewise, Dan Schulman, CEO of PayPal, changed the way his company set wages for call center workers, focusing on their net disposable income rather than prevailing market wages. “I think it just kind of makes common sense that the number one constituency that every CEO probably cares the most about is their employees. I mean, everything emanates from that.”
David McKay, CEO of RBC, has spent a good bit of his time and attention on creating apprenticeships and training programs to provide pathways to good jobs for disadvantaged young people. With the shortage of talent the bank faced, he said, “there was an intersection of community needs and corporate need that led us to focus on youth and youth inclusion and youth diversity.”
“At the end of the day, your biggest differentiator is going to be: do you have the best talent?” said Chip Bergh, CEO of Levi Strauss. “So doubling down on talent is critical. And so the large investors, BlackRock, Fidelity, the guys that are long-term investors and companies, they want to know what you are doing on diversity and inclusion, what you are doing to drive engagement with employees.”
So don’t expect it to stop. The business focus on social goals is not a passing political play. It’s a fundamental business trend. And all signs suggest it will continue to grow.
Separately, my vote for the best Super Bowl ad goes to GM, for its very funny “We’re coming for you, Norway” spoof. It may even convince me to buy a GM EV. Watch it here. News below.
News below.
Alan Murray
@alansmurray
[email protected]
