Searching for your first board role? Start here
To transition into the boardroom, you need a brand, a unique board proposition, and a governance mindset - but you also need to consider the value you add and the cultural fit...
Brain Circuits
So, you’re facing a boycott. But will it hurt you in the long run?
In the age of Culture Wars, companies can easily trigger backlashes from customers in response to their actions or the behavior of their leaders. But will such reactions cost them in the long term? Not necessarily, says Aharon Cohen-Mohliver.
Notable recent consumer boycotts
Tesla CEO Elon Musk’s political stances and his online behavior provoked an intense backlash, with long-time customers threatening to boycott the brand. But recent history suggests a more nuanced relationship between controversy, outrage, and long-term firm outcomes. When the dust settles, Tesla might even benefit from the boycott.
In 2012, for example, Chick-fil-A’s CEO publicly opposed same-sex marriage. The backlash was swift, with calls for a boycott across the US – but the outrage also galvanized a countermovement led by former Fox News anchor Mike Huckabee, then Governor of Arkansas. His creation of “Chick-fil-A Appreciation Day” drew massive consumer support, leading to record-breaking sales. Over the next decade, Chick-fil-A rose from 15th to third in US fast-food sales, surpassing Wendy’s, Burger King, and Taco Bell, despite having far fewer locations.
Nike faced a similar storm in 2018 when it made Colin Kaepernick – the NFL quarterback known for taking the knee during the national anthem – the face of its ad campaign. Consumers burned their Nike gear, and the #BoycottNike trended across social media. The day after the ad was released, Nike’s stock dropped nearly 3% – but rebounded quickly, closing the week higher than where it started. By the end of the quarter, sales were up 10% and online engagement had surged by 61%.
The twist in the Tesla tale
Tesla’s case is a new development in the story, with protests coming not from ideological outsiders but from its customer base. This is potentially more damaging. (Anheuser-Busch, for example, lost its position as the best-selling beer in the US after its top brand, Bud Light, collaborated with trans influencer Dylan Mulvaney.)
But here’s the twist: consumer outrage tends to play out over days or weeks, but buying a car is a much slower decision, often taking months or even years. And by the time such purchasing decisions are made, ideological flashpoints will likely have shifted to different issues.
More significantly, when protestors use “radical repertoire” tactics, they may galvanize support from those on the opposite ideological side. In Tesla’s case, the protests may help it penetrate a demographic it has long struggled with when it comes to conservative buyers. Until recently, the brand was an icon of coastal progressives, but amid the backlash, it may now resonate more with audiences who previously disdained it, and the real impact of #TakedownTesla on the firm’s future won’t be known until the dust settles.
Key learning
If history is any guide, your brand won’t necessarily be damaged in the long term by the controversy itself, but by how protesters respond to it – and whether the people protesting are your stakeholders or their ideological rivals.
Authors
Related
5 strategic imperatives to transform geopolitical turbulence into advantage
Research indicates that 14% of companies report net positive effects from political risks that disrupted competitors, creating market openings to capitalize on temporary dislocations and long-term shifts in global trade patterns. Simon J...
How to scale with purpose: 5 lessons from Vinted
Milda Mitkute shares lessons from scaling second-hand clothes business Vinted into Lithuania’s first unicorn, and launching a new startup to make maths education more engaging and accessible for children. ...
Are your leaders ambidextrous?
Non-linear career paths that deviate from the functional norm in some way can produce leaders who deliver more impact. Consult the checklist to see whether you are promoting people with more diverse...
Learn Brain Circuits
Join us for daily exercises focusing on issues from team building to developing an actionable sustainability plan to personal development. Go on - they only take five minutes.
Explore Leadership
What makes a great leader? Do you need charisma? How do you inspire your team? Our experts offer actionable insights through first-person narratives, behind-the-scenes interviews and The Help Desk.
Join Membership
Log in here to join in the conversation with the I by IMD community. Your subscription grants you access to the quarterly magazine plus daily articles, videos, podcasts and learning exercises.