Bystanders no more, Americas CEOs must pay attention to societal divides

Corporate America continues to be a powerful character in partisan politics, whether its Florida Governor Ron DeSantis attacking woke businesses or Senator Bernie Sanders slamming corporate greed. Fearful of fanning the flames, many corporate executives believe its best to steer clear of divisive topics altogether.

While a risk-averse approach is understandable, todays business leaders have no choice but to engage. The discords shaping the country right now transcend the red-blue party line, implicating age, generation, race, gender, sexuality, and religion, provoking a fierce sense of loyalty and belonging.

In this supercharged climate, Americans are often turning their gaze to businesses and asking them to get involved. The next generation of business leaders needs to understandrather than avoidthe political, social, and cultural divisions that shape the United States so that they can successfully lead their companies.

As business professors, weve taught hundreds of MBAs about the American divides since 2017, and weve seen an outsized, genuine interest in tracing the roots of division in this country. Ahead of the midterms, voters are more polarized than ever before. U.S., political polarization has increased at a faster rate over the past 40 years than in comparable countries: 77% of Americans believe the country has become more divided than it was pre-pandemic.

Business leaders have to play a rolebecause whether inadvertently or not, theyve contributed to many of the nations fault lines. Our students know this, but they often dont know where to begin. There are a few key principles that corporate leaders should recognize.

The decisions that companies make cannot and will not be divorced from their sociopolitical backdrops

Business practices often create conditions that exacerbateor sometimes mitigatesocietal divisions. In the Midwest, companies moves to outsource labor abroad have left once-thriving manufacturing towns desolate and struggling, contributing to Rust Belt residents feelings that coastal elites have left them behind.

The last decade has also revealed that social media platforms face a critical challenge when writing their algorithms and speech and misinformation policies. The boundaries they set directly shape what information voters come across on the Internet, and such policies often elicit polarized reactions in themselves. Business leaders must realize that theyre a participant, not an observer, in the cultural divides.

Shareholders, employees, and consumers expect companies to be better citizens

Now more than ever before, no matter where an executive aligns personally on the political spectrum, his or her decisions should consider how to do right by the community their business impacts.

Employees who are satisfied with their employers social and environmental impact are likelier to stay at their companies for the foreseeable future. Some 70% of investors want to invest in companies whose values align with their own. Similarly, 70% of consumers believe that its important for companies to take a social or political stance. When peoples faith in the government to do right by them fades, their expectation of businesses to fill the void grows.

Companies that stay out of divisive issues will feel the consequences

After Basecamps CEO imposed a no societal and political discussion policy, a third of its employees walked out on the company. Beyond internal politics, companies that are hesitant or slow to respond face weakened consumer reception and trust. Still, companies dont need to alienate one group in order to weigh in on the discourse.

Its imperative that business leaders learn to communicate across divides. Regardless of personal political preferences, business leaders must work on their civil discourse skills to ensure that they can find common ground with people on different sides of lightning-rod issues.

Its critical that executives remember that these issues are not zero-sum: Progress for one faction isnt necessarily a loss for the other. The opponent cannot become your enemy. Disagreeing without being disagreeable is possible if the two sides can have empathy. This strategy has worked for Yelp. The review platform is a model for how having a strong sense of values and developing business policies that reflect those values can enhance employee loyalty and help companies navigate fraught waters.

Polarization is only increasingand companies can no longer turn a blind eye. That doesnt mean CEOs need to pick a party or have all the answers to eliminating hyperpolarization. As educators, were investing in a new generation of business leaders who seek to understand divides at the starting point, accept the responsibility to consider the impacts of their decisions on the divides, and seek creative and constructive dialogue about alternatives. When business leaders understand America, they can speak to their numerous audiences in a way that resonates with stakeholders, instead of alienating them.

Bruce Usher is a professor of practice at Columbia Business School and co-director of the schools Tamer Center for Social Enterprise. Todd Jick is a senior lecturer in discipline in business and the Reuben Mark Faculty Director of Organizational Character and Leadership of the schools Sanford C. Bernstein & Co. Center for Leadership and Ethics.

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