The Wrong Way to Respond to Employee Activism

By Megan Reitz, John Higgins, and Emma Day-Duro

Leaders tend to be ill-equipped to handle outspoken employees. But with employee activism on the rise, leaders need to be wary of mishandling their response.

These missteps can be damaging for leaders and companies, which can suffer from reputational damage and ongoing employee unrest. The authors’ research into how employees speak up at work and politics in the workplace have shown that three fundamental traps snare leaders facing activism from their employees: over-optimism, a belief that you can be apolitical, and a rush to quick fixes. By better understanding where each of these approaches go wrong, leaders can chart a better course, one that is built on a more authentically engaged leadership.

Employee activism is on the rise and we expect it to become a defining feature of the workplace in the coming years. Employees are increasingly aware of social inequality and climate change and how their companies contribute to these ills, with millennials in particular seeming to be unwilling to turn a blind eye to their employers’ complicity. Climate strikes, calls for unionization, and support for Black Lives Matter and the #MeToo movement are becoming part of the reality in organizations, reinforced by the growing pressure from investors targeting environmental, social, and governance (ESG) aims.

But our last seven years of research into how employees speak up at work — and our more recent research into politics in the workplace specifically — have shown us that leaders tend to be ill-equipped to handle their outspoken employees.

That’s understandable. That social, environmental, and political issues should even have airtime at work creates a more problematic employer-employee contract than most leaders are used to and exposes them to a minefield of values and perspectives they are frequently ill-equipped to engage with.

Still, missteps in handling employee activism can be damaging for leaders and companies. For example, Wayfair’s nonresponse to employees asking the company to stop supplying furniture to inhumane immigrant holding facilities resulted in well-publicized walkouts that brought much more negative attention to the company. Amazon’s heavy handed crackdown on employee activists has done little to slow movement toward unionization, and has prompted a high-level resignation. Talented employees are increasingly poised to wrest power from management — or turn to competitors — and consumers stand at the ready to support employees and take their business elsewhere.

There are three fundamental traps that snare leaders facing activism from their employees: over-optimism, a belief that you can be apolitical, and a rush to quick fixes. Let’s look at each more closely — and then examine how you can avoid them.

The Optimism Bubble

When we asked the CEO of a large manufacturing organization about his response to growing employee activism, he leaned forward with a puzzled expression on his face. In a somewhat conspiratorial whisper, he said, “I think we’ll be fine. We’ve always run a meritocracy and people just get on with it. If people think something they generally just speak up.” But the survey we had just conducted at his organization pointed to a very different reality: one in which environmental and social concerns bubbled just below the surface, with employees afraid to bring them up.

Our research on speaking truth to power clearly highlights that the more senior you are, the more optimistic you become. As a result, you are more likely to underestimate the challenges your employees face and their feelings around so-called activist issues, whilst overestimating the degree to which they feel safe to speak up to you (and your skills in listening to points of view that don’t match with your take on the world). This is partly because your powerful position may mean you are intimidating to others, so you don’t hear what needs to be heard. It is also due to advantage blindness – leaders tend to carry multiple labels that convey status, for example, CEO, white, or male. When you have these labels, you can be the last person to realize how impactful they are. It isn’t until you don’t have those labels that you can really experience how consequential they are on the ability to speak up — and be heard.

The optimism bubble means that leaders can dismiss activism as rebellion: unnecessarily disruptive behavior. As a result, they pay no heed to growing dissatisfaction until it is too late. In the case of the optimistic CEO we worked with, he was oblivious to the fact that talented employees had begun to move to competitors because of their dissatisfaction with his approach, including the influential and insightful head of one of their employee networks.

Avoiding the optimism bubble requires you to take seriously the prospect that you are out of touch. Reverse mentoring and shadow boards can all help get the voice of a younger generation into your head. Employee network groups can be the organization’s antennae. And increasing organizational diversity through recruitment and promotion might force you out of an echo chamber of similar, passive, and uncritical opinions. Yet, to work, all of these steps require you to listen to be changed, rather than to defend and rebut.

Believing You Can Be Apolitical

In a blog post that swiftly went viral last year, Coinbase CEO Brian Armstrong directed employees to be “laser-focused” on the company’s mission and to cease to “engage in broader societal issues when they’re unrelated to our core mission.” He concluded that employees who wished to be at “an activism-focused” company would be helped to move elsewhere. Over 60 employees took him at his word and have subsequently left the company.

Appearing apolitical can be appealing when it seems so dangerous for leaders to do anything else. Some observers applauded Armstrong’s statement as the safest way for a business to operate. After all, by taking a stand, companies can lay themselves open to being cancelled or accused of playing politics, affecting their reputation with investors, customers, and potential employees.

The trouble is that the view that it is possible to be apolitical reveals a failure to understand that inaction is not neutral: it is also a political statement and stance. It also opens the company to criticism on the very issue it was hoping to avoid.

For example, McKinsey recently mandated that its staff in Moscow stay neutral during recent political demonstrations. But staying off the streets also served Vladimir Putin’s agenda, as was pointed out in a Financial Times column. In response to the backlash, McKinsey’s Global Communications Director, Ramiro Prudencio, issued a mea culpa in the newspaper a few days later.

Avoiding the apolitical trap requires leaders to accept that stakeholders can ostracize them for views that they offer — or the ones that they don’t.

A Rush to Quick Fixes

Human beings tend to be uncomfortable with ambiguity. Leaders and managers, because they have been told on numerous occasions that they are supposed to “manage” change and be in control, are perhaps particularly uneasy and are notoriously swift in their grasp for quick solutions. But that can mean insufficiently thought-through reactions to employee activism, in particular over-promising and under-delivering.

Leaders and companies that fail to truly practice what they preach often find themselves at the mercy of the same public judgment they sought to avoid. For example, firms such as BlackRock, Coca-Cola, PepsiCo, and Nestle have all recently faced accusations of either simply going through the motions when it comes to environmental issues, or saying one thing to one group while lobbying behind the scenes to achieve another.

Similarly, as numerous organizations rushed to make statements in response to the Black Lives Matter movement, many ended up being accused of running communication exercises as quick fixes with nothing to stimulate or support meaningful change underneath them.

To avoid the quick fixes trap, have your executive team discuss their overall approach to employee activism as part of your strategic plan — being proactive, not just reactive, can help to avoid panicked responses. Link executive renumeration to ESG targets to encourage action and not just words.

In our analysis, avoiding all these traps depends on something more fundamental but less easily engineered than corporate process or policy changes. That is the degree to which you as an organizational leader are aware of, care for, and see yourself as responsible for wider societal issues beyond the boundaries of your corporate remit. Leaders who fail to see themselves and their actions as part of that larger system tend to be those who don’t see developing problems, embrace inaction as neutral, rush to half-hearted solutions — and suffer the consequences along with their organizations.

We recommend asking yourself and your colleagues these two underlying questions deeply and regularly:

  1. What are the larger shifts in society around the globe that will have an impact on the values your people and customers will take for granted within the next few years?
  2. What are the intended and unintended impacts your leadership choices are having on the world around you?

We find that many leaders we speak with, given a moment to think over these questions, recognize their organizations to be actively perpetuating, or tolerating, societal inequities. We also find that they can fan sparks of activism in many leaders who long to initiate real positive change in the world.

Published on February 26, 2021 by Harvard Business Publishing. You can reed the original article here.