The purview of executives is growing ever wider. In the past their main focus was on employees, consumers, competitors, suppliers and other economic agents – the so-called market environment. Now, they also have to consider a growing non-market environment. This covers regulators, non-governmental organisations and even social movements. These entities share what can be termed an “activist” style, which we define as the use of social media and public opinion to prompt changes in corporations’ behaviour or actions.

As a result, executives now need to be prepared to proactively identify and interact with these activists. While such interactions are typically unpredictable, following some key steps can help executives negotiate these engagements while ensuring little or no reputational or financial impact for themselves or their organisation.

Recognise your constituencies 

The first step is to have a proper understanding of the different activist types and the tactics they might employ. Activism can take many forms. Sometimes it's a single high-profile individual, driven by personal convictions. Investor Carl Icahn, for instance, attempted to install board members at McDonald’s to change how its suppliers treated pregnant pigs – a cause raised by his daughter, an animal rights advocate. Consumer groups may also act, using legal means to challenge perceived injustices. Dunkin’ Donuts was sued under the Disabilities Act for charging more for plant-based milk than for cow’s milk, a move led by customers with allergies and intolerances.

Other activists operate on ideological or moral grounds. Bud Light faced backlash from its traditional customer base after partnering with Dylan Mulvaney, a transgender influencer, in a clash that cost the firm its market lead. NGOs and watchdog groups often act on behalf of wider society. The European Center for Constitutional and Human Rights, for example, took Volkswagen to court over alleged forced labour in China – even though the company’s internal probe found no wrongdoing, the reputational fallout was enough to prompt the carmaker to withdraw from China’s Xinjiang region.

Reasons for attack

Activist groups can target companies for a variety of reasons, and it’s important to understand why you might be on their radar. Wealthy private sector firms are prime targets, as their ample resources can make them more inclined to accept activist demands to avoid public battles. This was the case with McDonald's, who took the decision to improve its production chain after pressure regarding its treatment of animals. 

Additionally, targeting leading firms can potentially create a ripple effect that impacts the rest of that sector. For example, when Shell was compelled to publicise its carbon emissions by a Dutch court, it prompted other major oil companies to follow suit.

Companies that outwardly champion social responsibility are often targeted for their perceived hypocrisy. Minor discrepancies between their stated values and actual practices can lead to accusations, as Nike experienced regarding their alleged use of sweatshop labour. 

Paradoxically, activists may also target companies that share similar values, understanding that these organisations tend to be less confrontational and more likely to make concessions, exemplified by Patagonia's response to challenges related to their labour practices. Activists can also go on the attack for political gain, as seen in Republican candidate Ron DeSantis's confrontation with Disney over LGBTQ rights. Finally, activists may resort to personal criticisms of leaders for their missteps. First proposed by Saul Alinsky, the “Sun Tzu” of social movement tactics, this involves targeting individuals, and their reputations, to isolate and pressure them into changes.

Prepare for the worst

While such actions by activists can be fast and come out of nowhere, you can take some pre-emptive defensive steps so that you are at least prepared for the worst.  Having a process in place can ensure you keep a cool head in the the often heated battle to win the “hearts and minds” of public opinion.

1. Have a team specifically trained to deal with these situations and ensure that clear protocols are in place so you know what steps to take before you need to take them.
2. Do not leave the management of a reputational conflict to a team of lawyers or economists. Social and political conflicts are won by perceived legitimacy – and neither legal nor fiscal arguments can guarantee that. Harvard’s former president Claudine Gay was coached by a legal firm before her disastrous appearance at the US Senate where she was asked about discrimination at the university. Her decision to answer along legal lines resulted in her losing her job.
3. Have a reputation for having powerful friends. Building alliances before a crisis or conflict even arises can actually help deter attacks, or ensure they prefer to challenge easier targets.
4. Most conflicts are decided by the tribunal of public opinion. Ensure you have a good reputation with journalists, and these days with influencers, before they start writing about you.

How to respond

Try and put yourself into the minds of the activists. Know what the real issue is, who are the relevant actors, what information moves the issue and what assets you need in order to win. The key is to feed those actors with the right inputs so that they respond to your advantage. This is what’s often defined as reflexive control. 

Try to co-opt the more moderate critics so that the more extreme activists find themselves isolated. One solution that many firms have adopted is hiring the more moderate activists or funding their initiatives. For example, the historical origin of the human resources function in UK firms was a deliberate policy to recruit social activists and put them on the payroll as a way to moderate them and their impact. 

Never hide, never lie, never say half-truths and never look sneaky. BP has twice had CEOs who were not 100-percent honest when informing their boards of serious personal indiscretions, while Laurent Freixe, then CEO of Nestle, also suffered a similar fate more recently. In each case their lack of total transparency was ultimately what cost them their jobs.

Never, ever make your reaction to a crisis the crisis. Activists will deliberately try and provoke leaders into an emotional reaction. Just ask Travis Kalanick, the former Uber CEO who had to step down after his aggressive responses to a string of accusations about the firm’s culture. As Alinsky states in his landmark book Rules for Radicals: “The enemy properly goaded and guided in his reaction will be your major strength”

Above all, activists should be seen as a useful learning opportunity for companies. Often they have good reasons, or interesting arguments that are driving their actions, sometimes they are right. Regardless, they represent valid segments of society and need to be listened to and not simply dismissed. Besides the need to have tactics ready to deal with them, as detailed in this piece, more importantly companies should consider them as a valuable stimuli to think about the firms long term contribution to relevant social issues.

Conflicts with social and political activists are often public, dramatic and fast. Everything is highly weaponised and carries high corporate and personal reputational stakes. They are easily experienced emotionally, and therefore often produce rushed and mistaken reactions. Plans, protocols and an expert team who are prepped and ready to respond are the only way that you can ensure a measured reaction and a positive outcome for you and your firm.