Shutup and Sell: Entrepreneurs Shouldn't Discuss Religion, Politics Or Sex(ual Orientation)
In 2003, the lead singer of the country music group, The Dixie Chicks, criticized then-current President George Bush during a concert in London. The reaction among the group's American fans, who were largely politically conservative, was visceral and negative. One irate fan sent the group a death threat, which offered them "clemency" if they would, "shut up and sing." Business leaders should not need a death threat to encourage them to follow similar advice, substituting "sell" for "sing."
A startup leader's primary responsibility is to maximize the return to its stakeholders, which include the company's global and local neighbors, employees, suppliers, customers and investors. When a corporate leader makes a public statement that increases the friction involved in satisfying their company's value proposition, the executive is betraying each of these constituents.
Be boring in public. If you want to be an opinionated blowhard in private, go for it. Just keep an eye out for errant cell phone videographers whenever you begin to bloviate. By focusing on delivering your value prop to your customers, you will never risk diluting or otherwise compromising your stakeholders' collective returns.
Entrepreneurs with a high-profile role in their organization cannot credibly claim they were speaking "personally" when they make a divisive public comment. Perception is reality, even when controversial utterances are not intended to be associated with an executive's employer.
Associations are powerful. For instance, during the late 1960's, when John Lennon performed outlandish stunts to draw attention to the Peace Movement, including posing nude for the cover of his solo album Two Virgins, Ringo implored him to consider the impact he was having on The Beatles' brand, saying "Ah, come on John. You're doing all this stuff and it may be cool for you, but you know we all have to answer. It doesn't matter, whichever one of us does something, we all have to answer for it." Even after the Beatles broke up, much to their chagrin, each member spent the remainder of their musical careers "answering" for the actions of their former bandmates.
Angry People Are Motivated People
When a business leader takes a definitive position on a contentious issue, they are guaranteed to anger and alienate a portion of their current and potential customers. Angry people are usually inspired to act against your company's interests. Worse, this negative enthusiasm generally lasts longer than the short-term positive reaction your strong opinions might elicit from people who agree with you.
In the case of the recent Chick-fil-A incident, the initial response was an outpouring of support for the company by people who share the CEO's sentiments. In particular, the Chick-fil-A Monday counter-protest resulted in a one-day sales record for the franchise. However, the long-term impact of the controversy is unclear. A month from now it is unlikely that a supportive customer will drive across town to demonstrate their solidarity with the company. In contrast, it is more probable that someone who was offended by the CEO's stance will continue to boycott the restaurant chain long after the incident is forgotten by otherwise supportive consumers.
Corporate missteps are not limited to voicing personal opinions in public. This past Spring, David Friend, CEO of the backup software company Carbonite, made a hasty decision on a Saturday to pull the company's ads from a national radio talk show after being pressured by reactionary political groups. The company paid the price for this rash decision, as its second quarter sales were down, causing the company's stock price to drop 15% in a single day. Mr. Friend attributed a portion of the lost sales to the radical and unplanned change in the company's marketing mix during the quarter.
When I headed online marketing for GoToMyPC and GoToMeeting, we also received various flurries of emails from political groups, entreating us to pull our ad dollars from radio and television shows of which they did not approve. We resisted such pressure, realizing that even though the onslaught of calls and emails appeared to represent a cross section of customers, in reality, they were generated by small groups of political operatives who did not speak for the general population.
Startup executives should not only keep their opinions to themselves regarding volatile societal issues, they should also resist changing their business models when they are pressured by politically motivated organizations.
Shutting Up And Not Singing A Lot
After their controversial comment, the Dixie Chicks spent the remainder of 2003 explaining their sentiments, rather than selling their records. Their follow-up album, released in 2006, won five Grammy Awards and eventual sold a respectable 2.3 million units. However, their core audience of American country music fans greeted the album with a lukewarm response. A disproportionate share of the album's sales was generated in Canada and Europe. Although the Dixie Chicks no doubt enjoyed the overt support of fans who shared their low opinion of President Bush, it is likewise clear that a significantly larger number of former fans were motivated to ignore their new album.
Boasting two of the top-ten bestselling country music albums of all-time, the commercial success of the Dixie Chick's 2006 release mattered little to the band's overall financial viability. However, most business leaders, especially emerging entrepreneurs, cannot afford to make a similar trade-off between speaking their mind and impairing their organization's financial performance.
Although businesspeople clearly share the same freedom of speech prerogatives afforded anyone not living under a totalitarian regime, I recommend they focus on improving their return to their stakeholders. If you feel compelled to lend support to a cause which may potentially draw negative attention to your company, step down from your day-to-day responsibilities, distance yourself from your former company and then begin a new career as an outspoken activist. Your stakeholders will thank you as your company will be able to deliver on its implicit promise to maximize their outcomes, irrespective of your public pronouncements.
John Greathouse (@johngreathouse">https://twitter.com/#!/johngreathouse">@johngreathouse) has held a number of senior executive positions with successful startups during the past fifteen years. At Computer Motion (RBOT), he was the CFO and VP of Business Development. At Citrix Online (CTXS - formerly Expertcity), Greathouse served as CFO and SVP of Strategic Development. At CallWave (CALL), he served as the SVP of Sales & Bus Dev. In his capacities at Computer Motion and Citrix; Greathouse spearheaded transactions which generated more than $350 million of shareholder value, including Computer Motion's initial public offering and the sale of Expertcity to Citrix for over $230M. Greathouse is a Partner at Rincon Venture Partners (www.rinconvp.com">http://www.rinconvp.com">www.rinconvp.com), and you can follow him at his blog at here.