CEO activism needs a modern-day blueprint
Over fifty years ago, Lewis Powell wrote a memo for the U.S. Chamber of Commerce outlining the importance of political power for business leaders. Through time, we understand the political power of business leaders, and now CEO activism is a modern take on it. We need a modern-day Powell memo to inspire more business leaders to take on issues of social and environmental importance. It is a new day for stakeholder capitalism.
CEO activism is a necessary business strategy. Business leaders across industries recognize their power to create movements, influence public policy and make lasting changes in their communities.
However, CEO activism is still in a Wild West phase with no clear blueprint on how to do it, let alone how to do it well. Inspiration is aplenty – think Salesforce, Patagonia and Nike leaders taking bold stances – but for a CEO who is just starting to adopt an activist philosophy, it can be overwhelming.
To understand where activism is headed, it’s essential to look at where we’ve been.
The Powell memo
The birth of CEO activism began with what is today known as the Powell Memo. Written in 1971 by future Supreme Court Justice Lewis Powell, he penned a piece for the United States Chamber of Commerce calling for businesses to be more aggressive and active in the political landscape. It was the first time there was a call for business leaders to become more politically minded.
The memo was widely regarded as pro-enterprise while being anti-communist and anti-socialist, a concern of the time. Powell directly addressed his worries of our society becoming too socialist if businesses didn’t embrace their power to get more engaged.
Although it was written nearly 50 years ago, the Powell Memo got a lot of things right. It inspired the Chamber and, consequently, business leaders to act. It began a dialogue that was needed at the time, and it kept the conversation going on if, when, and how business leaders should get involved in public, civic and community issues. It also shined a light on the power that CEOs have to make a difference in this world.
Interestingly enough, some of the threats Powell outlined – such as the rise in interest among young people toward socialism – still pertain.
It’s taken half of a century, but business leaders are now putting into practice what Powell forecasted. A number of these questions are still relevant for business owners today, for example: questioning their role in important issues, deciding what’s best for their stakeholders, including employees and, of course, what’s best for their bottom lines.
Now, it’s time for a new Powell Memo – one that not only calls for inspiration but an actual how-to guide for business leaders to make the kind of impact they want.
A new Powell memo
If I were to update the Powell Memo for today, here is what I would advocate for:
Embrace substance
The original Powell Memo outlined the need for research from universities and other institutions to support changes. Likewise, today’s business leaders need to take the time to develop and read research on critical issues that may call for their direct example. Being an influential CEO activist requires substance of thought and action.
Align on mindset
A new Powell memo will encourage leaders to pick a camp: Do they believe business can be a force for good, or do they believe business is only about profit? It is vital that business owners who want to practice activism come from a place of altruism, not greediness. Profits and organizational culture can drive purpose, and purpose can keep profits and corporate culture centered on what matters for business and society.
Convert ideas to thought-out actions
Business leaders need more practical guidance on how to be civic-minded. Everything from how they can pick a cause to how stakeholders will respond to this activism needs to be outlined, so their efforts are met with results.
Redefine where activism can be practiced
Powell listed universities, the media (via an advertising budget) and the government as three areas where CEOs should voice their opinions. Today, CEOs have many more options to spread the word on a stance or community cause. This can include public speaking, personal social media feeds, company messaging, opinion pieces in their corporate communication, etc.
Do not avoid engaging in policy conversations in your workplaces. Business leaders can host lunch or after-hour policy conversations on relevant issues affecting the company’s stakeholders. These discussions are not about gaining agreement but facilitating perspectives to gain a broader understanding. The result should be a more robust and empathetic policy view.
A modern-day Powell memo would address all of the different communication options for CEO activism.
Empower your business as a power for the common good
As a whole, the Powell memo did in 1971 what no one had done before: Encouraged business leaders to step into their power and influence in a meaningful way. We need this same type of leadership and inspiration today to encourage the leaders who have been inactive while also providing practical advice to those who have already boldly started.
Today, the new Powell memo needs to articulate how the power of business can be a force for good in business and our society.
References
Memorandum: Attack on American free enterprise system | Lewis F. Powell Jr. papers | Washington and Lee University School of Law. (n.d.). Scholarlycommons.law.wlu.edu. Retrieved June 8, 2021.
The Powell memo: A call-to-arms for corporations. (2012, September 14). BillMoyers.com.