Companies will need a ‘cold risk-reward calculus’ when it comes to social issues, Edelman’s CEO says. Here’s what they should consider

“Companies will have to do more of a cold risk-reward calculation going forward,” Edelman told me over coffee in Geneva’s old town, ahead of a World Economic Forum meeting this week. “Because the world has become so politicized, that’s why,” he added.

One way to make that calculus, Edelman said, is for companies to “fix their own houses” before taking a very public stance through marketing campaigns or public statements by their CEOs. As Edelman found, the stakeholders who have the highest expectations are employees. And they expect “actions, not words,” of their employer.

Companies must listen to—and understand—their customers. Just because the Gen Z incarnation of the “yuppie” (young, urban professionals) demands a progressive stance doesn’t mean the average Joe in America’s heartland will agree. The right strategy may be different depending on whether it’s for Levi’s or Wrangler, Nike or Under Armour.

The last thing to bear in mind is that marketing teams and CEOs should be careful not to want to be everything, everywhere, all at once. CEOs shouldn’t always want to be the spokesperson for the company. (In fact, employees look to their direct managers for guidance, Edelman’s latest Trust Barometer, out next week, shows.) Marketing teams shouldn’t try to appeal to every consumer.

If it hadn’t already, AB InBev, the maker of Bud Light, will have learned a lot about the cold risk-reward calculus that Edelman preconizes this week. As my colleague Christiaan Hetzner noted yesterday, as the Mulvaney campaign backfired and Bud Light lost its title as America’s top-selling beer to Mexican rival Modelo, AB InBev “comforted investors by saying it was still the bestselling beer for all of 2023.” But as the latest retail sales figures came out this week, “now even that consolation prize is gone.”

More news below.

Peter Vanham
[email protected]
@petervanham

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This edition of CEO Daily was curated by Nicholas Gordon.