The technology industry has stepped forward to exert economic pressure and moral suasion on the state of Indiana in the wake of the passage of a controversial law that may be discriminatory against lesbians, gays, bisexuals and transgendered people. A few weeks earlier, Howard Schultz, CEO of Starbucks*, began a discussion of race in America, inviting employees and community members in seven cities to company stores for an open microphone chat. This is a deviation from the norm for business leaders, who have more often avoided such open debate in favor of private meetings with government figures.
I had lunch today with Mike Gregoire, the CEO of CA*, a large software company. Last Friday, he wrote a post for the company blog which expressed his opposition to the Indiana law. He told me, “I have a diverse mix of employees who must feel completely comfortable when they are out serving their clients. Whether you are an Orthodox Jew or a gay person, you have to be able to be served food or buy clothing, the basics when you are on the road.”
This is consistent with the strong position taken by Salesforce CEO Marc Benioff, who has a substantial operation in Indiana. Benioff announced, “We are canceling all programs that require our customers/employees to travel to Indiana to face discrimination,” in a Twitter post. Benioff has a $2.5 billion unit in the state, Exact Target in Indianapolis, with 2,000 employees.
Why does this change in approach matter? It is in keeping with the new expectations of business to lead societal change. In the 2015 Edelman Trust Barometer, we found that 81 percent of respondents said that business can make a profit, while also improving society. In most of the markets surveyed, we found a substantial trust edge (between 15 and 20 points) for business over government on the basis that speed of action and ability to execute on ideas are superior.
But the most important new part of the equation is the power of the employees to drive change. The horizontal, peer-to-peer axis of communication has emerged, with friends and family, fellow employees and social connections driving conversations. Smart companies are taking on these societal issues because their employees want to work for institutions brave enough to take a stand and committed enough to use the strength of supply chain for leverage.
CEOs considering whether or not to take a public stand should have as a governing factor whether their companies have a natural connection to the issue or comparative advantage because of expertise. On a matter of broad human rights such as Indiana, I would argue that all companies have that connection. Be guided by this quote from Abraham Lincoln in the midst of the Civil War: “Fellow citizens we cannot escape history. We of this Congress and this Administration will be remembered in spite of ourselves. No personal significance, or insignificance, can spare one or another of us. The fiery trial through which we pass, will light us down, in honor or dishonor, to the latest generation.” For business, now is our time.