The politics of business: 'crazy for good'

Politics, as they say, is a tricky business.

For companies this makes the politics of doing business in tricky places ... particularly tricky.

This is so even (or perhaps, in complex settings, especially ...) where a firm is trying to promote public good-spiritedness and aspirational values, typically in pursuit of its strategy for market position or building reputation / mitigating reputational risk.

Last week in Zimbabwe, Coca Cola found that its new can of Coke opened something of a small can of worms -- highlighting how even firms which adopt a studied neutrality on domestic politics can unwittingly find themselves forced to say where they stand on tense, changing local political issues, and in hard cases to make or avoid value-ridden judgments about which side of history they [may be perceived to] stand on.

The Zimbabwe issue arose as an incidental part of Coca Cola's global marketing / social awareness campaign 'Crazy for Good'. One feature of this is an adaptation of the standard red Coke can, altered to show open hands -- waving, reaching out to each other.

The problem (if it is one) is that in Zimbabwe, red is the colour of the Movement for Democratic Change (MDC-T); an open-palmed hand has long been its distinctive party symbol.

By contrast, its rival (Robert Mugabe's ZANU-PF party) is typically associated with the clenched fist gesture so often used by its long-time leader.

The 'Crazy for Good' / 'Open Friendship' campaign and its new Coke can happened to coincide with the lead-up to probable 2013 elections given that the mandate for Zimbabwe's dysfunctional post-2008 ZANU-MDC power-sharing government expires at the end of next month. Some over-sensitive ZANU politicians accused Coca Cola of blatantly aligning its brand with the MDC -- just in time for electioneering. The brand I suppose is typically associated, through the company's efforts over decades, with fun, freedom and friendship.

Coca Cola of course can easily refute the suggestion, pointing out that its brand colour has been red for decades and that this is a global campaign. (In a post-Arab Spring world in places with restless politicised youth one wonders how threatening some of the world's more paranoid and less secure leaders might find any new version of Pepsi's long-running mantra with its emphasis on a 'New Generation... !').

Anyway, the incident neatly raises the dilemmas that brand-sensitive firms can face in juggling neutrality on political issues (on the one hand ...) with their desire to align their brand with aspirational sentiments or universal values (on the other hand ...).

This dilemma is a subset of the wider difficulties global firms have in navigating local political turbulence, and often the strategic decision of whether to abandon pretence at neutrality, subtly re-align oneself for alternative possible futures, or hope that one's firm is not found exposed at the intersection of politics and business.

Coca Cola's recent full-page newspaper advert in nearby Swaziland raised some controversy -- it wished happy official birthday to the king of Africa's last absolute monarchy, which has strongly suppressed alternative political expression (even if the royal family as an institution retains considerable popular loyalty especially in rural areas).

Then there's a firm like South Africa's Nando's which took a different tack: one advert openly mocked Mugabe, resulting in threats to its staff in neighbouring Zimbabwe -- it withdrew the adverts, perhaps having calculated that Youtube hits would continue soaring and that the kudos in the SA market was worth whatever happened in the much smaller Zimbabwe one.

Close political ties can be handy, but also be a handicap ... That is, these issues are obviously especially acute in places like Angola where the local business elite (whose cooperation may, as there, be needed for any viable corporate strategy) is for all material purposes indistinguishable from the political elite. Relations, explicit or otherwise, that make things easy or which are unavoidable in the short term might carry with them long-term liabilities (whatever their implications on foreign corrupt practices laws and the like). Operating hand-in-glove with political elites carries both near-term reassurance and longer-term risks...; yet remaining even-handed can be difficult where one's brand or operation is singled out by either the incumbent or the opposition (or activists).

Greater demand for electoral democracy in sub-Saharan Africa means that firms which in the old days needed only to appease the incumbent may need to consider, for example, the risk that a change of administration might make them vulnerable where they are perceived to have 'taken sides'. Firms that have already sunk a lot of capital into a country or which hope to be there for a long time to come will need to strategise around the prospects of change and of the implications (there and abroad) of enforced lack-of-change.

Sometimes the risks are in plain sight; sometimes they are foreseeable even if unlikely; sometimes they take firms by surprise. In some cases, mere presence in a controversial country represents a value-based decision by reference to democratic or human rights norms -- or is seen that way.

In many cases, the firm's licence-to-operate and brand will emerge intact, perhaps only with a rap on the knuckles; most will be able to make a good fist of staying well away from political controversy. Firms that are newly entering have one set of dilemmas, but those with existing investments tied up in a country to some extent have one hand tied behind their backs in terms of backing down in the face of politicised counter-campaigns. The main consideration for brands with global exposure is an awareness of the importance of consistency across markets on value-based issues: the left hand needs to know what the right hand is doing.

Policy choices impacting the business environment can be highly political -- raising the question for business of when and how to explicitly join national conversations about such issues. In considering the role for socio-political leadership by business, this blog has referred for example to the dilemma individual firms face in South Africa in putting their heads 'above the parapet' rather than remaining silent. Speaking under the umbrella of a business chamber mitigates that risk. Note that this last week apparently saw a Guatemala business group criticising the genocide conviction of a former head of state: now that takes 'private' business engagement on public interest issues to a whole different level!

Jo

See the South Africa version of the Coca Cola 'Crazy for Good' campaign -- here.

See one (note -- mainly anti-ZANU) news story of the Zimbabwe-Coke story -- here.

See my earlier post on the Swaziland-Coke story -- here.

See the Nando's advert about Mugabe -- here.

See discussion in an earlier post of Coca Cola's entry into Myanmar -- here.

See discussion in an earlier post of (limited) reputational risk from mere country presence -- here.