Tags: business strategy | presidential agenda | free trade

CEOs Must Modify Strategy in Year of the Fire Rooster

CEOs Must Modify Strategy in Year of the Fire Rooster

President Donald Trump greets Harley Davidson CEO Matthew Levatich as he arrives with Vice President Mike Pence to meet with executives and union representatives on the South Lawn of the White House on February 2, 2017. (Nicholas Kamm/AFP/Getty Images)

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Friday, 03 March 2017 10:14 AM Current | Bio | Archive

We are now several weeks into the Chinese New Year, which inaugurated the Year of the Fire Rooster. Not a bad moniker for the new president either, who has started off fiery, cocky, and disruptive.

President Donald Trump set off fireworks by doing the unthinkable — fulfilling his campaign pledges. Liberal activists and their media allies are busy trying to demonize Trump’s agenda. Trump responded by calling the media and fake news “the enemy of the American people.” The United States is more politically divided now than at any time since 1968, if not 1860.

With explosions and shrapnel all around us, how should corporate leaders conduct themselves?

With the best interests of shareholders in mind, executives need to take a deep breath and think strategically about the next four years.

Begin by avoiding the pitfalls of recent, high-profile corporate missteps — in a phrase, don’t be Budweiser. The beer company tried to solidify its hold among younger consumers with ads featuring the progressive Amy Schumer, followed by Budweiser’s Super Bowl commercial that seemed to criticize today’s immigration critics as 19th century Know-Nothings.

The Schumer ads had abysmal ratings. The Super Bowl commercial generated a Twitter storm of anger. What Budweiser — owned by InBev headquartered in Leuven, Belgium — overlooked is that a majority of white millennials in “flyover” country voted with enthusiasm for Trump.

Does Bud want this key demographic to quench their thirst elsewhere? And how would Belgians or Europeans react if an American multinational were to make a charged, emotional TV ads to influence their politics?

Another example is technology companies, ranging from Google’s Sundar Pichai, to Apple’s Tim Cook, to Amazon’s and Washington Post’s Jeff Bezos, joining efforts to stymie the president’s visa moratorium. While this stance is popular on the coasts, there seems little recognition among these leaders that high-tech must live with this president for at least four years. Already, this administration has dropped hints it will curtail the H1-B visa program, which these companies regard as an oxygen lifeline for tech talent.

When Donald Trump attacks companies, he is backed by the powers of the presidency and 45 million social media followers. No CEO can match that kind of power. How many will be able to stand up to the activist bee stings and threats of regular retaliation that will come from crossing this president?

On the other side, New Balance’s Matt LeBretton saw his website besieged with angry comments after he made a tepid endorsement of the direction of Trump economic policies. He was overwhelmed with images of New Balance sneakers being burned.

Move left, get targeted by the administration. Move right, watch the brand burn.

So, in this environment, what are CEOs and business leaders to do?

First, corporate leaders should stay out of the partisan fight. It does a brand no good to become a target for one-half of the nation’s activists, left or right.

Second, keep shareholders’ interests first, not the predilections of executives and consultants. The offices of government affairs, legal and communications of many corporations today are filled with people from the Clinton, Bush, and Obama administrations.

The same is true of ad agencies and consultancies. Many of these executives and consultants seem to want to hold on to last year. They should understand they are not in a political organization, they are in a shareholder-owned organization. They must make that mental transition or leave. Their position is not a holding post for them to reengage in government at a later date.

Third, get in step with the times.

This backlash against globalization will last for years. Taken to an extreme, this backlash could turn into protectionism of the sort that hobbled the U.S. and world economy, just as the Smooth-Hawley Tariff Act of 1930 helped start the Great Depression. But a good case can be made that after decades of liberalization and a broken immigration system, it is healthy to stop and rethink our policies from the perspective of the national interest.

Instead of joining public lawsuits against the Trump travel moratorium, tech leaders should ask for a top-level meeting to follow up on musings by the president that he might make it easier for skilled immigrants and foreign students studying STEM subjects in U.S. universities to become citizens. There is room here for business to offer good advice. A good place to start would be with the Commerce Secretary, Wilbur Ross, or as the president suggested, with senior White House Staff.

Fourth, corporate comments and messaging should center on the creation of American jobs. In this way, business leaders stay out of the crossfire, keep themselves in the good graces of the administration, blue-collar unions, and both sides of the aisle.

For example, when the president and Congress get around to amending the tax code to allow U.S. corporations to repatriate an estimated $2 trillion now held overseas at low tax rates, corporate leaders should anticipate restrictions on how this money can be spent.

While some will want to invest those monies into dividends, buy backs, or acquisitions, some portion of it will be restricted to create American jobs. Those who fight these restrictions, or seek loopholes around them, run the risk of drawing the ire of the administration and a large segment of working Americans.

In the most charged political environment in decades, business leaders need to stay out of the partisan fray and proudly announce the opening of every store or factory, and the creation of new groups of jobs.

Richard Torrenzano is chief executive of The Torrenzano Group, a New York strategic communications and high-stakes issues management firm. Mark Davis is a former White House speechwriter. Torrenzano and Davis are co-authors of "Digital Assassination: Protecting Your Reputation, Brands, or Business Against Online Attacks." Read more reports from Torrenzano and Davis — Click Here Now.

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When Donald Trump attacks companies, he is backed by the powers of the presidency and 45 million social media followers. No CEO can match that kind of power.
business strategy, presidential agenda, free trade
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2017-14-03
Friday, 03 March 2017 10:14 AM
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