Welcome back to Communication Breakdown, a weekly podcast from the Observatory on Corporate
Reputation.
Thanks for joining us.
I'm Steve Dowling in Silicon Valley.
And I'm Craig Carroll in New York City.
Each week, Steve and I take a look at strategies companies are using the shape headlines and
sometimes save their skins.
It's a post game show for PR pros.
This week, Trump lays siege to Los Angeles and CEOs… stay quiet.
The corporate silence is deafening, but no longer surprising.
The nation's second largest city, now the epicenter of President Trump's deportation campaign
as ICE began rounding up day laborers from home depot parking lots last weekend, prompting
demonstrations that were mostly peaceful with some isolated and significant exceptions.
The LAPD, Mayor Karen Bass, and California Governor Gavin Newsom insisted the situation
was under control.
But Trump insisted on sending in the National Guard and then the Marines and you know the
rest.
And among those caught up in the chaos, downtown LA's growing garment industry which had been
enjoying a post-pandemic revival.
But now, uncertainty rains after dozens of immigrant workers were taken away by ICE.
Some local business leaders have spoken up saying their employees are frightened and the
enforcement actions are indiscriminate.
But as far as outcries and reality checks go, that's about it.
Waymo, a subsidiary of Google, halted its autonomous taxi service after their self-driving cars
became the target of choice for some protesters.
Their statement was pretty sparse, abundance of caution, working with local law enforcement.
Like every other Fortune 500 company, they steered clear of commenting on the broader impact
of unrest or what's really happening on the ground in LA.
The protest in LA aren't just testing law enforcement.
They're testing language.
What can you say when every word is a trigger, when neutrality itself is interpreted as
complicity?
That's the type of brawn and why communicative caution has moved from illegal tactic to a leadership
imperative.
But there's a difference between being careful and being invisible and I think that's
what companies are choosing right now.
Unfortunately, there's no shortage of reasons for CEOs to not speak up.
I think the broadest of them seems to be this "it's not my lane, it's not affecting my
workers yet, it's not an economic issue yet.
It's localized in this blue city, in this blue state for now."
And I think also if I'm weighing these from an abundance of caution, immigration is also
an area where Trump has enjoyed the most support, although it is falling in some recent
polls, which we should get into later.
So opposing Trump, let alone opposing him publicly has not been the path of choice for most
business leaders.
Even when the economic implications, like over tariffs, have been obvious and dire. It reminded
me of, this is the first time I visited Australia and I was talking to some PR colleagues there
and one of them brought up the "tall poppy syndrome," which I had never heard before, but it makes
sense.
Usually about being too successful in making yourself a target, the tallest ones in the field
are the most likely to get cut down to size.
But in this case, it applies as well.
I think nobody wants to be a tall poppy.
There's a reluctance right now to stand out in this environment, be the first one to put
your hand up, you're likely to get it slapped down.
Yeah, we're right.
I mean, no one wants to be the tall poppy right now, sure.
But it isn't just about standing out that's risky.
I think it's standing out when you don't have clarity, you know, without knowing
what it is that's holding you up.
And silence right now might feel steady, but I think often it's a drift and drift doesn't
hold when the wind shifts.
You know, for me, corporate communication should be helping CEOs prepare before they're
visible, you know, because once you're in the frame, you know, you don't get to improvise,
so you need to know what principles you're standing on and whether it'll still
make sense six months from now, even three months from now.
That's what it means for a message to age well.
You know, not just survive the headlines, but to make sense and hindsight and the only
way to do that is to get clear on one thing before you speak or stay silent.
And that is what principle are we standing on?
You know, if you can't name it, the message is not going to hold and if it doesn't hold,
it's not going to help.
Yeah, I mean, this is not a new phenomenon, but it does feel more pronounced in this second
Trump administration.
And when things get uncomfortable, sometimes this instinct kicks in and corporate leaders
think that if they stand perfectly still, somehow people will forget that they're there.
Yeah.
It's not a sustainable position, but again, in this age of Trump, the news cycle moves so
fast.
Another factor, I mean, if you remember this time last week, you and I, we made the last
minute decision to talk about Elon and Trump on the rocks- that that relationship
had finally imploded.
That feels like a million years ago.
So if you're a CEO that's on the fence about making some sort of comment here, maybe
you're just banking that this will be forgotten too.
And you're right to say it isn't new.
You know, the instinct of freeze has been around for years.
What's different now is that the system almost rewards ambiguity- until it doesn't- and
in the age of Trump visibility comes with pressure, but invisibility doesn't mean safety.
It just means you're unprepared when your number comes up.
Yeah, I think another reason that, probably why if they were considering
making a comment at all that they're holding back is this dynamic that we've
started to call the TACO trade - Trump Always Chickens Out
I think everybody realizes and maybe banks on that, you know, nobody be surprised if we
woke up tomorrow morning, Trump has declared victory for some reason and pulls out of L.A.
like nothing happened.
And I think CEOs are familiar and probably warming up to this dynamic at some level.
As there going, why should I waste any political capital, take any risk of being seen as
oppositional to Trump when this could all go away in the blink of an eye?
But I worry that there's an accumulation of these things and to your point, staying silent
is putting people at risk.
Yeah.
It's a muscle that needs to be exercised.
I think companies need to be talking about things that affect them and affect their
communities and we can get into some ideas, maybe in a little bit about how they could be
handling the situation differently.
Yeah.
You know, sure, if this were just about L.A., I think that idea would hold up, but this
idea of like waiting it out and not burning political capital and just hoping he backs down.
This isn't staying in one city, right?
It's already moving in to markets where the company is operating, where their
employees live, where their brand equity is actually exposed.
So the risk is in that Trump won't follow through.
If that the situation escalates and you've done no prep, right?
There's no interon alignment, no clarity on who needs to hear what, no principal guiding
your posture if it hits your front door.
And if nothing else, this is the moment to get your position straight. Not so you can speak
today, but just so you're not scrambling tomorrow.
Yeah.
And just before we wrap up on the dynamic that's sort of gripping the corporate
communications field right now that we had two developments this week that I think probably
only reinforced this conventional wisdom and just to put a bow on it,
like the first one was that Elon backtracked, right?
Elon apologized after a phone call with Trump, maybe, you know, his pressure, maybe
it's just FOMO.
And so I think it reinforced that like being oppositional to Trump is not, is not a winning
strategy.
But Elon, as we said, is a special case.
I don't think everything that he does is instructive for, for the broader audience.
More importantly, I think was Christy Walton, whose father-in-law was a Sam Walton, the founder
of Walmart.
She bought a full page ad in the New York Times calling for people to mobilize and protest
against Trump.
That prompted calls for a mega boycott of Walmart.
I'm skeptical as to whether that pans out.
But it adds fuel to this anti-corporate sentiment on the populist right that I think is very,
very concerning for a lot of corporate leaders.
And it also interestingly drew out Walmart a bit and they gave a statement to the New York
Post condemning the violence in LA, supporting law enforcement, expressing concern for the safety
of customers.
But I do feel like they said the very bare minimum.
Yeah, I think this is where the lines get blurry pretty fast.
Christy Walton speaks out as an individual, but the name still carries institutional weight.
So even if Walmart's distancing is factually accurate, it doesn't shield them from the narrative
drag that's occurring, right?
So look, to their credit, Walmart responding quickly, that's awesome.
They stuck to safety, lawfulness.
And they made it clear that the ad was in thers, that's smart.
But this is also the kind of moment that exposes just how fragile the boundary can be between
personal action and perceived corporate stance, especially with legacy families and iconic
brands.
So I think for everyone else, the lesson isn't just be ready to issue a statement.
You've got to have clarity ahead of time.
It's not just on what you'll say, but also on what you're responsible for because in a moment
like this, silence delay or inconsistency can look like an endorsement, even if it's not
just a messaging problem.
That's a governance problem.
Yeah, we should point out that I think this was really the operative part of the Walmart
statement, which was the advertisement from Christie Walton is in no way connected to or endorsed
by Walmart.
I think that's what drew them out.
And then they added the we condemn violence, including when it's directed toward law enforcement
and the damaging of property as a company with associates and customers in the Los Angeles
region.
We remain focused on their safety and that of impacted communities.
The thing there is, I agree they were smart to clarify and include some comment on the
region.
Christy Walton forced their hand and I think they said the right things, but they also
managed to say as little as possible, which I think was probably the objective.
And on that score, I'm sure they felt it was a success because the statement, I don't think
went any further than the New York Post.
But I think one of the things that comes, like I said at the very beginning, was like, this
is not our lane.
There's been a shift, I think, from five, six, seven, ten years ago in how you make these
calculations.
Because right now it feels like the bar is very, very high.
Like you have got, this has got to be happening like in my backyard or in my, at my company
for me to make any comment on it at all.
Otherwise, I said before, it's like, this is not my lane.
Although, Home Depot, it literally happened in their parking lot and I just don't believe
they've made any comment they referred all the comments to ICE.
So we've seen this dynamic over the past six months and we keep asking ourselves what is
going to be the breaking point for corporate leaders to speak out.
This does not appear to be it, but the popular opinions are shifting.
The latest polling data that we have just this week, one out of Quinnipiac, one from the
AP, Quinnipiac's found Trump's approval rating is below 40%.
AP's about the same job approval.
He's underwater 21 points overall, 39/60 in the AP poll.
And I mentioned earlier on individual issues, immigration, I think there's been an area
where he has consistently enjoyed the most support, although he's underwater even on that
issue on immigration.
The AP he's underwater by seven points and Quinnipiac, he's a negative -11 on his handling.
And that, that Quinnipiac poll was taken over the weekend as the LA crisis was evolving.
So if people have their finger in the wind saying, well, I don't want to be saying something
that is going to get me crosswise with a large swath of my customers or in my
community, the immigration issue, there appears to be some significant softening there.
Listen, I'm not saying that companies should be making these decisions according to polls,
but I do think that it's an important signal for companies to understand that where immigration
was an issue that maybe they didn't want to go near because it was enjoying a lot of
popular support, we are seeing those numbers change.
And that's significant and it's because of, I think, the actions that Trump has been taking.
Yeah.
You know, the thing is, you know, business leaders step up now just because the polling
is shifted, I think it undermines entire message, you know, it just calculated as if they
were waiting for a crack in the armor instead of acting on principle.
That's just not moral clarity.
That's just market timing.
So right now, corporate communication should be pushing back on that instinct hard, right?
Because once you speak, you're setting a standard and it looks like, you know, you only found
your voice once it was politically safer to do so.
You've already lost credibility with people who needed to hear from you earlier, you know,
employees, communities or, you know, values, driven investors.
But I think that's where discipline matters.
You know, you don't speak because the number is deep, you know, you're speaking because
your internal posture is already settled because you know, you've already done the work
to know what you stand for and who you owe coherence to, what your silence would signal if you
let it stretch on to long.
You know, that's not PR.
That's just good governance.
And I think it's what separates reaction from leadership.
Yeah.
And in my opinion, everybody's late right now and everybody is signaling something with their
silence, whether it's acceptable to their audiences, they're going to know better than
we are.
But I do think there are ways for companies to show up better right now.
Because, you know, they're always claiming to serve communities, not just shareholders,
well, Los Angeles is a community.
And right now it's in trouble.
And I think this is a time for them to show up.
One of the things that really strikes me is that the stand up between California and
the feds is really an information disinformation war.
And one really important service that companies can provide is the reality.
Check the eyes on the ground.
You know, Trump is on his social media and getting back up from, from Fox and others.
LA is some kind of war zone.
It's not.
And, you know, if it were, you'd like to think the companies would be taking steps to protect
their employees.
But why should we wait for that?
I think millions of people are going to work in LA every day.
It's business as usual for the vast majority of people and of companies.
Somebody, like, please speak up about this.
It's really just telling the truth.
It's not a political act.
And what worries me is that companies who are silent are creating the space for more
disinformation.
Yeah.
So you have operations in LA, you have employees in LA, suppliers, partners, whatever.
This whole, it's not my lane argument gets very thin.
And people outside of LA are getting sharply contrasting, contradictory stories about what's
really happening.
And there are ways to do this without putting your thumb in the eye of the administration.
It doesn't have to be a statement against anybody.
It can be in support of your people and I would argue of in support of good business conditions.
Now is the moment to talk about those principles, those values.
Yeah.
You know, I'd say this, you know, if you have operations in LA, now certainly the time to
show up.
You have clarity and not adding to the noise.
But, you know, if you don't, this is still the moment to get ready for when it does reach
the communities that you serve because it is expanding.
You know, not every company needs to be issuing a statement about LA, but they do need to
be asking what happens when it's Atlanta, what happens when it's Phoenix or some suburb
where we quietly rely on our fulfillment and our, our labor.
You know, so I think the most important thing that leaders can do right now is stop treating
this like it's a one city event and start scenario testing.
You know, what they'll say, who they'll say to, what principles are guiding their posture
when it's their backyard.
You know, you don't wait for the chaos to reach a doorstep to decide where you stand, you
decide now and then you act when it's your lane, not before, not after.
And I think that's how you protect people and credibility at the same time.
Yeah.
And again, I would argue that it really does depend on how you look at it, but I think there's
a really strong argument for a lot of these companies who are not saying anything that it
is their lane.
Yeah.
I've got to believe that the business community still holds some sway.
And even in this polarized era, there's still a role for businesses, for corporate leaders
and their voices.
I think that they can and should be among the most trusted figures in public life.
And they can speak with moral clarity and it can cut through the noise.
We've seen that in previous episodes like the summer of 2020 after George Floyd was
murdered in the wake of Trump's travel ban eight years ago.
And yes, everybody has learned lessons from that and probably the number one lesson is don't
go overboard.
But there's a big difference between that and again, being invisible.
The caution is a strategy disappearing is a choice.
I think it's the wrong choice where companies could be in there helping to better inform
people and helping shape the narrative that, you know, again, for stability in our cities
is important for business.
That should be squarely in your lane.
Yeah.
Well, look, we can't have a podcast without having a good acronym.
So I'm going to come back to a couple that we've had.
All right.
So we have several things that are going on.
When it's a question, OK, is this crisis, is this chaos?
Surprisingly, people are asking that.
It's like trying to decide what's the right frame for responding, right?
And the reality is Los Angeles is now a crisis, right?
But there's a couple that we can take up.
One is that over the past few weeks, we've been talking about alignment signaling.
I don't think this is a moment where alignment signaling is at stake, but the framework that
we have for working through alignment signaling still applies.
And just to be just to remind people, alignment signaling is a principle where you can sort
of speak out against something, but you can also signal your alignment.
You can also say, well, we agree with the principles.
We agree with what you're trying to get done, we just may not agree with how you're trying
to do it.
But I think what you're--
Yeah, especially how do you move forward with both sides is the point, right?
In this current environment, companies have to be concerned with speaking out against
Trump and still maintaining access.
If they want to speak out here on the issue of immigration, the question is, how can we
do it in a way?
And I think the ways can be the alignment is not so much with Trump, but the alignment
with what Trump says that he stands for, which is our country, right?
So if we're appealing to-- that means appealing to the nation's values and the principles of
our country tied to democracy, for example.
But yeah, OK, so there's a couple.
One is the access model.
It's an acronym for how we think about speaking truth to power and how we think about calibration.
So one is, I'll just work through the access model and then we'll talk a little bit more
about community to give caution, which is when we started at the beginning.
So access stands for acknowledging the environment, which is that this is really not a great situation
for us to be in either as a country or this as an immigration issue.
Second, the seas calibrate your public proximity.
You got to contain your message risk.
E is to engage through policy, not personality.
And then the DSS, you got a signal stakeholder awareness and you got a scenario test, the
blowback, right?
So you have to be able to anticipate what's going to happen.
So it's not about alignment as a legion.
It's about calibrating your presence, protecting your message integrity and knowing which audience
is need what kind of clarity for you.
So that's the first one of the access model.
Yeah, and I think that the key point for me in there is policy, not personality.
We've seen some public figures go to almost comical lengths to make statements about what
Trump is doing and just not mentioning his name.
They're like John Roberts, the Chief Justice, made a pretty significant statement.
It was a couple of months ago by now.
It's all a blur.
But Trump was asked about it and he said, well, he didn't mention me by name.
It almost like gives Trump an out.
He's not blaming me.
And to me, that punctuated this idea of policy, not personality.
We can say that things are not going well or they're not being executed the way they
should be.
You can not pull personality into it.
That may be a more advantageous approach.
I think one of the things that is complicating this right now is that you said earlier that
every word is a trigger.
It's hard because everything, everything, as we've seen in multiple issues over the past
many months, everything gets politicized.
This is a situation that is hyper politicized because you have the democratic leaders of
Los Angeles and the state of California opposing Trump.
I think originally on principle and then I think being a little opportunistic in New
Soms case, taking some shots at Trump.
But I think that that's the sticky part is that if you are to oppose, if you were to get
out there and say, not everything in LA is terrible, that the right is going to immediately
say, oh, well, you're on Gavin Newsom's side.
I think that is the tightrope that companies probably have to walk.
That again gets into the challenge with alignment signaling is that you're trying to say something
that's still going to be true today, three weeks from now, six months from now.
We're going to have to work with this administration.
We may not agree with everything.
There are going to be times when we need to speak out like now on policies that we don't
agree with, but we have to find ways of not betraying our values or principles and living
up to the expectations that are stakeholders and even the public have for us.
All that is about the central idea, the challenge of alignment signaling and the idea of
the access framework is about keeping your eye on the ball.
The idea is speaking truth to power, speaking out, but still being able to stay in the room.
That's the idea of access behind the acronym.
What's the other is that right now that when companies are on the verge of speaking out,
and it raises a moment of how are we going to roll or blade through these landmines, if
you will.
I think that's where this idea of communicative caution comes into play.
It's a part of the work that we're doing on chaos management as opposed to crisis management.
So tied to this idea of chaos management is the steady model.
I think that's where it applies for companies now to preparing to speak out.
So steady stands for as strategic ambiguity, speaking out without overcommitting too soon.
T timing awareness, knowing when to speak, when to hold and when to shift, equilibrium,
you got to stay balanced, not reactive, not performative.
Assessment is about you have to be constantly paying attention on what's changing and who's
watching and where the risk is and yet maintaining the D discipline, sticking to message principles
even under stress.
And then the why of steady is yielding, adapting without losing your footing.
So this isn't about playing it safe.
It's about playing it smart, being present without being pinned down.
And that's how you protect your credibility.
You got to stay coherent across audiences and you still got to say something now that
is still going to hold true six months from now.
And I think that's where communicative caution matters.
Not to say less, but to say the right thing, the right way to the right people.
It's not silence.
It's just simply discipline under scrutiny.
Yeah.
And I would argue that it is being true to yourself in that statement.
And one of the things that we keep coming back to in this podcast is at least I keep hearing
myself say it is chart your own course.
I think to stay steady, you need to set a course to stay steady on.
And I think in to change the metaphors, I think you need to put a stake in the ground sometimes.
And I'll suggest a jumping off point here if there are any companies who are looking for
one.
And that is all going all the way back to January when the LA region was being devastated
by wildfires.
And I think companies then were falling all over themselves to show solidarity with Los Angeles.
They wanted people to know that they were part of the community because LA was hurting.
And LA is, you know, LA is hurting again.
I'll say up front.
Obviously.
But it's very different.
The proportions are way off.
This is an armed federal presence in LA unwelcome by the mayor and the governor.
But if you stood with LA in January, I think you should just really ask yourself if there's
an opportunity to stand with LA again because maybe that's the alignment that you're signaling.
That's the shared value that people have.
It's tough because I think especially in, you know, middle America or red states just find
it however you want.
There's not a lot of sympathy for Los Angeles.
Yeah.
But the truth is there's a lot of working people in Los Angeles.
We opened the program talking about the garment industry, which is a surprisingly large percentage
of the American apparel manufacturing industry.
So I think there's, there's a lot there for companies to align themselves with that should
be non-controversial even if the situation around them is become very politicized.
Let's just go to final thoughts here.
I think that this is, this is a test of principles and values, not politics.
I think that CEOs don't need to be commenting on law enforcement tactics.
They have a point of view.
They should have a point of view on constitutional rights and due process and transparency in government
and by transparency.
I mean, what I was saying earlier that, you know, that there's an opportunity here to give
a view, you know, a ground level view and share that with people and also not create space
for disinformation.
And for all those things, if there's no other reason that those are good for business and
that's, that's your lane.
Like you have a right to speak up and be an authority on that subject.
Yeah.
I'm a little cautious on the values right now unless you're thinking about democratic values
in the values of our country.
Small "d," Democrat values.
Yeah, that's it.
Small "d," democratic values, that's right.
Yeah, thank you.
That's a very good point, right?
Wait, I'm not leaning blue on that statement.
I'm actually thinking about the, the country as a whole, right?
You know, but, you know, the, the real point that I want to, I guess if I were to put my thumb
down on the scale, it's going to be on, on principles.
You know, principles of due process, local governance, constitutional rights.
These are definitely good for business.
And right now it's what the country needs.
But not brand positioning, not CSR talking points, just basic commitments to things that make
democratic society work.
And again, yes, little "d" here. This isn't what about what makes a company
unique.
It's about what we all stand on and what we owe each other as citizens, as, as employers and
institutions in public life.
And that's not a political act to me.
That's a civic one.
Well put.
And that's our show for this week.
We want to thank Shawn P Neal and the team at AdvoCast for producing our podcast with support
from the people forward network.
If you have comments or suggestions for the show, we'd love to hear from you.
Hit us up on LinkedIn or try our email address podcast@ocrnetwork.com.
Communication breakdown is a production of the observatory on corporate reputation.
I'm Steve Dowling.
And I'm Greg Carroll.
Thanks for listening.
We'll be back next week.
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