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Welcome back to Communication Breakdown, a weekly podcast from the Observatory on Corporate

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Reputation.

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Thanks for joining us.

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I'm Steve Dowling in Silicon Valley.

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And I'm Craig Carroll in New York City.

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Each week, Steve and I take a look at strategies companies are using to shape headlines and

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sometimes save their skins.

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It's a post-game show for PR Pros.

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This week, Target's post-pivot purgatory, trying to diffuse tension on multiple fronts in

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the wake of its turnabout on diversity.

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It's been 14 weeks since the red and white retailer changed its stripes on some key social

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issues, days after Trump's inauguration and right on the eve of Black History Month.

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Not the first Fortune 500 company to pull a U-turn on diversity, but Target had built a strong

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reputation for supporting social justice.

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And for that reason, activists and former allies have painted a different kind of bullseye

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on the company.

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But Target's stores fell for 11 straight weeks, especially among Black and Hispanic

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shoppers.

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And third party data shows that the Big Box rival Costco has increased over the same period.

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In mid-April, Target CEO Brian Cornell met with prominent civil rights leaders from the Black

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community, including the Reverend Al Sharpton and the Reverend Dr. Jamal Bryant, who has

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been leading a boycott against the retailer.

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Then the Minnesota Star Tribune revealed that Target had given a million dollars to Trump's

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inaugural committee the first time they'd ever made such a donation.

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This week, Cornell sent a memo to his 400,000 employees acknowledging that recent silence

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from Target's management team has created uncertainty among the ranks.

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But reassuring workers, quote, "We are still the target you know and believe in," end quote.

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Steve, you've talked before about what happened to an company that lets the story happen

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to them instead of telling it themselves.

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And that's kind of what this employee letter feels like.

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It's trying to reset the tone.

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But the messaging's fuzzy and it makes Target sound more like a passenger than a pilot.

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So I'm curious how you see it.

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Is this the first step that opens the door to something stronger or does it reinforce the

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sense that they're not quite in control of the narrative yet?

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Well, I think it could be both.

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I mean, the letter to employees is a good first step.

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Right, the language did come in for some criticism.

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Folks called it jumbled, unfocused.

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One consultant said the tone implies that things are happening around and two target that

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are out of its control.

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So I think you're right on that point.

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Cornell and his leadership team, they write, this is the quote, "The world around us is

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noisier and more complicated, but that doesn't change who we are."

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There's a lot of that in the letter.

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They also cover a number of pluses about the company.

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They talk about the quality of their products and experiences.

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They really are trying to wrap their arms around their employee base and give them a big

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warm hug.

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The problem, I think, is that right now this all just feels reactive.

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They're acknowledging, but they're not taking responsibility for the situation they're

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in.

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They're right to own the silence, I think.

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It's a good first step.

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When they say they're going to make up for it, the question is what they do next.

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To me, the main challenge here is that people who are following this, especially the employees,

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have heard two different messages in the past six months.

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In January, Target said they were changing their diversity programs in part because of the

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changing external environment, those are their words.

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This week, employees are now told, "We're still the target you know and believe in, but

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which is it and how do you reconcile those two different messages?"

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That letter was classic, "Acknowledge the environment language," which is the first move in our framework

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on alignment signaling of the access framework.

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That's a strategy companies are using to navigate highly politicized environments, especially

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in a Trump without becoming political mouthpieces.

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Target admitted things were messy, but they didn't really say what they're doing about it,

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and that's why the letter, to me, came off a little passive, like they were cutting the

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weather instead of piloting the plane.

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Yeah, I'll use another metaphor.

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I think they have painted themselves into a corner.

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If we think about how they ended up in this position, we've talked in the past about some

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of the trade-offs that companies are making to keep a seat at the table with the Trump administration.

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We've talked in an earlier episode about how one of the reasons we suspect that Target

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is doing this is to, as we said, stay at the table with Trump or at least stay out of

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the MAGA cross-airs, both at the federal and the state levels.

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We mentioned Cornell and Met with Reverend Dahl.

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That was a Thursday in New York last month.

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The next Monday, he's in the Oval Office with the CEOs of Wal-Mart and Home Depot.

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Warning Trump about the damage that the tariff policies will do.

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I think that meeting was pretty effective for a time because Trump came out and softened

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some of his rhetoric right after that.

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That was when he said the China tariffs would come down substantially from 145.

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If we boil it down, and this is admittedly a pretty crass calculation, I don't think it's

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far off though, do you want to fight El-Sharpton or do you want to fight Donald Trump?

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That's where Target finds itself.

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I think they've chosen to endure the criticism from Sharpton and the Reverend Bryant rather

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than risk being dismissed by the White House as woke.

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Sharpton at least is engaging with them, even though his tone is critical understandably.

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Sharpton has not formally called for a boycott or joined the calls for a boycott.

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He comes to the table.

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He's met with them.

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I'm guessing they would not expect the same kind of dialogue from Trump if the right wing

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smells blood.

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They figured there would be no recovery.

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I don't think they're the only company making that kind of calculation.

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This is just a target has this legacy of steadfast support for diversity and social justice,

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which made that shift so much more pronounced and drew the critics out of the woodwork so

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vocally.

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Right.

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Look, this is not an AC position of being a target's team, especially in corporate communications

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is doing everything they can to hold a very complex situation together.

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Meeting with Reverend Sharpton one day in the Trump camp the next day, it's not contradiction,

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it's navigation.

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I would say they're trying to stay balanced in an environment that is tilting in all directions.

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We've talked about in another podcast episodes.

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This is where the access framework comes in.

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It's about staying close to power without losing your identity.

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I think that's what targets trying to do.

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They're trying to stay in the policy conversation, avoid the culture or cross hairs and still

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honor the values that the brand built.

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But where they still got work to do is connecting words with action.

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When you say, "We're still the target you know, people are going to be looking for proof."

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Right now that proof might not be so obvious.

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The letter was a tone reset.

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It hits the first part of the access model, which is to acknowledge the environment.

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But it didn't really offer a way that we could say is a credible signal, something tangible

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to close the gap between message and behavior.

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A gap between what they said in January and what they're saying now.

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Look, it can look like hypocrisy, but I'm going to say that there's another way that we

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could look at it in the CSR world, at least in the academic world of CSR.

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It's called aspirational talk.

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This is an idea developed by some of my colleagues at Copenhagen Business School.

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It's the idea that talk comes before action, not after.

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It's not about pretending you've arrived.

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It's about publicly naming the future that you're trying to live into.

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I don't know.

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It reminds me of something my ministry used to say when I was a little kid from the pulpit.

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It'd say, "Hip regret is someone who has no intention of becoming who they say they are."

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For me, that's sort of a line here.

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That's the test.

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If the intent is real, even if the execution is messy, that's not hypocrisy.

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To some degree, it's leadership and motion.

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But if there's no follow-through, that's certainly where trust is going to work.

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The thing for me is that an aspirational talk, and I wouldn't call them hypocrites, but I'm

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sure some people are doing that.

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The thing is that target didn't just make aspirational talk.

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They took action.

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They weren't just talking about the future.

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They started to build that future with the programs that they had put in place.

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They were really bringing people along and gaining a lot of respect.

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They were setting expectations that they were going to continue in that direction, and

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they ended it abruptly.

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And honestly, without a very satisfactory answer or explanation.

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I think that this is the problem that they find themselves dealing with.

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Cornell really just seems to be trying to keep all the plates spinning.

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And that's, I think, what has led to this uncertainty that he talks about in his letter.

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The problem is they haven't cleared anything up.

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Like you said, they mentioned we're still the target you know and believe in.

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They mentioned inclusivity in that letter, but there's no change in policy.

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And so again, like how do you reconcile the words with the actions?

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I don't know.

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Companies don't always have the luxury of clarity.

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You know, they have to signal enough alignment to stay in the room without becoming partisan.

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So Cornell showing up at a White House, that was policy.

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It wasn't personality.

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You know, that's engaging via policy, not endorsement.

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But if you don't connect it to a clear internal narrative, it will certainly read like contradiction.

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I think that's the challenge that targets facing right now.

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I don't think they're being disingenuous.

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I think that they're trying to lead through this symbolic environment where even showing

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up can be misread.

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You know, they haven't finished the thought yet.

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And until they do, they'll just stay in this gray zone where good intentions don't quite

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translate and trust stays a little bit wobbly.

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Yeah, but again, they didn't just signal alignment.

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I think if they had done signal alignment signaling in January, if they had just sort of said,

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well, we believe in the objectives here, but we're taking a different path to it or we

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don't believe it.

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They didn't do that.

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They didn't go all in, but they took some pretty significant steps and they were very

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significant for target because of their previous track record.

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So I think this is what I mean when I say they're trying to keep all the plates spinning.

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On the one side, you've got a management team that is trying to stay engaged on tariff policy

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and that's a critical risk for their business to put it mildly.

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I think they figure we suspect that to do that, they've made these sacrifices on the

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values front.

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And that stirred up a whole other problem internally.

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And with a, I think, pretty important customer segment and they're having trouble explaining

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that.

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So that's why it really feels to me like they're trying to keep all these plates spinning.

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But let's take the employee outreach for now and then we can move on to the policy engagement.

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When I read this letter, I thought to myself, in situations like this, sometimes the calculation

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is that we'll let people get it off their chests.

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Let's an air out of the balloon and maybe that will solve it.

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People want to be heard.

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The longer they go, though, without some kind of action solution, I think they're increasing

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the risk to their reputation internally and also externally.

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People criticize the Cornell letter as a mission mash.

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And I think that probably reflects this messaging crisis that they're in.

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They've got to make some decisions and commit.

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So if I were in target shoes, they've bought themselves some time by promising more communication.

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That's good.

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I would say first, it's got to be two-way communication.

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And maybe that's what they mean.

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But I would use some of this time to listen, let people really know you're listening and figure

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out what you need to do to write the ship.

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And I do believe that's going to have to include some sort of course correction.

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They can't just spend the summer telling people the stores are great.

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The world is noisy and nothing has changed that.

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That's going to fall flat.

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I agree with all that.

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And to me, this is where alignment signaling has to evolve in alignment clarity.

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It's not just enough to promise more communication.

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You've got to reconcile the messages because, you know, what the employees heard in January

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was we're scaling back because the environment changed and now they're hearing nothing's changed

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for the same target and those who just can't coexist without explanation.

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This is exactly where the access model calls for what would label a credible signal.

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It doesn't mean doing everything that could exaske.

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It means choosing one or two meaningful course corrections that show that your values are

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still driving the ship and not just the political winds.

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And I'm with you, I think, did buy a little time.

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You know, like you said, if that time is just spent celebrating stores and brushing off

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the noise, they're going to risk winding the trust gap, especially inside.

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So the summer really shouldn't be about smoothing things over.

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I think it should be about rebuilding coherence.

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Even if a partial pivot could do a lot of work if it feels real.

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If we gain this out for target, I think there are a few options in front of them.

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And again, we're dealing with this challenge of matching your internal and your external messaging

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because I think that may be where they're running into trouble there.

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They've messaged externally that they've made these changes because of shifting externalities.

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They're telling people internally that nothing has changed.

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So how could they approach a solution here?

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The first one is to sort of stay the course, keep the plates spinning.

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That's not working.

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It boils down to just trust us, but I wonder if the calculation somewhere is that they can

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kick the can with the employees until the tariff situation resolves itself.

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And then maybe they start to make things up with the employees.

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That feels like a real high-wire act to me.

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I would not want to advise that.

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I think the second option is to find some kind of common ground.

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You've talked about alignment signaling.

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It could be tough, but it could be out there.

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Next week we talked about Ford and Amazon messaging to show they share goals with the White House,

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even if they have concerns about how to get there or they may even disagree on certain

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policies.

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Target has 400,000 employees in all 50 states, I think.

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They're one of the largest employers in the country.

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They're a jobs engine.

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It's one of the messages in Cornell's letter.

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They could be testing that one.

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Maybe that's where they start.

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I think on economics, there's commonality.

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And that's where they should probably be focusing their message just like Ford did last week.

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Ford declared itself the most American company, the most American carmaker could target

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be the most American retailer.

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I think by some of the same sort of metrics, they could take a run at that.

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The key question is can you align with the White House goals without sacrificing your values?

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On diversity, I don't think you can.

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I think they tried that and they overswung.

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But maybe there's a way for them to do, as you say, alignments signaling on economics that

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keeps them in the conversation with the White House.

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The third option, I think is mostly focused on employees and the customers who are upset

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is they can say, we screwed up.

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We made some changes, believing it was right for our business, but we've heard you and

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we realize we went too far.

256
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It's out of step with our values.

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Right now they talk about their values, but they've changed the policies that grew out of those

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values and the sounds of it, they're losing confidence or support among employees.

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So I think they are going to end up changing course at some point and they can really put

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some effort into how they present it.

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But you don't have to meet every demand.

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I think of them right now by the critics, but I think they've got to have to find a way

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to walk back some of those January decisions in a way that's thoughtful and defensible.

264
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Yeah.

265
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I think I have a little different point of view on them.

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I'm going to frame it a little bit differently, something that I've shared with you called, it's

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a model I've been working on about prioritization.

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It called crucial to crux.

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It's sort of a way of thinking about how we prioritize and it's a way really cutting through

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the noise and focusing on what's the decision that's actually going to define the moment.

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And here's how I would break it down.

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I've got three options.

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I've laid out myself.

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The first option I see is to own the January decision, not spin plates, not wait it out,

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but say carefully, this was a business decision made in a specific environment and we stand

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by it.

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I think where you and I agree is that if they stop there without more clarity or explanation,

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it just lands like just trust us.

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And that's certainly not going to be enough.

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I mean, one of the things I liked about Stephen Covey's work was his expression, you know,

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you can't talk your way out of a problem you behaved your way into.

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And I think that's a little bit of how I see that here.

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The second option I'd see is what I'd call a narrative pivot.

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You said, find the message.

285
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I would say reframe the story, position target is a jobs engine, you know, a pillar of 2,000

286
00:17:33,800 --> 00:17:37,080
communities, one of the largest employers in the country.

287
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Try to avoid this chest beating of who's the most American.

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But I would say, you know, if they play this from a community angle, being one of the largest

289
00:17:45,040 --> 00:17:49,600
employers in the country, I think that's alignment signaling done right.

290
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Knowing shared goals with policymakers without crossing the line into partisanship.

291
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And it moves the conversation away from ideology and back to outcomes.

292
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And here's the thing, you don't need just a message.

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You need a narrative infrastructure, you know, a story that can absorb tension and still

294
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hold together because when the narrative collapses and even good decisions start to look

295
00:18:10,840 --> 00:18:14,440
like contradictions, that's when companies lose the room.

296
00:18:14,440 --> 00:18:18,360
So they have to think about this idea of infrastructure in their narrative.

297
00:18:18,360 --> 00:18:24,520
And the third option, I would say is not apologizing, but course correcting.

298
00:18:24,520 --> 00:18:26,800
And I think we're aligned here in this sense, right?

299
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I mean, it's got to be thoughtful, defensible, grounded, and principled, and not a transaction.

300
00:18:32,360 --> 00:18:37,440
But this is also where the opportunity lives, you know, if Target puts business performance

301
00:18:37,440 --> 00:18:41,920
and stakeholder needs front and center, not as a response to the noise, but as a first

302
00:18:41,920 --> 00:18:45,200
thing's first reset, they don't just patch the optics.

303
00:18:45,200 --> 00:18:47,200
They start rebuilding trust inside and out.

304
00:18:47,200 --> 00:18:51,080
So, so yeah, I mean, I think we both agree that, you know, something's going to have to shift,

305
00:18:51,080 --> 00:18:55,760
but my take is that whatever they change, it needs to be anchored in performance like a

306
00:18:55,760 --> 00:18:59,520
team on the field, not performance like a show in the stage.

307
00:18:59,520 --> 00:19:04,480
You know, this isn't about theater, it's about execution, trust, and delivering under pressure.

308
00:19:04,480 --> 00:19:08,880
You know, coming back to the Covey Quote, you know, you can't talk your way out of a problem

309
00:19:08,880 --> 00:19:13,600
you behaved your way into, you know, the companies that survive moments like this, they're

310
00:19:13,600 --> 00:19:18,080
the ones who remember that the purpose of the game is to stay in the game.

311
00:19:18,080 --> 00:19:23,280
And that means making smart, values align moves that keep you credible with employees, policymakers,

312
00:19:23,280 --> 00:19:24,280
and the public.

313
00:19:24,280 --> 00:19:25,960
Yeah, no, I agree.

314
00:19:25,960 --> 00:19:29,360
And I agree with you on owning the decision that's certainly an option.

315
00:19:29,360 --> 00:19:33,240
The thing for me is that they haven't done that so far.

316
00:19:33,240 --> 00:19:35,560
And they didn't do that in January.

317
00:19:35,560 --> 00:19:36,560
Yeah.

318
00:19:36,560 --> 00:19:42,480
They made some, I feel kind of hand-wavy sort of explanations about data and learnings,

319
00:19:42,480 --> 00:19:44,360
but they never really shared it.

320
00:19:44,360 --> 00:19:46,360
And so, you know, I'm still on the table.

321
00:19:46,360 --> 00:19:52,040
Yeah, we're not in their heads, but I've got to believe that if they had a really strong

322
00:19:52,040 --> 00:19:58,120
argument, business focus that they felt good about, then they wouldn't have pointed to

323
00:19:58,120 --> 00:20:03,280
this changing external environment was the words that they use.

324
00:20:03,280 --> 00:20:09,240
It reminded me of Mark Zuckerberg's Metacyeos comment that it feels like we're in a new era

325
00:20:09,240 --> 00:20:10,240
now.

326
00:20:10,240 --> 00:20:15,960
The thing is, we need to, this is an important data point that has come up, you know, just

327
00:20:15,960 --> 00:20:17,760
in the past few weeks.

328
00:20:17,760 --> 00:20:24,600
The data just doesn't back that up, doesn't back up what target set in January about a changing

329
00:20:24,600 --> 00:20:29,320
external environment, it doesn't back up what Zuckerberg said about a new era.

330
00:20:29,320 --> 00:20:32,080
If there was a pendulum, it has swung back.

331
00:20:32,080 --> 00:20:39,000
NBC News did a poll at the end of April nationwide, 61% of Americans disapprove of Trump's

332
00:20:39,000 --> 00:20:44,840
handling of diversity, equity and inclusion efforts, 29% of that's like almost two to one

333
00:20:44,840 --> 00:20:48,040
against Trump's position on DEI.

334
00:20:48,040 --> 00:20:54,280
So I think there is some room for target to say, maybe we misread the vibes.

335
00:20:54,280 --> 00:20:57,840
Maybe we overshot, maybe we went too far.

336
00:20:57,840 --> 00:21:00,240
What words they choose is up to them.

337
00:21:00,240 --> 00:21:02,320
It doesn't have to be an apology apology.

338
00:21:02,320 --> 00:21:07,160
I don't know, but I think an acknowledgement, just as they're acknowledging their silence

339
00:21:07,160 --> 00:21:11,120
now, I think is something that they can get comfortable with, but I don't think you have

340
00:21:11,120 --> 00:21:17,400
to look at it as a loss or something that you are going to suffer from with your employees

341
00:21:17,400 --> 00:21:21,000
or the communities who are very upset with you.

342
00:21:21,000 --> 00:21:26,480
It's really just about making things right and moving forward.

343
00:21:26,480 --> 00:21:31,200
And again, the really hard part in all of that is reconciling that with your relationship

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00:21:31,200 --> 00:21:32,680
with the White House.

345
00:21:32,680 --> 00:21:39,000
But at least in this moment now that we have some actual data, it was that there never really

346
00:21:39,000 --> 00:21:44,560
has been a strong swing against diversity.

347
00:21:44,560 --> 00:21:51,040
There is risk, certainly political risk because of the current environment.

348
00:21:51,040 --> 00:21:57,200
But for me, it comes back to you put policies in place years ago that were in keeping with

349
00:21:57,200 --> 00:22:01,880
your values, you set expectations with really key constituencies.

350
00:22:01,880 --> 00:22:05,040
And then you made a really sharp turn.

351
00:22:05,040 --> 00:22:10,840
And I think that course correcting is probably the right solution on this one.

352
00:22:10,840 --> 00:22:12,600
Yeah, I hear that.

353
00:22:12,600 --> 00:22:16,000
And you know, look, public opinion numbers, they're important.

354
00:22:16,000 --> 00:22:21,240
They tell us that the country broadly speaking isn't with Trump on DEI.

355
00:22:21,240 --> 00:22:22,720
And I'm just going to get it on the table.

356
00:22:22,720 --> 00:22:27,640
I'm not saying I believe this 100%, but it's part of the conversation.

357
00:22:27,640 --> 00:22:31,560
And that is that public opinion isn't the same as political power, right?

358
00:22:31,560 --> 00:22:37,160
The approval doesn't change tear policy, doesn't stop red state attorneys general from launching

359
00:22:37,160 --> 00:22:38,920
investigations.

360
00:22:38,920 --> 00:22:44,080
So when target sites are changing external environment, I don't think they're misreading

361
00:22:44,080 --> 00:22:45,080
sentiment.

362
00:22:45,080 --> 00:22:47,480
I think they were reading power.

363
00:22:47,480 --> 00:22:49,600
And that's the world of symbolic governance, right?

364
00:22:49,600 --> 00:22:54,320
You know, where it's not about who's popular, it's about who can make your life difficult.

365
00:22:54,320 --> 00:22:57,600
And I think that's what makes alignment signaling so tricky.

366
00:22:57,600 --> 00:23:01,920
You're signaling just enough proximity to stay out of the blast zone without abandoning

367
00:23:01,920 --> 00:23:04,040
the values that built your brand.

368
00:23:04,040 --> 00:23:05,840
It's not always about being on the right side of the pole.

369
00:23:05,840 --> 00:23:08,720
It's about staying in the game long enough to still have a strategy.

370
00:23:08,720 --> 00:23:09,720
Yeah.

371
00:23:09,720 --> 00:23:14,160
If they have a choice about who's going to make their life difficult, it can be Reverend

372
00:23:14,160 --> 00:23:16,800
L. Sharpton or it can be Trump and the White House.

373
00:23:16,800 --> 00:23:22,600
And they are making a calculation that it is at least for the moment easier to endure

374
00:23:22,600 --> 00:23:25,360
the difficulties that that Sharpton and others are bringing.

375
00:23:25,360 --> 00:23:26,360
Okay.

376
00:23:26,360 --> 00:23:27,600
Question for you.

377
00:23:27,600 --> 00:23:30,680
With numbers like this, you know, when do you break with Trump?

378
00:23:30,680 --> 00:23:32,760
There's a fair question.

379
00:23:32,760 --> 00:23:33,840
When do you break with Trump?

380
00:23:33,840 --> 00:23:39,160
I think if you're with Trump in a way that's hurting your reputation or hurting your business,

381
00:23:39,160 --> 00:23:43,680
if you're making compromises in ways that make you uncomfortable, that's a good time to

382
00:23:43,680 --> 00:23:46,680
start thinking about making a break.

383
00:23:46,680 --> 00:23:50,960
I think target should be able to change course here without picking a fight.

384
00:23:50,960 --> 00:23:55,480
They'll be rushing back into the arms of their employees and a significant segment of

385
00:23:55,480 --> 00:24:01,800
their customers who are just holding them to a standard that target set for themselves.

386
00:24:01,800 --> 00:24:07,200
Now, those folks just forgiven forget, no, target's going to have to work to rebuild trust.

387
00:24:07,200 --> 00:24:13,080
But the trust was there before and they know how target knows how to talk about these values

388
00:24:13,080 --> 00:24:14,360
of inclusion.

389
00:24:14,360 --> 00:24:19,160
And people believe them when they do, which is why these past few months have been so painful,

390
00:24:19,160 --> 00:24:22,640
it just like seemed like such an abrupt departure.

391
00:24:22,640 --> 00:24:27,480
So I think they can, they can still make adjustments if they feel they need to, especially if they're

392
00:24:27,480 --> 00:24:30,840
showing that they're being consistent with those values.

393
00:24:30,840 --> 00:24:36,560
But breaking with Trump, you know, it's probably not going to be target, but someone in the

394
00:24:36,560 --> 00:24:39,040
business community is going to have to do it.

395
00:24:39,040 --> 00:24:44,160
Take a principled stand and say, I'm sorry, but you've got this all wrong.

396
00:24:44,160 --> 00:24:49,440
And if it's done correctly with the right messaging at the right moment, I think that's

397
00:24:49,440 --> 00:24:52,400
going to look like leadership from the business community.

398
00:24:52,400 --> 00:24:59,280
So we said it before in a chaotic situation, clear and consistent voices can shape the debate.

399
00:24:59,280 --> 00:25:03,400
I think consistency is your go to shelter from the storm.

400
00:25:03,400 --> 00:25:08,640
As Trump's going to be all over the place, companies can chart their own path and I believe

401
00:25:08,640 --> 00:25:10,160
they can be leaders.

402
00:25:10,160 --> 00:25:15,080
And hopefully when somebody does step up, we'll see other companies follow suit.

403
00:25:15,080 --> 00:25:20,520
In the meantime, I think target can get its own housing order and still show their aligned

404
00:25:20,520 --> 00:25:24,000
enough with Trump so that he doesn't kick them to the curb.

405
00:25:24,000 --> 00:25:28,400
You know, we share the same goals for the economy and for job creation.

406
00:25:28,400 --> 00:25:31,560
But you need to listen to us on the tariff policy.

407
00:25:31,560 --> 00:25:36,280
And also, we're going to move back closer to our original position on diversity because

408
00:25:36,280 --> 00:25:39,760
it's good for our business and that's what people expect of us.

409
00:25:39,760 --> 00:25:40,760
Yeah.

410
00:25:40,760 --> 00:25:43,120
Look, I think this is where it really gets to the heart of it.

411
00:25:43,120 --> 00:25:46,720
You know, it's not about whether a company agrees or disagrees on policy.

412
00:25:46,720 --> 00:25:51,320
It's about knowing how to disagree without getting wrecked in the process.

413
00:25:51,320 --> 00:25:53,600
And that's where alignment signaling really comes in.

414
00:25:53,600 --> 00:25:59,440
It gives companies a way to say, look, we're here to talk policy, not pledge loyalty.

415
00:25:59,440 --> 00:26:04,600
And I think it's a strategic capability, especially in an environment like this one.

416
00:26:04,600 --> 00:26:10,160
I'd love for companies to stand up and say, nope, we respectfully disagree.

417
00:26:10,160 --> 00:26:12,720
But we have to be honest about the current environment.

418
00:26:12,720 --> 00:26:15,480
This is not a policy first system.

419
00:26:15,480 --> 00:26:17,080
It's a performance system.

420
00:26:17,080 --> 00:26:21,360
And in performance systems, you know, just not clapping loudly enough can get you labeled

421
00:26:21,360 --> 00:26:22,360
disloyal.

422
00:26:22,360 --> 00:26:25,880
So, but I'm, you know, I don't think companies are being timid here.

423
00:26:25,880 --> 00:26:29,000
I think it's that they're being tactical.

424
00:26:29,000 --> 00:26:32,280
The real question isn't when you break with the White House.

425
00:26:32,280 --> 00:26:36,800
I think it's how you do it in a way that protects your integrity and keeps you in the game

426
00:26:36,800 --> 00:26:38,200
long enough to still matter.

427
00:26:38,200 --> 00:26:39,200
Yeah.

428
00:26:39,200 --> 00:26:42,440
And I think we saw some of that in this letter from Cornell to employees where he

429
00:26:42,440 --> 00:26:47,040
talks about, you know, a target being a job creator and things like that.

430
00:26:47,040 --> 00:26:53,040
I think as I said earlier, I think there's something there in the alignment signaling category

431
00:26:53,040 --> 00:26:58,480
is just a matter of how they do that and how they manage their internal changes that

432
00:26:58,480 --> 00:27:00,080
I think they probably have to make.

433
00:27:00,080 --> 00:27:01,080
Yeah.

434
00:27:01,080 --> 00:27:02,080
All right.

435
00:27:02,080 --> 00:27:03,080
Final thoughts from the professor.

436
00:27:03,080 --> 00:27:04,680
So I have a couple.

437
00:27:04,680 --> 00:27:10,360
One is, I'm really struck by the question of what has to be true and what has to be true

438
00:27:10,360 --> 00:27:12,400
for a company to break with Trump.

439
00:27:12,400 --> 00:27:15,640
Cleanly, credibly, and without imploding in the process.

440
00:27:15,640 --> 00:27:20,680
That's one thing that I'm thinking about, not wishful thinking, not branding, just what conditions

441
00:27:20,680 --> 00:27:21,680
need to be in place.

442
00:27:21,680 --> 00:27:26,000
I'd say, okay, first of all, they need to be grounded in real principles, not just PR values.

443
00:27:26,000 --> 00:27:29,160
The lines already drawn and boundaries already set.

444
00:27:29,160 --> 00:27:34,000
Second, I think they need to have stakeholder alignment, especially internally, you know,

445
00:27:34,000 --> 00:27:38,720
the board, the leadership employee base need to be on the same page about what the company

446
00:27:38,720 --> 00:27:40,200
stands for.

447
00:27:40,200 --> 00:27:47,880
And third, they need to have the operational strength to absorb the blow financially, politically,

448
00:27:47,880 --> 00:27:49,360
reputationally.

449
00:27:49,360 --> 00:27:54,000
That's, you know, your balance sheet, political capital and brand trust.

450
00:27:54,000 --> 00:27:58,800
And I'd say finally, they need to have a narrative infrastructure already in place, one that

451
00:27:58,800 --> 00:28:04,800
doesn't rely on approval for whoever's in power and a story that's consistent, values

452
00:28:04,800 --> 00:28:05,800
driven and tested.

453
00:28:05,800 --> 00:28:10,000
And I think if those things are true, then you can make the break and not just survive

454
00:28:10,000 --> 00:28:13,160
it, but come out stronger, more trusted, more coherent.

455
00:28:13,160 --> 00:28:18,600
But I think the problem is, or the tension is, most companies aren't there yet.

456
00:28:18,600 --> 00:28:23,920
And I think that's where this idea of where we're talking about aspirational signaling earlier

457
00:28:23,920 --> 00:28:25,280
comes into play.

458
00:28:25,280 --> 00:28:30,520
We need to be able to think about evaluating aspirational signaling based on whether it opens

459
00:28:30,520 --> 00:28:35,840
the door to better behavior and not just to whether it matches today's reality.

460
00:28:35,840 --> 00:28:41,480
Because if we don't give leaders the space to articulate aspirations, even once that they

461
00:28:41,480 --> 00:28:45,800
haven't fully achieved yet, then we might actually be closing the door on the very changes

462
00:28:45,800 --> 00:28:47,600
that we're hoping that they make.

463
00:28:47,600 --> 00:28:48,920
Yeah, I agree with all of that.

464
00:28:48,920 --> 00:28:53,720
And I think that that is the lesson that's the cautionary tale from this episode with target

465
00:28:53,720 --> 00:28:55,800
and the changes that they made.

466
00:28:55,800 --> 00:29:00,200
I think they were just, the changes were just too dramatic compared to where target was.

467
00:29:00,200 --> 00:29:04,280
They may have gotten caught up in that, that vibe shift post election.

468
00:29:04,280 --> 00:29:05,280
But that's where they are.

469
00:29:05,280 --> 00:29:10,000
I think that coming at it, a little more measured in the beginning, as you suggest, would

470
00:29:10,000 --> 00:29:14,080
have been the better approach, making sure that everybody was on board with whatever

471
00:29:14,080 --> 00:29:15,680
they were going to do.

472
00:29:15,680 --> 00:29:19,000
And maybe those conversations would have made them moderate a little bit.

473
00:29:19,000 --> 00:29:23,440
But as to where they are, messaging alone, I think is not going to get them out of this.

474
00:29:23,440 --> 00:29:27,680
And if you want to be a values led company, you've got to have the operational follow-through.

475
00:29:27,680 --> 00:29:30,640
You've got to talk the talk and walk the walk.

476
00:29:30,640 --> 00:29:37,600
This isn't just a target story. It's a preview of how all companies are going to be tested

477
00:29:37,600 --> 00:29:42,640
in an environment where governance is increasingly symbolic, where the real pressure isn't just

478
00:29:42,640 --> 00:29:43,640
economic or regulatory.

479
00:29:43,640 --> 00:29:46,800
It's cultural, performative and political.

480
00:29:46,800 --> 00:29:50,080
And the companies that hold up won't be the ones with the best statements.

481
00:29:50,080 --> 00:29:53,120
They're going to be the ones who've done the internal work.

482
00:29:53,120 --> 00:29:54,480
Great point to end on, Craig.

483
00:29:54,480 --> 00:29:56,360
That's our show for this week.

484
00:29:56,360 --> 00:30:01,120
We want to thank Shawn P Neal and the team at AdvoCast, as well as the people forward network

485
00:30:01,120 --> 00:30:03,400
for making our podcast possible.

486
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If you have comments or suggestions for the podcast we'd love to hear from you, our email

487
00:30:07,520 --> 00:30:11,480
address is podcast@ocrnetwork.com.

488
00:30:11,480 --> 00:30:15,440
Communication Breakdown is a production of the Observatory on Corporate Reputation.

489
00:30:15,440 --> 00:30:16,440
I'm Steve Dowling.

490
00:30:16,440 --> 00:30:17,440
And I'm Craig Carroll.

491
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Thanks for listening.

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We'll be back next week.

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