It’s Always Been Red Companies and Blue Companies

It’s refreshing when it’s transparent.

On October 22, 2020, millions of people got a long email from Expensify CEO David Barrett with the subject line, “Protect democracy, vote for Biden.”

The message begins with some bold statements:

I know you don’t want to hear this from me. And I guarantee I don’t want to say it. But we are facing an unprecedented attack on the foundations of democracy itself. If you are a US citizen, anything less than a vote for Biden is a vote against democracy.

That’s right, I’m saying a vote for Trump, a vote for a third-party candidate, or simply not voting at all — they’re all the same, and they all mean:

“I care more about my favorite issue than democracy. I believe Trump winning is more important than democracy. I am comfortable standing aside and allowing democracy to be methodically dismantled, in plain sight.”

and then poses and answers nine anticipated objections, including, “But you’re a company, shouldn’t you remain neutral?” His answer:

Expensify depends on a functioning society and economy; not many expense reports get filed during a civil war. As CEO of this business, it’s my job to plot a course through any storm — and all evidence suggests that another 4 (or as Trump has hinted — 8, or more?) years of Trump leadership will damage our democracy to such an extent, I’m obligated on behalf of shareholders to take any action I can to avoid it. I am confident our democracy (and Expensify) can survive a Biden presidency. I can’t say the same about Trump. It’s truly as simple as that.

https://twitter.com/rklau/status/1319397164821348357?s=20

Reaction was mixed. Expensify employees were inundated with abuse from people and bots, Barrett was hailed as a brave hero and derided as a stupid ideologue.

Beyond the hot takes on Twitter and in the business press, I don’t know what the impact of that email was. How many people who got it changed their vote? How many voted who weren’t going to otherwise? Was the email effective advocacy, brand building, communications, culture building, or something elese? (My best guess is that it wasn’t effective in terms of changing votes, based on many elections worth of research has shown is necessary to make someone a voter or to persuade them to change how they vote.)

Still, this kind of corporate leadership and political engagement will and should happen more often. Here’s why.

Everything Is Politics

Sorry, Austen Allred. You already live in that world. https://twitter.com/Austen/status/1319664786154479616

Among 2020’s many lessons, one is crystal clear: everything is politics. The lines between politics and business — tech business in particular— has always been porous and blurry, but now that blurring is more out in the open.

Before you get sad or outraged or worried about the dawning age of “red companies” and “blue companies,” do a quick news search on “corporate profits” as it was covered a decade ago. Or look up “corporate tax rate” news from, say, 15 years ago. We’ve long lived in a world of red companies and blue companies, it’s just starting to be more in the open.

If you’ve got some extra time and interest, read Kochland for a richly detailed and well-reported case study of a conglomerate of “red companies” and their mostly invisible but meticulously planned and extremely powerful political role over the last three-plus decades. It’s vital context.

If you’ve got less time, peruse this Harvard Business Review case study (framed as a story about crisis communications) on Harvest Foods’ more recent dustup around a PAC contribution. The story makes the most sense when you read it as an exploration of how a company’s communications, branding, culture, and more is messier when they avoid tackling the inherent politics of their actions directly and transparently. Harvest Foods branded as a blue company, gave money like a red company, and had to manage the fallout of the discrepancy.

Everything is politics. Always has been. And likely always will be. Proclaiming you’ll only engage on a very narrowly defined set of issues is itself political. Only giving non-political money is political. Giving very differently than the preponderance of your staff gives is political. It’s not possible to not be political. Politics is how our context is structured, the rules (formal and informal) we do business by, and the ultimate in unvaoidable branding.

More Transparency is Better

Since everything is politics, CEOs and companies engage in politics and activism all the time, all around us. Much of the time it's indirect — policies around paid family and sick leave, for example, are politics but aren’t usually categorized as such— but it’s also often quite direct.

We shouldn’t have to become research experts to figure out what our dollars and attention are de facto endorsing. When a CEO, like Mr. Barrett, goes public and direct with not just his political opinion we are better equipped to make better aligned choices.

I wasn’t an Expensify customer on October 22, but I am making that switch now. Not only do I agree with Mr. Barrett on the threat Trump and Trumpism represent for America, I think the way he engaged his company in the process of that email demonstrates political consistency. I feel confident that my drop in the bucket into Expensify’s profitability (and Mr. Barrett’s bank account) won't be countrary to my values (which are synonymous with my politics.)

I have been a Coinbase customer for years, but hopefully not for much longer. Brian Armstrong, CEO of Coinbase, published an explainer of why Coinbase doesn’t engage in “broader social issues” or “political causes” that are unrelated to Coinbase’s core mission of “creating an open financial system for the world.” The explainer demonstrates a jaw droppingly immature conception of politics, as if a mission as broad as “an open financial system for the world” could help but touch literally every “broader social issue,” from systemic racism (who gets to participate in financial systems and how?) to citizenship and immigration (having a country is a requirement for being banked almost everywhere in the world) and well beyond.

Armstrong’s ultimately very silly protestations that Coinbase won’t be political are so inherently political that they’ve caused me to look more deeply at all the other ways Armstrong and Coinbase are de facto political. And woah there’s a lot to find there. Including sketchiness with the IRS and, it turns out, pretty widespread disaffection among Coinbase employees, a bunch of whom took Armstrong up on his offer to go ahead and leave if they didn’t agree with his no-to-politics political announcement. I’m grateful to Armstrong for being transparent about how out of step he and his company are with my values. When I confirm which of the several Coinbase alternatives are better aligned, I’ll be making the switch.

Soylent co-founder, former CEO, and very recently former chairman Rob Rhinehart penned an eye-opening and deeply political screed starting with a pronouncement about how much he hates politics, followed by several thousand words indicating how uninformed about politics he is and endorsing Kanye West for Presdient. Silicon Valley leader Rhinehart claims that Nancy Pelosi is the only politician he’d ever heard of, didn’t vote in 2016 (and presumably doesn’t know that elections happen at times other than November every four years), claims that he refuses to talk with anyone who’s interested in politics, had this to say about now President-elect Biden (evidently Rhinehart wasn’t aware Biden was Obama’s VP):

Who is this man? I had never heard of him until very recently. Nobody I know has ever met him. According to his Wikipedia page he is a senator from Delaware, which I only know as the state where corporations like to file lawsuits. It looks like he has done pretty much nothing his whole life except be in politics. It also appears that he has been trying to run for president for a very long time.

Rhinehart’s company sells soy-based meal replacement drinks (regulated by the FDA) and includes, among other things, a stance on sustainability (“Researchers have shown that one way to reduce the impact of global warming is to restrict the consumption of animal products. We are committed to being a plant-based company that does not compromise sustainability in our effort to provide accessible, appealing, and affordable nutrition to all.”) and a #SoylentForGood program that includes verbiage about food insecurity.

Soylent is branded as a blue company, depends on many deeply politically-connected issues to operate (does anyone really want to argue that agriculture isn’t political?), and, evidently, was co-founded by and continues to benefit someone who wears his lack of curiosity and deep lack of understanding about how his world works as a badge of honor.

I was always unlikely to be a Soylent customer (I’m old enough to remember that it’s people), but beyond that it’s useful to understand how the company is rooted to understand what exactly they’re trying to do in the world. And to dig into the other ways Rhinehart’s politics bleed out into his surroundings. Once he’s transparent about his (electoral) politics, a whole lot else comes into focus.

Since everything is politics, corporate and CEO transparency around their own politics is useful.

Politics is the Ultimate Diversity, Equity, & Inclusion / Corporate Social Responsibility

Among the many companies that came out with a Black Lives Matter statement, investment, or set of promises in the wake of the protests this summer, how many also had something to say about the campaign that was raging around them? How many talked about changing systems, without engaging the way our systems are built, maintained, and changed?

To meaningfully engage on diversity, equity, and inclusion, how can a company not have something meaningful to say on the people and processes that are responsible for things like massively disproportionate economic and health impacts of the COVID crisis, of massive reductions in Pell grants and student loan forgiveness programs?

How can companies’ and leaders’ pronouncements on gender equity be believed if they don’t address the system that pays so little attention to the care and education of children (still nearly universally the responsibility of women) that has forced massive numbers of women to leave the workforce this year? Yes, that’s a challenge for individual companies, but it’s fundamentally a societal challenge — a political challenge.

The same lines can be drawn to connect nearly every DEI or corporate social responsibility endeavor — to leave out politics, or more precisely to stay quiet on politics, is to limit impact to an extreme degree. To make a meaningful contribution to a systemic challenge — climate, food insecurity, equity, social services, policing, infrastructure, and on and on and on — companies and CEOs have to engage the systems.

That politics is the primary way that happens shouldn’t be a revelation. I’m skeptical that it is. Most of these same companies belong to chambers of commerce or other business groups that educate and lobby on “business issues,” and nearly universally engage in politics to win on those issues. If it’s obvious that you can’t win on business taxes without working in politics, it should be equally obvious that you can’t win on, say, a diverse workforce without working in politics.

Everything is politics. That’s not new to 2020 and it’s not going away 2021.

I think and hope we’re going to see more people in positions of power like David Barrett shining more light on that reality and imbuing it with more transparency.

I do a range of strategy, communications, policy, and politics things at 42Comms.com. I send out an email newsletter on politics and the intersection of money and technology every couple of weeks (Sign up on 42comms.com). I tweet more than is good for my mental health @sbeinla. And I publish a recommended reading list sort of monthly.

I write a free newsletter on strategy, politics, communications, and the big ideas driving our world. Sign up at https://shaynabe.substack.com/

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