Movements Teach a Lesson to Businesses
I have taught a class titled "Social movements and the competitive strategy of firms" for a couple of years. It central message can be summarized as follows: the power of social movements must not be underestimated by companies, either for the costs they can inflict if misunderstood or defied, or for the benefits they can bring.
As I was starting this year's course, the Barilla controversy exploded, bringing national and global attention to what is an exemplary case in point. On September 25, Guido Barilla, president of the Barilla Group, thus answered a radio interviewer who had asked if the company would consider airing TV commercials featuring gay families: "We won't do it [this type of commercial] because the concept of the traditional family remains one of the company's fundamental values. If gays like our communication, they will continue to eat our pasta, and if they don't like what we say, they'll stop eating it, and eat another brand of pasta."
The reaction of leaders, activists, and supporters of the gay movement was not slow in coming. In a few hours, a boycott campaign had been launched on Facebook and Twitter, soon reaching the United States, where the LGBT movement has scored repeated victories on the front of same-sex marriages and adoption rights, and where Barilla also has major business interests.
The backlash was so intense that on September 23, Barilla had to publish an official apology statement on its corporate web sites and Facebook pages in Italy and the US, followed by a video where Guido Barilla personally apologized for his statements. While Barilla was facing a PR nightmare, many of its competitors (including Bertolli, Buitoni, Misura, Garofalo, Ronzoni) were launching a whole array of messages and ads on social media signalling the opposite attitude: families of all genders were welcome, and they were showing themselves to be ready to intercept consumers boycotting and leaving the Barilla brand.
Months after the media maelstrom, after the company met with spokespersons of the gay movement, on the institutional page of the Barilla Group there is the announcement of the creation of a new Diversity & Inclusion Board, and a well-known gay activist is among its members. The Barilla case is a textbook case on the blunders that companies sometimes make and how the reactions of social movements, particularly on social media, can be as instantaneous as intense. Social movements are in fact based on the ability to mobilize and foster the participation of people effectively. Recent examples like Occupy Wall Street have shown the importance of tools like Twitter and Facebook to reach these objectives.
The Barilla case teaches a lesson to businesses, especially to Italian companies which had never been hit by a negative consumer reaction of this magnitude: a company's identity is an economic as well as a social concept. Companies are often called to take position in the social arena, and so they cannot afford to devote all their attention to the competitive environment, but must first analyze the social environment to understand how the latter might affect the former. Social movements are important actors in the social arena, and are ignored at the companies' peril. Movements can also create opportunities for companies, since, by connecting to the causes of certain movements, they can reap the potential of differentiation strategies and obtain a significant share of attention.
Just like for the competitive environment, companies must be able to recognize who the major players are, i.e. the most important movements, and, among these, distinguish between potential adversaries and allies, and decide with whom to avoid confrontation and who to engage. This is a lesson that companies are going to pay dearly to learn, if they don't understand the message now.