A move away from the GOP by U.S. businesses, however unlikely, would be a defining moment

The backlash against Georgia’s recently-passed restrictions on voting, especially by voters that are more likely to support Democratic candidates, continues to build. Several Georgia-based corporations, including Delta Air Lines (which is the state’s largest employer) and Coca-Cola, have gone from carefully parsed statements of displeasure about the new legislation to stronger public comments from the companies’ CEOs on national media. Major League Baseball – rather surprisingly, in my opinion – decided to move this year’s All Star Game and Amateur Draft from Atlanta to Denver due to the controversy.

In yesterday’s Morning Brief from Yahoo! Finance, editor-in-chief Andy Serwer suggests the fallout from the ongoing situation is “changing the relationship between politics (mostly the GOP) and business.”

Used to be that if you ran a business in America you’d stay as far away as possible from politics, (unless you sold George McGovern T-shirts or some such.) The math was simple. Take a stand and potentially lose 40% to 60% of your customers. So most businesspeople when asked a question about politics kept mum, even when they felt strongly about an issue.

We accepted this choice of money over principles because as customers, employees or shareholders while we might not agree with someone’s politics, we just wanted the business relationship and knowing someone’s politics might make things awkward, inconvenient or uncomfortable.

Serwer quotes Dick Parsons, who is the former CEO of Citigroup, Time Warner, and was also briefly the chairman of the board of CBS. Parsons is African-American and a “lifelong Republican,” he said. He was one of 72 Black executives who signed a letter protesting Georgia’s new law.

My party has sort of said, ‘Well, look, we got one or two choices, we can either battle for those votes going forward or we can just try and preclude them from showing up again. And I think the direction that has been taken, certainly in Georgia and in other states is, ‘let’s not go out and battle for those votes. Let’s just try and keep them from showing up.’ That’s just flat wrong.

Dick Parsons

Companies like Delta and Coke have faced boycotts from both sides of the political spectrum: from the left for not speaking out soon enough or more forcefully; and from the right for now being too “woke.” Faced with that type of pressure, the traditional relationship of American businesses to the Republican Party is looking like it needs some counseling.

Senate Minority Leader (few things give me more pleasure than writing that phrase, even though because of the filibuster he still has tremendous power over what can and can’t get passed in Congress) Mitch McConnell made it clear that he doesn’t believe corporations should be playing politics:

Corporations will invite serious consequences if they become a vehicle for far-left mobs to hijack our country from outside the constitutional order. Businesses must not use economic blackmail to spread disinformation and push bad ideas that citizens reject at the ballot box…. My warning, if you will, to corporate America is to stay out of politics.

Sen. Mitch McConnell (R-KY)

Of course, that doesn’t include corporate free speech in the form of massive contributions to Republican campaigns, which McConnell is explicitly in favor of. “Give us the money and keep your mouth shut” is the real message here, which is not unlike getting mugged in broad daylight.

Adam Serwer (no relation to Andy Serwer), senior editor at The Atlantic, also wrote on the topic recently with a warning not to buy this “rebellion” against corporations by the GOP.

Republicans cannot imagine labor relations as exploitative except in that someone might have to sit through a tedious video on race or gender sensitivity in the workplace. They do not perceive the concentration of corporate power as perilous unless companies’ desire to retain their customer base interferes with Republican schemes to entrench their own political dominance. They see freedom of speech as vital, unless it prevents them from using the state to sanction forms of political expression they oppose. Their criticisms of “woke capital” go no deeper than this.

As such, the Republican anti-corporate turn is entirely superficial. That’s a shame, because the concentration of corporate power has had a negative effect on American governance, leading to an age of inequality in which economic gains are mostly enjoyed by those in the highest income brackets. Since the 1970s, despite massive gains in productivity, most Americans have seen their wages rise very slowly, while the wealthiest have reaped almost all the gains of economic growth. That outcome was a policy choice, not an inevitability.

I suspect that this posturing by both corporations and the GOP leadership will ultimately not change very much. But it’s possible if politicians like McConnell overplay this, assuming that there’s no where else for American business to go but back into their loving arms, they could be in for a surprise. The Democrats could make a play to be more friendly to business, provided improved respect and rights for American workers was part of the deal. Again, not likely, but not impossible. The Democrats would also have to overcome the antipathy of the left-wing of the party toward big business, which wouldn’t be easy at all. But an opportunity exists.

Is technology dramatically reshaping organizations?

Today’s post is adapted from my response to a recent discussion board question in my graduate management class. The questions are included below before my responses. Here’s a brief synopsis of the “point” and “counter-point” arguments:

POINT

In today’s chaotic, uncertain, and high-tech world, there is essentially only one type of design that is going to survive. This is the electronically configured organic organization. 

We are undergoing a second Industrial Revolution and it will change every aspect of people’s lives. The changes the large corporations used to take a decade to implement now occur in one to two years. Companies that are successful will be designed to thrive on change, and the structure of those organizations will have common characteristics.

COUNTER POINT

There is a saying that every generation thinks it has discovered sex. This seems to be the case with technology and how it is going to change the world completely.

Technology will transform the structure of organizations at a much slower rate than many believe. For instance, it is useful to go back and ask if the railroads changed the world. There were definitely changes in how commerce and industry were arranged, but life remained the same, and the way people related to each other remained the same.

1) Do you agree more with the point or counter-point arguments? Why?

I’m pretty solidly in the counterpoint camp here, though 2020 has given me plenty of reason to rethink that position. But I’ll stick with it. The “every generation thinks it discovered sex” saying is very appropriate. It’s difficult to gauge the amount of change human innovation and technological advances have made if you only consider the changes that have occurred in your own lifetime. For many younger Americans – and this is certainly not a criticism – it can be hard to imagine a time before the internet allowed virtually instantaneous communication and information sharing. For the very youngest, it may even be hard to imagine a time that you couldn’t do all of those things on a small handheld device. But tech advances have been happening for centuries, though once electricity and electronics got added to the mix, those advances sped up remarkably. So it’s important to consider that the changes we’re seeing right now are just the next step in a long line of technological advances, and that there are many more to come. Businesses and organizations will need to be ready to adapt as the next “big thing” comes along.

As a side note, I’d like to suggest that while technology makes new possibilities available on a regular basis, most businesses and organizations tend to be rather slow in adopting them. The exception has been this year: I’ve seen more innovation and change, much of it technology-based, in higher education in less than a year than I’d seen in two decades of working at my community college. This was made necessary by the immediate need to move to “remote” and “online” instruction and services, of course, but it does suggest that it’s not really necessary to have task forces and study groups that can take years to formulate plans to implement new technologies. When push comes to shove, we apparently can do it on a much shorter timescale; in 2020, years became months, and months became days. I imagine the memory of how we were able to quickly adapt will influence similar decisions in the future, even after the pandemic ceases to make them time-critical.

2) Do you think organizations will change dramatically by the year 2070 or do you think they will be similar to organizations today? What factors do you think will be most important?

2070 is fifty years from now. I was a child in 1970 but, through the miracle of YouTube, Netflix, and other streaming services that would have been science fiction back then, I can still look back at my childhood and see how the world was. Television – “brought to you in living color on NBC!” – was becoming the dominant social force that it has been since it supplanted radio’s previous role (though it’s worth remembering that most people only had three or four TV channels to choose from); business machines were still mostly mechanical and analog, with room-sized mainframe computers only available to the largest corporations and government; and American society was conflicted by the civil rights movement (which began to gain momentum in the 1960s) and the women’s rights movement (which really grew in the 1970s), the winding down of American involvement in Vietnam and southeast Asia, and the continuing Cold War. And nobody had even heard of Watergate yet. Labor unions were still powerful, with one in three workers belonging to one.

When you compare fifty years ago to today – and factor in the accelerating growth of technology (as quantified by Moore’s Law) – it’s difficult to imagine that organizations could possibly not change in the next fifty years.

3) Do you think the trend toward decentralization and employee empowerment will continue?

This one I’m less certain about. Power is central to human motivation. The ability to control one’s own destiny is often intertwined with the need to control other people, and those with the means to enforce that control will hardly be eager to give it up. So decentralization and “employee empowerment” will continue so long as those ideas serve the other needs of those in power: productivity, profitability, and stability. If by giving employees the sense that they control their own work lives improves the efficiency and success of a business or organization (though the ability to work from home or make more decisions on their own), those trends will be allowed to continue. If it reaches a tipping point where control appears to be weakened, I’d expect a move back to more centralized, supervised work.