Building that ‘Wall’

22 Jun, 2017


Building that ‘Wall’

While no one knows how much money Congress will authorize for President Trump’s border wall with Mexico, more than 700 companies have already notified the federal government of their interest in working on it.

That’s understandable. Trump wants a “contiguous physical wall” securing 2,000 miles of border, which would make it “one of the biggest government infrastructure projects ever,” according to the Los Angeles Times, requiring “a whole lot of steel and concrete (not to mention construction jobs).”

“There hasn’t been anything like it,” says a spokesperson for Meridian Precast Inc., a California firm. “It’s a big project, lot of money. We want a piece of the pie.”

Any slice of that pie could come at considerable cost, at least in terms of a firm’s reputation with certain audiences. In that sense, Trump’s wall might someday make a classic case study of the kind of public affairs challenge that afflicts companies today but in previous years didn’t exist.

“Major ideological differences are creating controversies about a company’s business activities that wouldn’t have arisen a few years back,” says Public Affairs Council President Doug Pinkham. “Just in terms of this administration, the wall is only the beginning. You’ve got firms supporting deportation efforts, companies building controversial pipelines, and banks and others benefiting from the repeal of regulations — they could all end up embroiled in disputes with political activists and, in some cases, the general public.

“My guess is there are going to be many more such controversies over the next four years, with deliberate efforts made to damage corporate brands.”

Unaccustomed to Public Scrutiny

Not so long ago, many B2B and B2G companies didn’t have to worry about how the public perceived them. Most firms that end up bidding on wall-related projects fit that category. They are unaccustomed to controversy and may be unprepared for it. The customers such companies are used to caring about were government agencies such as the U.S. Army Corps of Engineers.

The wall has been in the news for months, “so emotions and the willingness to mobilize for or against it are incredibly strong,” Weber Shandwick’s Gary Sheffer tells PR Week. Six in 10 voters are against it, a Quinnipiac poll in April found, and legislators in several states have introduced bills calling for boycotts of companies that participate.

Meanwhile, the Mexican government has urged Mexican companies to steer clear of it, “considering your reputation,” and Emmanuel Macron, the newly elected French president, has warned LafargeHolcim Ltd., a giant cement maker, not to participate.

A desire to fly under the radar, while understandable, could be naïve.

Hoping to avoid reputational fallout in this atmosphere might represent wishful thinking. “We try not to bring our political beliefs into it,” says a spokesperson for Halbert Construction, a California firm. Maybe so, but critics won’t.

“Building the wall is not the same as selling widgets,” says Daniel Webber, Edelman’s general manager. “Until a project like the wall comes along, a lot of companies bidding on a piece of it didn’t have to think much about political controversies. Their executives weren’t well-known, and they didn’t necessarily do much in the way of community engagement or talking a lot about it if they did. They care about their customers — the government, often — and their immediate stakeholders. Maybe they went to industry events. But that’s about all they felt they had to do.”

Under the Radar

A desire to fly under the radar, while understandable, could be naïve. “We’ve entered a new era, politically and economically,” says Evan Kraus, president and managing director of operations for APCO Worldwide. “This shift that subjects B2B and B2G companies to such scrutiny is not limited to the U.S. You see it in Europe as well, where an isolationist and nationalist sentiment — in politics as well as in economics — has emerged, threatening the international economic order that resulted from World War II and the Bretton Woods Agreement.”

While globalization has meant increasingly complex supply chains, companies are finding that they have to defend themselves not only against criticism of their own operations but also against criticism of government policies wherever they have relationships with suppliers. They will also find themselves attacked over environmental issues here and abroad, for actions for which they bear little or no responsibility.

“For publicly traded companies, what used to matter most was economic efficiency alone,” Kraus says. “What mattered was maximizing profits, controlling costs and ensuring stability of supply. That’s what stockholders wanted. But today questions of political expedience — reputational risks for working on the wall, for instance — have taken on a new importance. Economic efficiency and political expedience aren’t the same things. There has always been a tension, a balancing of these considerations, but now it is more intense than ever.”

For companies concerned mainly with economic efficiency, “communicating broadly about their purpose, about their contribution to society, and about how they treat their people was just not in their corporate DNA,” Kraus says. “Of course they thought about these things, but now they really have no choice. Their operations are being scrutinized as never before, and by more potential adversaries.

Companies that want to work on it — whether they are building it or providing lighting or even security services — need to think about how these decisions will affect their employees and potential employees.

“At one time, B2B companies didn’t have to worry too much about these kinds of risks as long as they didn’t have a great deal of exposure to the consumer market,” says John Himle, CEO of Himle Rapp & Co. “But that’s no longer the case, and once again the wall is a good instance of how this works. Let’s say a construction company does a lot of work with hospitals and universities. The construction company ends up building part of the wall. Because so much of its other work is performed in an environment where there’s a large public governance component, with hospital boards and university governing boards, work on the wall could become an issue the next time that firm bids on a new wing of a hospital or a college dorm. These are political risks that, for the most part, didn’t exist in past decades.”

No One Is Immune

Kraus offers another possible scenario. “Let’s say you supply components for thermostats,” he says. “In previous decades, a supplier could just sit back and let the company manufacturing and selling the thermostats talk about their environmental effects. But now the company making and selling the thermostats is looking to you to talk more about your efforts to safeguard the environment, so they can justify their own choices to their consumers. So you have to step up. The fact that you haven’t done so already doesn’t represent a deficiency on your part, but there’s been a change.”

That change requires telling your own story — not just to customers but to the public. Here too, Trump’s wall provides a useful example. Companies that want to work on it — whether they are building it or providing lighting or even security services — need to think about how these decisions will affect their employees and potential employees.

“The first thing you have to think about is your own people and how they would respond to being involved in the project,” Sheffer says. You “can’t proceed without an upfront, clear explanation to the team why you’re participating. You have to do this at the very least because a failure to do so can cause trouble for attracting talent down the road.”

In addition, social media has made everybody a journalist — and a potential critic. “It’s now easy to use video and the written word to enrage lots of people who, until now, may not have given much thought to an issue or a company,” says Pinkham.

“You didn’t used to have to think about noncustomers looking at your website, much less search engine optimization,” Webber says. “But if you don’t, and there’s a controversy, the first thing someone sees if they Google your company is what your critics are saying. You’re defenseless. And even if you still assume what the general public thinks doesn’t matter, what critics say will damage your ability to attract talent and retain employees.”

In today’s ideologically charged climate, a B2B or B2G firm’s website “can attract more eyeballs in an hour than it has in their entire company’s history,” Webber says. “When that happens, it is too late to protect yourself. The bottom line is this: You cannot start using digital tools when you are being attacked. You have to start telling your story before the controversy occurs, and it will often be a case not of ‘if’ but ‘when.’ The pressure is on.”

Want More Information on This Topic?

Contact Doug Pinkham, president, Public Affairs Council

Additional Resources

Hear Council President Doug Pinkham talk about risk communication strategies.

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The New Normal: Working with the Trump Administration