When Hugo Boss had an opinion

Walking the streets of Amsterdam I came across little plaques on the pavement. They are markers placed outside the houses of those who lost their lives in the Holocaust with their names, ages and place of death if known. A simple memorial that makes that frightful period of history more real. A visit to the Mercedes-Benz museum (I was expecting much more!) in Stuttgart tells another aspect of the story, of how businesses contributed to the tragedy and profited from it. Would you wear Hugo Boss if you knew that he was a member of the Nazi party and that his eponymous company manufactured uniforms for the dreaded SS? BOSS is now a $2 billion company which would indicate that time and good marketing have rebuilt the brand after the death of its founder in 1948.

Brands cannot have a political opinion. Nor can they have morals. Only their people can. And if the goal of a company is defined as maximizing value to its shareholders the people cannot have an opinion that directly or indirectly negatively impacts revenue. As billionaire Ikea founder Ingvar Kamprad told Forbes in 2000, regarding his teenage ties to the Nazi party, “Perhaps even you did something in your youth that you now know was stupid. Why did I not reveal this past foolishness myself? Simple. I was afraid it would hurt my business.”

Dassault was one of the rare European businessmen to refuse to work with the Nazis and was interned as a result. Bosch, though personally against Hitler, allowed his company to be involved in the war effort as a matter of survival even as they tried to protect and rescue Jews and support the resistance.

As I wrote in 2015 – discussing net neutrality – companies cannot have a conscience. They do things that they think will help them be seen as a ‘good’ company. Being ‘good’ usually results in a brand premium, hiring premium and hence better shareholder value. It is extremely rare for a company to take a position that will jeopardise any of the above. Since ‘good’ varies by cultural norms it is not unusual for companies that have an excellent track record on gender diversity in India running women-only software centers in Saudi Arabia. Or those espousing free speech in US undertaking self-censorship in China. Or firms whose reputations are built on the excellence of their beef burgers removing it completely from their menu here.

What about the other side of the coin, the one that non-corporate honchos can employ, namely boycotts? Historically boycotts have often worked to drive social change whether it is stopping flights, imports, funding, products. One of the earliest examples with an Indian angle is that in 1791 sales of Indian sugar made by er, ‘free men’ rose dramatically after a boycott on sugar made by slaves. This was in the context of the Parliament in Britain failing to ban slavery which it did after 20 years of intense and creative lobbying.

Companies aren’t “woke”, but people, including CEOs, can be. I’ll wrap this note with a quote from Narayana Murthy of Infosys “A clear conscience is the softest pillow in the world”.

Happy Pongal!

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