Life got a lot more complicated for August Busch III, Jack Greenberg and Douglas Daft this past Friday. They are, respectively, the chairmen of Anheuser-Busch, McDonald’s, and Coca-Cola. Each could be expected to line up to sponsor the Olympics in almost any country. The decision by 66 members of the 122-member International Olympic Committee to award the games to Beijing changed the decision matrix for these executives and for any other captain of industry who is considering putting money behind the Beijing games.
Or at least you hope it did.
Critics of China’s human-rights record risk sealing off the boardrooms of potential Olympic sponsors if they simply demand that these corporations refuse participation immediately. The better course for observers and shareholders is to urge the key people like Busch, Greenberg and Daft to follow a decision-making process that allows for the human rights point-of-view to be heard.
I would be happy if the leaders of these companies – and Nike, GM, etc. – all asked themselves the following questions, and did so in an honest way, involving the public and outside experts as warranted. Here are the questions each Chairman and CEO should be asking their senior managers (and boards) to ponder and answer in writing:
1. Are there circumstances you can imagine under which we would regret our decision to sponsor the 2008 games?
If there are no such circumstances, then the decision to commit dollars to the games is an easy one. But if there are some circumstances, then additional questions have to be asked. Imagine, for example, that a new group of courageous protesters thinks that the approach of the Olympics means that the Politburo would not dare use tanks again as it did in the Tiananmen Square massacre of 1989. Imagine that they are wrong, and that a brutal suppression occurs in the year prior to games. That won’t go so well with the new version of “We’d Like to Teach the World to Sing.” There are other scenarios, including armed conflicts with India or Vietnam, or incidents involving Taiwan or the U.S. If any of these occur, would you regret having inked the deal?
2. If there are some such circumstances, what are the risks the company runs by joining the sponsors’ parade now?
If the games are disrupted, the cost of the sponsorship is down the chute, but that’s not really much of a likelihood. Berlin, Munich and Moscow prove just how stubbornly the IOC can pursue its starting times in the face of unanticipated and even tragic events. The risk would have to come at the home front. Would a significant slice of the American consuming public hold participation in the Beijing games against your products? Surely some number will walk away the moment the deal is announced, but the real market risk would come if the scenarios above unfold. Have you thought through the immediate loss of customer support, and have you factored in the potential hit if one of the nightmare scenarios unfold?
Take Coke, for example. I lean towards Diet Coke when the convenience store cooler offers me that or Diet Pepsi. If Coke does the deal with the PRC, that lean shifts the other way. If Coke is caught up in an Olympics that becomes infamous because of “Tiananmen, the Sequel,” I shift to Pepsi, period. Have you, the boss, ordered up any studies on how many folks there are like me? Do you think the shareholders might expect you to? If you don’t, and things go very bad indeed, do you think the trial lawyers are going to blame you and the board for ignoring the obvious risk of doing the totalitarian two-step with a regime that brought down an American reconnaissance plane in 2001? At the very least you had better paper the file with some rear-end covering advice and analysis on why the potential consumer backlash was studied and found not to be significant prior to the decision to jump in.
3. Who is advising you on this decision?
NBC has a big stake in these games, and no doubt Jack Welch has already called a few of you to ask for a favor. Jack’s going out the door of NBC’s parent GE in a few weeks, and it won’t look so good under the line marked “legacy” if the Peacock Network throws another television party to which nobody comes. So he is going to want to build some momentum for these games, and he’s going to lean on you for an early commitment. (At least he will if he’s half the manager everyone says he is.) That pressure combined with the apparent prestige of sponsoring the games (and the seats – think of the seats!) will force you into a sponsorship unless you quickly put in place a process that will guarantee your company thinks this decision through.
I’m sure you have the best people in the world on distribution systems, IT and personnel. Your chemists and packaging engineers are top drawer, and the new VP for Internet marketing is the greatest. But chances are you have very few folks running around the company who can speak to the probable course that the PRC is going to take over the next seven years, on the risk of serious U.S.-China conflicts during that time, or on the messy interaction of foreign crises and American public opinion. Even the head of licensee operations in Beijing is not going to have a clue (and if he or she thinks they do, they are giving away any claim to participate in the decision). You need some help.
Please, don’t call Henry Kissinger. That’s like asking Arnie Palmer to club Tiger at Augusta. There are new experts around, and you’d be best to get at least a couple on board. Some from the center-right, like Frank Gaffney at the Center for Security Policy, will counsel caution. Others from the center-left will do the same. Some that view trade as the great solvent of communist rigidity will urge full-throated engagement (The Nixon Center comes to mind).
The point is that this kind of opinion gathering will allow you to think this through carefully (and to spread the blame if things go badly wrong). It also allows you to be a corporate leader. Do this right, and a Harvard Business School Case Study on Ethics in Corporate Leadership will have your name on it. In fact, if the three fellows named above got together on this, the world of marketing would be turned on its ear. That’s a lot to hope for, since these companies are already in the PRC and the folks in the Forbidden City are not likely to encourage any high profile debate on the risks involved in joining hands with the hands that routinely grab, imprison (and execute?) Falun Gong members. Still, any effort by corporate titans to think this through would be welcome, even if it is done quietly, provided it is done honestly.
4. If you decide to sponsor the games, will you negotiate with human rights in mind?
Some in the business community are going to commit to the Beijing games and do so quickly. At a minimum, will they negotiate for the right to hire whom they see fit, and to be assured that these employees will enjoy access to Western media and be protected from arbitrary detention? There are numerous other points to be won by American companies doing business in the PRC. If the Olympics are to realize any of the hoped for “liberalization” that proponents of engagement have promised, American companies have got to be the wedge that opens some doors.
Each of these questions should be answered in the 2002 corporate reports of would-be sponsors. Given the realities of international business, the most we can realistically hope for is no news on the endorsement front. I am hopeful that the enterprising Web legions organize a site that tracks Olympic sponsors, and that American consumers generally begin to communicate now with business leaders that these will be closely watched decisions. Start today by contacting the CEOs named above, or any other CEO you feel might be looking at such a decision. Again, angry demands for a boycott are not likely to gain the attention of the suits at the top. But a reasoned appeal for a thorough consideration of the risks involved just might catch the eye of even the busiest exec.
Douglas Daft can be written to at One Coca-Cola Plaza, Atlanta, GA 30313. Jack Greenberg can be written to at McDonald’s Plaza, Oak Brook, IL, 60523. August Busch III can be written to at One Busch Place, St. Louis, MO 63118.
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Are the Chi-Coms using U.S.? In “Selling Out America,” Kenneth Timmerman explores America’s ties to Beijing. Available in WorldNetDaily’s online store.
Hugh Hewitt’s book about reviving Christian witness in an age of unbelief, “The Embarrassed Believer.” is available in WorldNetDaily’s online store.
