The Russian-Ukraine conflict has been on our minds, and on our screens, for the last few weeks. Real-time images of war and devastation have forced all of us to reconsider our own personal values as we determine who and what we will support.
The Ukraine War has also created massive implications for brands.
We have seen hundreds of brands suspending or limiting their operations in Russia while finding ways to support Ukraine. In the age of purpose-led marketing, this is absolutely expected. Consumers are looking at brands that have made claims about what they support and are holding them account if their actions in the time of a crisis do not match the promises made. We saw #BoycottMcDonalds trending on all platforms and consumers pouring out litres of Smirnoff Vodka as a personal effort to stand up against the war.
Consumers expect brands to do their part in standing up against the war, and a large part this expectation means an expectancy to withdraw from Russia.
Considering that consumers trust businesses more than they trust governments or media (https://www.cbsnews.com/news/edelman-trust-barometer-2021-ceo-government/), brands have a big part to play in affecting societal change. Failure to play the part can result in reputational damage and loss of profit – even in conflict-free regions.
However, we need to consider that for many brands, responding to the Ukraine War goes beyond a few statements published on social media channels. For many, it means shutting down their business. This is a decision that comes with massive consequences. Of course, it is a decision that carries vast financial implications, but it is a decision that creates moral dilemmas.
For starters, when a brand ceases operations in Russia – what happens to the employees left behind? Most brands will articulate their brand values around the welfare and the promotion of their employees. Leaving them unemployed and unable to earn due to a war many of them have protested fundamentally contradicts the value of taking care of employees.
Some brands have met the challenge head on; leave Russia but take care of the Russian workforce.
One example of this is Interpublic Group. Its CEO, Philippe Krakowsky, published an update on LinkedIn, in which he outlined the business’ response to the Ukraine War (source: https://www.linkedin.com/pulse/update-ukraine-russia-philippe-krakowsky/?trackingId=aNnArvXVrEfGMnrAJTkv0w%3D%3D)
Krakowsky mentions the following: “As you know, we are first and foremost a company that always strives to live up to our values. We believe in speaking up against oppression, whether that has to do with issues of race, or on behalf of other marginalised communities and speaking up on behalf of democratic principles. We’re committed to initiatives that support sustainability. And we have always been clear that we value and stand by our people and their well-being. That’s core to our culture, since the nature of our business requires that we have the industry’s best talent – and that we each act as part of an interconnected global network, showing up for each other and working together for the common good.”
This is a stellar example of a brand living up to its values, even at the cost of potentially sacrificing its profit. But Krakowsky and the Interpublic Group took it further to consider the impact that their decision to suspend their operations in Russia would have on their Russian colleagues: “The issue we’ve therefore been wrestling with is how to reconcile the fact that discontinuing our operations in Russia could mean abandoning our approximately 200 colleagues there, many of whom we’ve been fortunate enough to work with for decades…”
“…By having taken the time these past two weeks to plan for this eventuality, we will be able to leave our Russian teams with enough capital on their balance sheet to pay their people for a minimum of six months. We will also be engaging with them in the coming weeks, as we cede control of all aspects of management and operations to the local leadership team, in order to ensure continuity for any non-Russian clients who remain active in the market.”
In doing what is possible to take care of their people while suspending their operations in the region, Interpublic Group has been able to live up to their values as best as they could.
Another moral dilemma to consider is how a brand’s decision to suspend operations can negatively impact the lives of Russian consumers. Many things can be true at once: The Russian invasion of Ukraine and attack on Ukrainians is wrong. Brands should take a stand to affect change. Many Russians themselves have protested the war. And millions of Russian consumers need certain products to survive.
This is the challenged faced by CPG companies. How do you suspend operations when you know consumers depend on your products? Can you justify making the lives of everyday Russians markedly more difficult for a war they themselves do not support?
P&G had this to say: “Our many Russian colleagues, and the people of Russia, face challenges and uncertainty for their futures that are also significant. P&G will continue to support them, but the situation necessitates important changes immediately and over time. We have discontinued all new capital investments in Russia and are suspending all media, advertising, and promotional activity. We are significantly reducing our product portfolio to focus on basic health, hygiene, and personal care items needed by the many Russian families who depend on them in their daily lives. As we proceed with the reduced scale of our Russian operations, we will continue to adjust as necessary.” (Source: https://www.marketingdive.com/news/pg-stops-marketing-in-russia-as-pressure-on-consumer-brands-intensifies/619994/)
Though many global citizens might not approve of P&G’s decision to continue to operate in the region, though at a reduced level, P&G is attempting to live up to its values as best as they can – given an impossible situation.
I understand that the Ukraine War is a nuanced, complex labyrinth for brands to navigate. Sacrificing profit for purpose and values is a difficult decision, often accompanied with heavy human consequences. For me, the war (and the pandemic) proved that brands need to look at their values carefully. They are not empty words plastered on walls and tucked away in the ‘about us’ section of a website. They form the blueprint of how the brand responds to the world it operates in. Values dictate behaviours and decisions. What you claim to value will be put to the test in moments of crisis.