Elon Musk's Politics Might Cause Twitter "X" Collapse
Should CEOs publicly endorse candidates or political issues?
What do Disney, Apple, and IBM have in common?
All these companies are pausing all advertising on X, formerly known as Twitter, following antisemitic posts from Elon Musk. Let me talk about one of Musk's tweets, and you will judge what Elon Musk described as his "dumbest" social media post ever.
Early this month, Musk agreed with a tweet that accused Jewish communities of pushing "hatred against whites that they claim to want people to stop using against them." Had Musk not responded to this specific tweet, the tweet would have languished in obscurity. More than an hour later, after it became evident that Musk's tweet was doing massive damage to his already dented brand, the billionaire attempted to clean up his claims, but nothing he said made it better.
Elon Musk apologizes for his antisemitic tweet but tells advertisers, "Go ###k yourself."
If these big companies stand their ground and make their advertising freeze permanent, it could cost X $75 million this quarter alone, as reported by the New York Times.
The Truth is that an extended boycott could bankrupt the company. However, Musk is confident that X users will blame the brands rather than him for the collapse if the company declares bankruptcy. Musk is worried about the future of the X, but not enough to make peace with advertisers.
At Dealbook Summit in New York, Musk attacked Disney chief executive Bob Iger, who told the audience earlier that "the association with that position, and Elon Musk, and X was not necessarily a positive one for us." Musk responded, "If someone is going to blackmail me with money, go #### yourself."
For X (Twitter) to go bankrupt, three things must happen.
- A critical mass of users leaves X.
- A critical mass of advertisers goes somewhere else.
- Enough celebrities depart the platform.
This is what I believe:
I believe X (Twitter) will be fine.
Most people cannot leave X because all their celebrity heroes are still on X. Celebrities won't give the platform up because they make money using it. Celebrities care about their image and how they can use it to make money.
Many people will stay on the platform as long as celebrities use it and advertisers go where eyeballs are.
I believe that enough advertisers will stay on X. The company will continue to make more money, and X will be fine. However, the bigger question is whether businesses and business owners should make their political stand known.
When a CEO gets political, the reactions are usually mixed.
Michael Jordon was apolitical for a long time because he didn't want to impact his shoe sales. When he was asked to endorse Democrat Harvey Gantt — Charlotte's first Black mayor attempting to beat Republican Jesse Helms to become the state's first Black senator — Jordan declined. Jordan said, "Republicans buy sneakers, too."
Jordan was the most famous athlete in America and around the globe, and he refused to endorse a Black man who was running against an arch-segregationist for the Senate seat in North Carolina. Soon after his retirement, Jordan became a billionaire, and many people understood his stand.
Steven Poole, a sports journalist at CNN, later explained, "Jordan had a brand; he had an image he was trying to protect, and it served him well. Look where he is today and what he's doing. There are many things that he's done supporting hospitals and children's causes, etc. He might not have been in a position to do that had he taken a stand at that time." When everyone viewed Jordan as a basketball player, he considered himself a businessman. I think he made the right choice at that time.
CEOs who went public with their political views.
In 2020, Expensify CEO David Barrett sent a memo to his customers, urging people to vote for Joe Biden. Goya Foods CEO Robert Unanue urged his customers to vote for President Trump.
These kinds of stands get mixed reactions from customers. That's why most business leaders stop short of publicly supporting one political candidate over another, even when one candidate is undoubtedly more aligned with their values.
CEOs like Intel CEO Brian Krzanich understand the impact of endorsing one candidate over another. In 2016, he stood on the sidelines and tweeted, "I do not intend to endorse any presidential candidate. We are interested in engaging both campaigns in open dialogue on issues in technology." I love his stand and how he approaches every business decision.
Should CEOs publicly endorse candidates or political issues?
Joanne Ciulla, the Institute for Ethical Leadership director at Rutgers Business School, says the issue is fraught.
She adds, "Leaders have to consider whether an outright endorsement of one politician or party would frighten some employees and create a hostile environment for those whose political beliefs are not aligned with the CEO's." This is a serious issue; CEOs must be careful about endorsing candidates or political issues. They shouldn't let their personal political views cloud their judgment.
You must recognize that someone in a position of power over someone's livelihood has more impact on them. This impact is different than your or my impact on others. Leaders should create an environment where employees feel safe to express their opinions without imposing their views on others.
The demotivating effects of communicating a social-political stance.
Corporate political activism has yet to be completely understood.
No one knows the long-term impact on the business's bottom line, but everyone knows corporate stands on social-political issues greatly impact employees' motivation. Studies prove this, "Results demonstrate an asymmetric treatment effect of taking a stance depending on whether the employee agrees or disagrees with that stance. Namely, I observe a demotivating effect of taking a stance on a social-political issue with which employees disagree and no statistically significant motivating effect of taking a stance on a social-political issue with which employees agree."
So, regarding employees' performance and motivation, there is no upside for a company to endorse any social-political issues. I'm not talking about ethical or moral issues. Corporations have a responsibility, obligation, and duty to say something regarding ethical and moral issues.
However, most social and political issues are polarizing. There's no consensus among the general public on right and wrong, making it tough. So, leaders should create a safe space for others to be themselves without impacting their decisions.
Back to Elon Musk, it seems he is addicted to sharing his thoughts quickly, which is less than ideal. This only adds to the chaos at X, transforming it from a profitable platform into what's now seen as a collapsing company.
Your thoughts?