Major corporations don’t want to do business with Putin.
A remarkable difference between 20th-Century and 21st-Century business is the profound transparency and split-second communication shared between companies and stakeholders. Today’s companies enjoy a deep and instant understanding of their customers, suppliers, employees, and shareholders needs and preferences. That capability, afforded by technologies growing at an exponential rate, is delivering a clear stakeholder message to Board rooms: we don’t want to do business with Vladimir Putin’s Russia.
Since Russia’s February 24 invasion of Ukraine, unspeakable devastation and human suffering has been delivered unfiltered and in real-time to our screens. Immediately sensing their ecosystems’ collective will, hundreds of companies have swiftly and voluntarily severed their business ties with Russia.
The Yale School of Management maintains a running summary of companies that have fully or partly suspended business with Russia. It includes giants like Amazon, Apple, Hyundai, and Volkswagen. As of April 7, 507 companies are on the list. Those companies are forgoing short-term profit to follow their stakeholders’ strong calls for responsibility.
Massive cessation of business activity in Russia includes McKinsey, Coca-Cola, McDonald’s, and Daimler pullouts. These and many other companies have been proactive, decisive, and often faster than governments issuing sanctions. Their brands are online 24 hours a day and their stakeholders can organize and spotlight Russian connections in minutes, not months.
What a profound contrast with the late 20th Century! Back then, activists had to organize brigades of volunteers to make landline phone calls and stage headquarter lobby sit-ins to extract relationship details now open to anyone with a smartphone.
The Russian invasion of Ukraine is also a cyberwar, and companies with related skillsets have taken up the cause.
- Microsoft found and fought a FoxBlade malware attack hours before Russian armor blitzed onto Ukrainian soil.
- Elon Musk sent Starlink terminals to provide internet access in Ukraine. Now Starlink is that country’s most downloaded app.
Ultra-capable, highly responsible businesses are a 21st-Century challenge for the Russian aggressor. Peter Diamandis frequently notes that exponential technologies enable individuals to do what twenty years ago only companies were able to do, and companies to do what only governments were able to do. Imagine a conversation between Russia’s Ambassador to the United States, Anatoly Antonov, and U.S. Secretary of State, Anthony Blinken:
Antonov: “We demand that you stop sending Starlink terminals to Ukraine.”
Blinken: “That’s not our government, that’s Elon: you’ll have to call him. Oh, his companies can probably launch satellites faster and at lower cost than you can launch missiles to knock them down. Good luck with that call.”
A 20th-Century act of imperial aggression meets a connected, enabled, and vocal 21st-Century global community. Even if Russia prevails militarily, the economic loss will be profound: its economy may shrink 7% this year, and likely more. That is devastating for its extractive commodity-based financial strategy, one already doomed to long-term decline. Russia’s pre-invasion $1.7 trillion GDP is smaller than the market capitalization of exponential business leaders Apple, Microsoft, and Alphabet. Tragically, the Russian people will be among the greatest losers in a pyrrhic, backward-facing victory.
The intimate and instant two-way communication that today’s businesses and their leaders enjoy with stakeholders will reinforce their shared beliefs. Good businesses don’t mix with bad actors.