Will Parkland Flip the Switch on Gun Control?

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The images are as familiar as they are chilling: Aerial footage of children walking out of a school single file. Anxious parents being interviewed. Advocates and opponents of gun regulation sparring on the screen.

The pattern has grown depressingly predictable. But after the shooting last month at Marjory Stoneman Douglas High School in Broward County, Fla., that took 17 lives, public outrage took an unexpected turn. Rather than fading, the resolve intensified. It began to take concrete form in action, with students staging protests and walkouts. Several major corporations ended their relationships with the National Rifle Association, and large retail chains announced plans to limit sales of firearms.

Something seems different in the aftermath of the Parkland massacre. Its influence has been greater and lasted longer than reverberations from the shootings at Sandy Hook, Las Vegas or Orlando. Businesses responded quickly and decisively. Why? It has to do, in part, with who the victims and survivors are.

“What we are seeing here is the power of social media, because these kids are old enough to be in the generation of digital natives who know how to work the power of their networks,” says Wharton marketing professor Americus Reed. “That, plus the fact that there is a general trend of consumers asking what companies stand for. It never used to be that you would ask the CEO and CFO and COO these kinds of questions, and now part of the job is to stand up and be the face that says these are our values, this is what we stand for, and this is why we do what we do.”

The Parkland shooting has created an inflection point, says management professor Michael Useem, director of Wharton’s Center for Leadership and Change Management. “It is creating one of those sometimes-hard-to-really-get-your-hands-around sea changes in how we think about the world,” he noted. “It feels to me irreversible and I think for the first time, policy toward gun control, gun use and access to automatic weapons is now such a threshold issue that everybody from gun makers to food distributors is being pressed to make a case one way or the other.”

The power of the moment stems not only from who the victims were, but also the timing of the shooting, says Steven Jay Berkowitz, University of Pennsylvania professor of clinical psychology and director of the Penn Center for Youth and Family Trauma Response and Recovery. “This shooting occurred at a school with a high-functioning group of families, and they are smart kids, and I think whatever the current zeitgeist is with the #MeToo movement also changed the playing field,” says Berkowitz, who has written widely about gun violence and its lasting trauma.

“One of the things that was quite different about this than Sandy Hook was that it was the parents at Sandy Hook making the effort,” he noted. “This time it’s directly the survivors who are making the effort, and they are the next generation that corporations and others are going to want to include in their thinking and marketing plans. That confluence of factors and the fact that they are old enough to espouse their views and be articulate about it has really made a difference.”

Berkowitz points out that some of the surviving students at Sandy Hook Elementary are also high school students today, “so this is now a generation that, unfortunately, has really been exposed to this, and they are worried and afraid, and rightfully so, and they are taking it upon themselves to become active. And it’s had a lot of influence.”

Reed says these elements are “creating this interesting watershed moment in terms of never-before-seen traction.” But, he adds: “Whether it translates into policy changes, that’s a different question.”

“What we are seeing here is the power of social media, because these kids are old enough to be in the generation of digital natives who know how to work the power of their networks.”–Americus Reed

The Snowballing Business Reaction

Just moments after the murders of 17 students and staff at Marjory Stoneman Douglas High School, a corps of surviving students took to social media. But their #NeverAgain organizing prowess quickly went well beyond the digital realm. They lobbied state lawmakers in dozens of meetings, organized rallies, inspired walkouts at other schools, participated in a CNN town hall and have drawn six-figure donations to their cause from the likes of Oprah and George and Amal Clooney.

They have also worked the mainstream media like pros. In interviews on national television, they have been remarkably poised and persuasive. What has given their message extra power, though, is a certain first-person credibility, closing the distance on a policy question by being personally connected to it. In that regard, the gun-regulation drive has something in common with the same-sex marriage movement, which, following decades as a dead issue, also gained a sudden traction. Said Berkowitz of the Parkland students: “They made it humanizing, so that adults and others said, ‘That’s what I’d like my kid to be able to do.’ And that’s what has happened with many of these social movements. Because of the humanizing aspect of it, you can’t ignore your gay neighbor or your gay cousin, nor can you ignore high school kids that can tell you what they experienced in these horrific incidents.”

Businesses were quick to feel the heat to say where they stand on the question of guns in America. Very soon after the Parkland shooting, several companies distanced themselves from the NRA — something that has not happened before, according to many observers. First National Bank of Omaha said it would not renew a contract to issue a NRA-branded Visa card. United Airlines, Hertz, Avis, Allied Van Lines and others ended their discount programs for NRA members, though they have been noticeably reticent about saying why.

Business and politics have never been strangers. Useem says it has always been the case that the CEO is responsible for knowing the mayor, the governor, the legislature and other leaders. What’s different now, he says, is that the environment is becoming more political and partisan, and “I think we are going to see the chief executive and the senior vice president for communications and many people in the C-Suite that are going to have to spend more time on how to position the firm.”

Businesses “have been stepping up around all sorts of issues that matter to stakeholders, and this is an obvious one for them,” says Christopher C. Geczy, an adjunct finance professor at Wharton and academic director of both the Wharton Wealth Management Initiative and the Jacobs Levy Equity Management Center for Quantitative Financial Research. The motivation is not necessarily only virtuousness. “We always have to remember that, unless companies specifically are organized around stakeholder benefit, they have the bottom line in mind when they are doing this,” he says.

The skirmish between Atlanta-based Delta Air Lines and the Georgia legislature has become a study in corporate-political brinkmanship. When Delta announced it was cutting perks for NRA members, the Georgia legislature killed a fuel-tax exemption worth tens of millions. Critics of the Republican-led repeal warned that the decision could cost Atlanta its bid to lure Amazon and its second headquarters. The episode gave Delta CEO Ed Bastian a chance to say that the company’s “values are not for sale.”

The decision by Dick’s Sporting Goods to no longer sell assault-style rifles or high-capacity magazines, and to raise the minimum age for gun purchasers to 21, was perhaps the most prominent reaction by a business, and its CEO was quite specific about the reasons for it. “When we saw what happened in Parkland, we were so disturbed and upset,” Edward Stack told The New York Times. “We love these kids and their rallying cry, ‘Enough is enough.’ It got to us.”

It also might have helped that the gun-violence issue was somewhat personalized for Stack. He said the company had determined that the alleged Parkland shooter, Nikolas Cruz, bought a gun at a Dick’s store (though apparently not the gun or type of gun used in the attack). Stack went well beyond steps taken by other CEOs. He “implored” lawmakers to take up “common sense” gun reform and urged other companies to follow his lead. Hours after Dick’s announcement, Walmart followed suit, and then others. Late last week, outdoor retailers REI and Mountain Equipment Co-op announced that they would no longer sell products, including CamelBak water bottles and Bell bicycle helmets, made by Vista Outdoor, which also owns a gun manufacturing business.

“For the first time, policy toward gun control, gun use and access to automatic weapons is now such a threshold issue that everybody from gun makers to food distributors is being pressed to make a case one way or the other.”–Michael Useem

Some called the move by Dick’s and others canny ones, an investment in the customer of tomorrow, since younger Americans are generally more likely to support gun control than older ones. But it’s not at all clear that younger generations will remain less enamored of guns than their parents or grandparents.

A majority of 18- to 29-year-olds polled by the Pew Research Center — 58% — said in an April 7, 2017, survey that they supported gun control, which is indeed significantly more than the 44% of Americans ages 50-64 who said they supported gun control. But looking at analogous data from nearly a quarter of a century earlier, the spread has not changed much. Pew figures from 1993 show that 64% of 18- to 29-year-olds supported gun control, with 55% in the 50- to-64-year-old group supporting it.

The question posed by Pew, though — “What do you think is more important: to protect the right of Americans to own guns, OR to control gun ownership?” — may not be picking up on subtle shifts in the public’s increasing sophistication to differentiate among various solutions: for instance, the willingness to generally support gun-ownership rights while still wanting to see certain changes in gun regulations.

Regardless of the companies’ motivations, many are pleased to see business overtly co-mingling with social causes. “Let’s not pretend it wasn’t opportunistic. Are companies doing this in the service of some moral stance, or are they doing it in service of an economic argument? It’s hard to know the answer to that,” says Reed. “But at a certain level, I’m not sure I actually care. If that gets AR-15s off the street and bump stocks and certain classes of firearms banned and not allowing mentally ill people to walk into gun shows and buy a gun without a permit, then I’m OK with it.”

But for others, the morality of guns is one thing, making money another, and never the twain shall meet. Berkshire Hathaway chairman and CEO Warren Buffett called the idea of his firm no longer doing business with gun manufacturers “ridiculous,” saying he would not impose his personal views on Berkshire’s business decisions or investment criteria.

Levers of Influence and the Leadership Vacuum

Part of the influence of the current gun-regulation movement comes by way of being spontaneous and grassroots. The students in Parkland are organizing a March for Our Lives protest in Washington, D.C., on March 24, and companion marches are popping up in other cities on that date.

But how will the movement sustain momentum? “I think that the next step for them will be to mobilize other students, which seems like it’s happening,” says Wharton management professor Mary-Hunter McDonnell. “Walkouts in solidarity, that is the real next step. It needs to move beyond this one school in Florida. It’s very vivid in the public’s mind that this happened to these students, but it will be more effective if students everywhere are participating and hammer home the point that it could happen anywhere.”

“We always have to remember, they have the bottom line in mind when they are doing this.”Christopher Geczy

One rallying cry that has emerged is for pension funds to divest their portfolios of ownership in gun companies — particularly one type of fund. Teacher pension funds in at least a dozen states, it turns out, own stock in American Outdoor Brands, which makes the AR-15, the gun model used in the Parkland attack.

But for activists who want to have influence, selling stock and calling for divestment may not actually be the best approach. “If you focus outcomes solely on being able to look at yourself in the mirror, if you just dump gun manufacturer stocks so that you are investing in a manner consistent with values, I get it,” says Geczy. “But when we engage with management, with the manufacturers, there’s a chance we might also see dual benefits from ownership and the betterment of stake holders like teachers and students.”

Selling stock simply means someone else will own it, potentially concentrating ownership in fewer hands, he points out. Retaining stock ownership and influencing policy and leadership through levers such as shareholder activism and engagement might actually be more efficacious to change. “Engaging is a very powerful technique. The open questions are, for a fiduciary – does it cost money to divest? – and if you engage, might you have more power to see ultimate change?”

The other important consideration is, if social issues become the primary criterion for investment decisions, where does it stop? “The issue becomes one of when do you start paying attention to every issue?” says Geczy. Assault weapons may be the problem investment to screen out now, but what about environmental sustainability? Overseas labor? “If you start to screen out everything that matters to someone, the portfolio is very likely going to have diversification problems.”

 

Viewed in this way, the price of entry to the gun conversation is cheaper than it once was. U.S. gun sales have fallen off since the election of President Donald Trump, and with it, stock prices of gun makers. American Outdoor Brands, which owns Smith & Wesson, has seen its stock price drop by 67% since Trump was elected, and the stock price of gun maker Sturm, Ruger & Co. has fallen by nearly a third.

“Vietnam galvanized a youth movement. This is analogous. This is our teenagers’ Vietnam in many ways.”–Steven Jay Berkowitz

Trump continues to wobble on his position regarding gun regulation, which only confirms the widespread belief that solutions won’t be coming from politicians. Many perceive a leadership vacuum in both the executive and legislative branches of government. In fact, President Trump, after appearing to signal support for gun regulation and taunting lawmakers for being afraid of the NRA, became quiet on the issue after he and Vice President Mike Pence met with the NRA. Trump and Pence “don’t want gun control,” tweeted NRA executive director Chris Cox after the meeting.

The inertia has helped to feed the momentum of the opposition, says Reed: “It’s like, ‘If not now, when? If not us, who?’ The fact that politicians can’t get that done … there is a massive leadership vacuum there. There is a sense that we have to do this ourselves.”

The tack Parkland activists are taking is a course observed long ago by Philadelphia city planner Edmund N. Bacon: When the people lead, the leaders will follow. But today’s news cycle moves fast, and while there’s no doubt that public conversation around gun regulation has picked up surprising steam this time around, the question of whether voters are finally ready to re-evaluate the place of guns in America remains an open one. Many wonder whether the conversation will even retain its intensity through the mid-term elections.

“I think one sign that has already occurred is the fact that it hasn’t just been the kids in Florida protesting. It has spread,” says Berkowitz. “I also think we’ll see what happens on March 24 — when the March for Our Lives protest is planned for Washington, D.C., and other cities — for one of the signs of whether this really is a national movement. But so much of our history of social change in this country has come from the youth movement, and one way of thinking about it is that it comes in 50-year cycles. Vietnam galvanized a youth movement. This is analogous. This is our teenagers’ Vietnam in many ways.”

Image credit: By Lorie Shaull, CC BY-SA 2.0, https://commons.wikimedia.org/w/index.php?curid=66648619

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