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Mounting Evidence Shows ‘Go Woke, Go Broke’ May Be More Than A Mantra

‘Most diaper companies support Planned Parenthood. Regardless of where you stand on the abortion issue, if you’re a diaper company, you want more babies, not fewer babies.’


As far-left ideologies further embed themselves into American society, growing evidence shows that companies embracing woke capitalism tend to alienate customers, drive away potential employees, and lose profits for investors.

As with all cultural revolutions, it will take decades to measure the total outcome that woke capitalism has had on the economy, but businesses and investors that depend upon quarterly growth and earnings cannot wait that long. Unfortunately, the financial data for companies that go woke is spotty and largely anecdotal.

Some evidence indicates, however, that corporations should awaken from their woke malaise.

Woke capitalism’s fatal flaw is that its principles come from an ideological system, not from rigorous scientific business management principles on which critical decisions should be made.

Take a Trafalgar poll conducted in February 2023 among 1,000-plus likely voters. Nearly 80 percent, whether left, right, or center, said they were more likely to do business with a company that stayed politically neutral or tolerated the many viewpoints of employees and customers.

People across the political divide overwhelmingly want all voices to be heard, including 77 percent of Democrats, 83 percent of Republicans, and 77 percent of independents. While support for corporate political neutrality rises with age, still some 70 percent of young voters aged 25 to 34 and 73 percent aged 35 to 44 favor companies that stay out of politics and support differing views.

Woke Capitalism Hurts Business

Despite the public’s disdain for woke capitalism, many American corporations are entering the divisive political and social fray by going woke.

Journalist and Wall Street Journal opinion contributor Dave Seminara keeps the most comprehensive, up-to-date list of woke corporations. He began compiling it in April 2021 when a whole cadre of companies spoke out against Georgia’s election-integrity law.

Since then, the list has grown exponentially as corporations have taken leftist positions on a whole range of contentious issues, such as abortion, sexuality, parental rights in education, and others.

It is odd that so many corporations oppose these grassroots, family-values issues since family households spend far more money than single households. And families raise the next generation of potential customers.

“Corporations are taking their eye off the ball and ignoring what’s best for business,” said serial entrepreneur Andrew Crapuchettes, founder of RedBalloon, a job board that connects employers and job seekers looking for a place where they fit in.

“Most diaper companies support Planned Parenthood. Regardless of where you stand on the abortion issue, if you’re a diaper company, you want more babies, not fewer babies. Supporting Planned Parenthood is bad for business,” he said.

Politically Neutral Companies Perform Best

Further evidence that going woke erodes business success comes from an analysis done by 2nd Vote Value Investments on large-cap and mid-cap companies measuring their level of engagement on social and political issues against their return on investment.

The group rated companies on a scale from most liberal to most conservative across six issues, including the environment, education, abortion, Second Amendment rights, other constitutional freedoms, and support for a safe civil society.

The analysis showed that neutral companies, which took no political or social stances, outperformed the S&P 500 and the Russell 1000 index, which both went down during the last half of 2021 through early 2023, falling 1.8 percent and 3.2 percent respectively. Neutral companies, however, gained 2.9 percent in the same period.

The group did a 10-year analysis of more than 200 companies that remained neutral over the period and found that neutral company portfolios delivered a far greater return of 334 percent, compared with the overall market’s 230 percent gain.  

“Proponents of so-called woke capitalism claim that companies can do ‘well’ financially by doing ‘good’ politically,” wrote Mike Edleson and Andy Puzder, but the analysis proves otherwise. “The data indicate that, as common sense would suggest, companies that focus on profits outperform companies that don’t.”

CEOs and Boards Abdicate Responsibility

Recognizing the need for more academically rigorous research into woke capitalism, Nicolai Foss of the Copenhagen Business School and Peter Klein of Baylor University set out to answer the question, “Why Do Companies Go Woke?

They defined woke companies as those committed to socially leftist causes with a focus on so-called diversity, equity, and inclusion (DEI) initiatives that began with French postmodernist thinking and the Frankfurt School philosophical movement. These philosophies prioritize personal experience over objective data.

“There is little evidence of systematic support for woke ideas among executives and the population at large, and going woke does not appear to improve company performance,” they wrote. “If corporate wokeness is simply a reflection of a rapid change in social and cultural mores, then why are firms embracing it so quickly, while they often adapt slowly to other exogenous shocks?”

Corporations normally adapt to change slowly and methodically with detailed analyses of potential costs and benefits to guide executive decisions, but in the case of woke capitalism, they have jumped on the bandwagon without a second thought.

“Traditionally, you have corporate policy set by the executive team then middle-managers are tasked to execute the policies that are handed down,” Klein said in an interview. “But we found woke policies are originating from a cadre of middle-management ideologues. They are a minority within the organization but have outsized power and influence.”

He said senior executives, who have not been schooled in woke ideologies, have turned over the reins to the true believers, acting out of fear of backlash. The hoped-for, short-term gain from going woke can come with a high, long-term cost to the company.

They risk alienating customers as well as potential employees who want to work without worrying about their skin color, religious beliefs, or political views. This woke alienation has attracted millions of job seekers to RedBalloon, which offers freedom from stultifying woke corporate cultures.

“Non-woke employees are living and operating in a hostile work environment. They’re not free to speak up. They’re not free to express opinions. That can’t be good for productivity or employee well-being. Companies need to build cultures where everybody feels welcome, but they’re doing exactly the opposite when they go woke,” Klein shared.

And he believes the greatest long-term price corporations will pay for going woke is the loss of creativity and innovation.

“The loss of viewpoint diversity is an impediment to creativity. There is a lifecycle argument here. Once companies have a dominant market share — after they’ve created and innovated — where will the next new idea come from in corporate cultures where everyone is forced to think the same way? Is Disney more creative and innovative now than in Walt’s day? No. Disney keeps following the same old stale formula,” Klein said.

ESG Policies Aren’t the Same as DEI

Klein quickly pointed out that going woke is distinct from environmental, social, and governance (ESG) policies consistent with good corporate citizenship, governance, and ethical behavior. But leftists don’t have a monopoly on that.

“When in a position of running a company and employing people, you have a great responsibility. Companies have to be good citizens and stewards of the planet. They must operate ethically. These ideas, along with diversity, equity, and inclusion (DEI), are actually conservative Christian principles,” RedBallon’s Crapuchettes observed.

It’s Not Too Late to Reverse Woke Capitalism

The good news is that woke capitalism recently arrived on the corporate scene. The concept of “woke capitalism” was introduced in the lexicon by New York Times columnist Ross Douthat in 2015 and it has become a driving force in business since then.

But corporations can still reverse course and prioritize the beliefs and needs of their customers, employees, and stakeholders. Employees want to be rewarded for the work they do, not their skin color, ethnicity, or background. Shareholders want a return on their investments, and consumers want better products and services at good prices.

Early signs show going woke leads companies to go broke. They should turn around now before the company you work for, patronize, or invest in becomes another statistic proving the go-woke-go-broke hypothesis.

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