Leadership in an Era of Context Collapse

The phenomenon of context collapse continues to be a vexing issue for organizations. Defined as “the near impossibility, in a social media era, of intentionally and credibly managing different identities with colleagues, with family, and with friends,” this concept was at the crux of the MIT Sloan Management Review 2021 Future of Leadership report, published in collaboration with Cognizant.

In the 18 months since that research was published, we’ve seen more examples of why context collapse is one of the most fraught aspects of our digital age, at both the individual level and the organizational level.

One recent example is the complete fracture of the relationship between Levi Strauss & Co. and top executive Jennifer Sey. Until February 2022, Sey was a brand manager for Levi’s and was said to be a strong candidate to serve as its next chief executive. But her staunch advocacy on her personal Twitter account against COVID-19-related school closures and mask mandates for kids put her in the spotlight. She was told by the company that there would not be a path forward for her. She quit.

“Jen went far beyond calling for school reopenings, frequently using her platform to criticize public health guidelines and denounce elected officials and government scientists,” Ancel Martínez, Levi’s director of business and financial communications, said in a statement to MSNBC. “As a top executive, her words and actions effectively undermined the company’s health and safety policies, creating confusion and concern amongst employees.”

Why are we still surprised by the disintegration of the distinction between our personal and workplace personas? “You may have a private identity and a professional identity that you think are separate, and it turns out that from the company’s point of view, they’re not,” said David Kiron, editorial director of research at MIT SMR and a coauthor of the 2021 Future of Leadership report. “We can each have different points of view about where the lines should be. But context collapse says, ‘There are no lines.’”

This is a big deal for executives, Kiron explained. “We talk about the desirability of bringing your whole self to work. But does anyone really want that? And can anyone really avoid it?” As the lines between public and private are getting crushed, traditional norms are toppling around what does, and should, count as private. “That raises questions about authentic leadership,” Kiron added. “It’s harder to be an authentic leader if you want to please different stakeholders with opposing interests in a transparent, digital operating environment.”

The flattening of multiple identities means that customizing messages for different stakeholders — once a strategy for digital-savvy leaders — might now be a dangerous game. As the 2021 research report notes, “Pervasive digital platforms make leadership initiatives instantly visible and transparent for all to see.”

What we see happening between businesses and individuals is also happening between businesses and governments. We’ve seen this play out with Disney and Florida and the so-called “Don’t Say Gay” bill.

In March of this year, The Walt Disney Co. came out against House Bill 1557 in Florida, referred to by proponents as the Parental Rights in Education bill, which prohibits classroom discussion in grades K-3 on gender orientation and sexual identity. (The bill was signed into law later that month.) Disney, which has major operations in the state, has traditionally been a supporter of LGBTQ rights but was slow to speak against the legislation. The company appeared to do so only after its consumers and employees ramped up pressure and made it clear that they were, as one commentator put it, “no longer willing to interpret silence as a middle ground.”

The story doesn’t end there, though. When Disney disavowed the law, the Florida government’s response was withering: It voted to strip Disney World of its special tax status, a privilege it has had for 55 years. The reprisal is a bewildering case of biting the hand that feeds it, as Disney World’s 50 million annual visitors to Orlando help generate Florida’s more than $5 billion in local and state tax tourism revenue.

“Disney was unable to have one message for their customers and employees, which include many people from the LGBTQ community, and a different message for the government, whose bill threatened that community,” Kiron said. “Disney needed one message, a single corporate identity. Disney had to choose. And their choice had huge implications for leadership.” If Disney World wants to expand, will it now have to go through the county planning board instead of acting autonomously? Probably. Will this slow innovation and growth? Maybe.

The Disney example, along with many other recent scenarios, suggests that context collapse has, if anything, become even more relevant and important to leaders in recent years.

Leaders need to recognize that they are in a whole new operating environment in which corporate free expression is penalized not because what they or the company says is a violation of a law, but because the rule-makers see it as a violation of their values. Milton Friedman wrote in 1970 that the one and only social responsibility of business is to increase profit, so long as it stays within the “basic rules of the society, both those embodied in law and those embodied in ethical custom.” But the Disney example shows that even if companies pursue their profits within the rules of the game, rule-makers may change those rules if they don’t like what the companies have to say. And these changes can undermine the ability of the companies to make profits. For better or worse, and in different ways, leaders might need to account for activist government officials as much as activist employees. The bottom line: Context collapse is truly reshaping how leaders need to think and act.