A poor attempt at humor by someone in the JPMorgan Chase marketing department led to my faceoff with the co-founders of the Rochester Chapter of the Democratic Socialists of America (DSA) on live radio. Chase’s tweet made fun of those who can’t figure out how to keep their bank accounts out of the red. In our debate, I maintained that people should take responsibility for the consequences of their own actions while the DSA crowd advocated that people are victims of marketing and should get some relief from those who impose unreasonable costs on them.
You shouldn’t be surprised that we didn’t reach agreement. But it was something that I said to the younger of the two that stopped him in his tracks (although we didn’t explore it). I am on record as predicting that Millennials will save capitalism (see The Fourth Turning: How Millennials Will Save Capitalism) and cited the Conscious Capitalism movement as being in the forefront of the effort. The Chase tweet was a step on that path. Their infraction, if it can be called that, was minor.
Major gaffes by other global corporations have had farther reaching effect. Swiss food giant Nestle has been cited as damaging the environment, employing child labor and promoting products that resulted in adverse health effects. Walmart has consistently been shown to mistreat its employees. And, Pepsi’s negligence has resulted in illegal destruction of rainforests.
In the 20thCentury, government intervened on behalf of the public, passing laws that protect labor, consumers and the environment. Many of those laws are being questioned today, mainly by business interests objecting to intrusive government. But corporations are taking corrective action on their own to preserve their brands.
Nestle has adopted a ‘shared value’ approach to managing its business. Shared Value is a concept first brought to light by Harvard professor Michael Porter in 2010. It’s the focus of a paradigm shift in corporate strategy that I featured in my book, The Reluctant CEO: Succeeding Without Losing Your Soul. Many would recognize the triple bottom line – people, profit, planet – in its approach.
Walmart has increased minimum salaries and promoted its goal of producing a ‘Zero Waste Future.’ Meanwhile, Pepsi has declared that it stands up for Human Rights. Indra Nooyi, Pepsi’s outgoing CEO, titled her farewell “Leading with a Purpose: Changing the Way We Make Money to Change the World.”
Whether and when these efforts may succeed in restoring the good name of these corporate malefactors is up in the air. But, nevertheless, it’s noteworthy that they were responding to public pressure rather than government oversight. It also remains to be seen whether corporate leaders and their boards will begin to lead with a purpose before their malfeasance lands them in hot water. Dave Osh, CEO of Varlinx, writes about the hidden danger of corporate boards and senior leadership teams being misaligned with strategic objectives. Declaring that “[p]ersonal and professional agendas distort even the most well-articulated narrative unless the narrative is aligned one person at a time…” he advocates getting everyone’s hidden agendas out on the table by creating a “safe environment that fosters vulnerability-based trust.”
“Big Al says: Doing the right thing doesn’t relieve you of the responsibility of doing it the right way.”Excerpt From: John Calia. “The Reluctant CEO.” iBooks.
Easier said than done in my experience.
In The Reluctant CEO, the protagonist decides to drop a profitable product because of its damage to the environment, challenging his board in the process. One reader commented that was an unrealistic scenario. “The CEO would be fired,” she asserted. Maybe so. But the CEO’s mentor and executive coach simply reminds him that doing the right thing doesn’t relieve him of the responsibility to do it the right way.
Corporate realignment around strategies that serve not only shareholders but also communities must begin with the CEO much as it did at Pepsi. But we are a long way from a world where corporations are good citizens as well as good investments.