University of Southern California

Companies with a Conscience
Top CEOs Discuss Leading with Integrity at Marshall’s Inaugural Corporate Stewardship Conference
April 9, 2014 • by News at Marshall

Marshall’s first Corporate Stewardship Conference brought visionary CEOs and leading academics together to discuss the need for companies to not only be profit-driven, but community and socially minded.

Over 250 business leaders, academics from USC and other leading universities and students gathered at the Davidson Conference Center at USC on Feb. 20 to gain on-the-ground perspective from category-defining CEOs Howard Schultz of Starbucks, Terri Kelly of W.L. Gore and James Sinegal (retired) of Costco on what it takes to successfully lead companies that embrace socially conscience missions.

The conference, from the Marshall School of Business and its Center for Effective Organizations (CEO), was organized to honor leadership expert Warren Bennis, University Professor and Distinguished Professor of Business Administration.

USC President C.L. Max Nikias set the tone for the gathering and reflected on the appropriateness of bringing the best and most forward-thinking minds in leadership together for a conference honoring Bennis' and spotlighting Lawler's and the CEO's contributions to the management field.

“USC has long been dedicated to planting seeds of character, service, and leadership in every student.  For decades, Warren Bennis has inspired countless Trojans whose careers and companies have blossomed through his wisdom and counsel.  Their personal lives and their surrounding communities have flourished, bearing a legacy of accomplishment and accountability that will continue for generations. “

James G. Ellis, dean of Marshall, spoke about Bennis' impact on the school. "In the world of business there are leaders, there are managers and there are founders and Warren founded the industry of leadership," said Ellis. "The founders are the ones who should truly be thanked by everyone because they set us all on a different path as Warren has done for us and he's done for the Marshall School of Business since he's been here. I am profoundly appreciative for what he's done for me and the school and how he has helped so many of his colleagues and particularly his students."

James O’Toole, affiliated research scientist with CEO, spoke about how Jack D. Steele, former USC business school dean, charged him with finding and hiring the two best management professors in the country -- Warren Bennis and Edward Lawler, Director, CEO and Distinguished Professor of Business. Lawler joined USC in 1978 to create the CEO, which, 35 years later, is the leading research organization of its kind in the world. Bennis followed the next year.

In the initial conference keynote, Howard Schultz of Starbucks—a company recognized for the benefits and opportunities it provides even for its part-time employees—spoke about the guidance Bennis provided him when he was starting out with Starbucks, which he acquired in 1987 with just 11 stores and 100 employees.

"It's an honor for me to be here today. It's hard for me to put into words about how I can express my respect, my admiration and my honor of the relationship I've had with Warren that goes back 25 years with him and his wife Grace. I feel like I have been so blessed. I heard Warren give a speech 25 or 30 years ago. I was a young entrepreneur and after his speech I went up to him and said, 'can you help me.' What followed was a 25 to 30 year friendship that has provided me with so much insight and perspective throughout the years," said Schultz.

Schultz went on to call on business executives and entrepreneurs to help fill a leadership vacuum that has been created by public officials.

“What we need in all aspects of our lives is truth: truth with a capital T. You cannot be a leader today in any forum, in any institution, in any organization in which you are anything but truthful and authentic. And you cannot be a leader of truth and authenticity only when it’s convenient," he said.

Stuart L. Hart, Samuel C. Johnson Professor Emeritus in Sustainable Global Enterprise at Cornell University’s School of Management, concurred with Schultz during a panel discussion moderated by O’Toole, following his address.

“The overwhelming challenges that we face in the world are number one, inequality, and number two, environmental degradation,” said Hart. “Corporations will have to be built in a fundamentally different way, with a different objective function.”

Terri Kelly of W.L. Gore and James Sinegal, co-founder and recently retired head of Costco, who helped further company cultures that support and inspire their employees to do good both at work and in the world, shared what it takes to build and sustain their organizations.

Much has been written about Gore’s non-hierarchical “lattice” structure in which associates become leaders based on their ability to obtain the respect of their peers and attract followers. Consistently named one of Fortune magazine’s “100 Best Companies to Work for,” Kelly detailed how Gore builds leadership from within.

“Our leadership philosophy is that when you empower associates, it changes how they lead. They lead not through command and control, but through influence,” said Kelly, before describing how job reviews are done through a survey of an associate’s peers, with those at the highest levels or responsibilities subjected to the same process.

“You have to be purposeful in how you organize your leadership. I have found the power of peer pressure to be a wonderful thing,” said Kelly.

Costco has long been admired for the benefits and high wages it pays its retail associates—$21.14 on average an hour—that have resulted in high levels of customer service and low rate of employee turnover, which Sinegal says are the keys to the warehouse’s success.

“Our people are our best ambassadors. We always felt that if we hired good people, and provided good jobs with good wages and good career possibilities, that something good would happen to our business. We believe that very strongly. We promote almost 100 percent from within our company. Everyone is included in our company and this is not altruism. This is just good business,” he said.

Sinegal also described what Costco is doing to reduce their carbon footprint, which includes using skylights in amenable locations, using recycled boxes instead of bags and exploring solar power.

In addition to the keynote addresses, the conference included panels moderated by Christopher Worley and Susan Mohrman, senior research scientists with CEO, with executives from Unilever, PwC, Sony Pictures Entertainment and academics from top institutions.

For more information on the Center for Effective Organizations, please visit: http://ceo.usc.edu/


About the USC Marshall School of Business
Consistently ranked among the nation's premier schools, USC Marshall is internationally recognized for its emphasis on entrepreneurship and innovation, social responsibility and path-breaking research. Located in the heart of Los Angeles, one of the world's leading business centers and the U.S. gateway to the Pacific Rim, Marshall offers its 5,700-plus undergraduate and graduate students a unique world view and impressive global experiential opportunities. With an alumni community spanning 123 countries, USC Marshall students join a worldwide community of thought leaders who are redefining the way business works.