On Feb. 5, CVS Caremark announced it will stop selling tobacco products at an estimated cost to their revenue line of 2 billion dollars per year, announcing its mission statement as "helping people on their path to better health." This announcement is stunning in a number of respects.
First, consider the courage it takes for C-Suite executives to live their purpose despite the risk that investors may abandon them and thereby put their own jobs in jeopardy.
The second stunning aspect of this announcement is that more companies have yet to deal with values conflicts that are often at the heart of the loss of trust among employees and the general public. A statement of mission defines the essence of a company and, if that is unclear, it invites deeper values conflicts between the company and the stakeholders it seeks to serve.
For example, Goldman Sachs does not have a mission statement. It does have a set of business principles the first of which says "our clients' interests always come first." Goldman's record fine of $550 million by the SEC and subsequent conviction of one of its traders (for defrauding customers in the Abacus deal) is an example of values drift. Goldman drifted from being an Investment Bank to being a trading company to increase profits.
The CVS action raises much larger questions.
Will Rite Aid, whose mission statement tells us they want to "help our valued customers lead healthy lives," follow CVS? Will Walmart
And what about Coca-Cola? They say their mission is: " To refresh the world. To inspire moments of optimism and happiness. To create value and make a difference." They are implicitly connecting sugary drinks with happiness. A message with more authenticity and integrity would be, "we sell momentary pleasure at the expense of your long-term health and we do this because it benefits us and our stockholders despite the future increase in your communities' health care costs." Look on Coca-Cola's website and you will see all manner of statements about sustainability and fighting obesity. Can a person or a company have integrity when such values conflicts go unmanaged?
At the heart of most major trust violations are basic values conflicts that go unmanaged. This was true of the NASA Challenger and Columbia disasters (schedule and budget versus safety), the BP Gulf Oil spill (profit versus safety) and most of the behavior that led to the global financial crisis including, mortgage fraud and Libor manipulations (profit versus trust and transparency).
So here's to CVS for taking a bold move to towards integrity. People and companies are imperfect and struggle to always practice what they preach. The CVS action reminds us that being truly trustworthy requires that people and companies constantly examine their espoused beliefs, identify conflicts and find the courage to do the right thing.
I hope other companies will be inspired and move beyond the appearance of values integrity through clever wordsmithing and image motivated corporate philanthropy. The path toward organizational trustworthiness goes through foundational values and ongoing acts of courageous drift correction. I am inspired by CVS and will continue to be a customer. I may even buy their stock.
Robert Hurley is a professor of Management at Fordham Schools of Business. He is the author of The Decision to Trust: How Leaders Create High-Trust Organizations (Jossey-Bass, 2011).