Combining courage and values can pack a powerful punch. Think the Civil War and the Emancipation Proclamation, Rosa Parks and the bus boycott, MLK and civil rights, Nelson Mandela and forgiveness, Mikhail Gorbachev and the end of the Iron Curtain.
Now, think CVS. Not just as a drugstore, but as a poster child for aligning corporate values with the greater good of society. Courage + Values + Stores.
CVS Caremark's President and CEO Larry J. Merlo made this case in his public announcement a few weeks ago:
Ending the sale of cigarettes and tobacco products at CVS/pharmacy is the right thing for us to do for our customers and our company to help people on their path to better health. Put simply, the sale of tobacco products is inconsistent with our purpose.
Purpose? Doing the right thing? Not exactly common business parlance. Most companies are driven by the mandate to "maximize shareholder value," and in so doing they're rewarded by Wall Street and their shareholders. Although more companies are moving in the direction of business social responsibility, many executives view this as a limited scope instead of an overarching prescription to do good.
Language recently circulated by a major business leader associated with the Committee to Encourage Corporate Philanthropy reinforces this point:
As corporate leaders, we have a responsibility to represent all of our stakeholders in the most enlightened way possible. This means meaningfully promoting the interests of our employees, customers, consumers, and communities, as well as the needs of our shareholders.
While this holistic approach is admirable, why don't business leaders just say, "In the interest of our employees, customers and stakeholders, we have an obligation to do good, to do the right thing?"
CVS offers us this moral clarity by using values as a guide to doing the right thing.
CVS' move stands apart, especially because you don't learn courage in B-school. While many corporations are admired for taking on risk to launch new products, most managers are not rewarded for courage in advocating to do good. By and large, the minimum wage, environmental safeguards, workplace protections and a myriad of other workplace breakthroughs were not volunteered by companies; they were mandated by government. And although there are many companies that nurture their employees and more and more companies that are jumping onto sustainability, that's generally not bold or courageous. These moves are accepted as within the norm, and they're good PR.
So, take a bow, CVS! You're a notable exception and, hopefully, a tipping point in moving companies from being profit-driven, to profit-and-purpose-driven. It takes a lot to forgo $2 billion in revenues to do the right thing. But as more companies embrace the concept of purpose over profits, maybe a trend will start.
Other key executives have already embraced this idea. Both Richard Smucker, Co-CEO of The JM Smucker Company and Indra Nooyi, CEO of Pepsico have said that, by starting with purpose, including social good, corporate success will follow. Young emerging business leaders are also showing promising change. In Net Impact's 2013 annual survey, 83 percent of MBAs said that they would take a 15 percent pay cut to work for an organization whose values match their own.
If you look at the numbers, it's easy to see why tobacco no longer fit with CVS' values or purpose. In the state of Ohio, one out of five deaths were cause by tobacco products. Tobacco use costs the state $4 billion annually. This translates into an effective tobacco "tax" of $602 for every family in the state.
In 1962, 40 percent of Americans smoked. Currently, 18 percent smoke. This dramatic decrease has come about because government, doctors, educators and some courageous tobacco insiders flashed the message, through media and education, that tobacco is bad. Corporate profit taking is an important last bastion to fall. Other examples where courageous CEOs have taken bold, values-based action are worth mentioning.
An iconic story is Malden Mills (now Polartec), the second largest U.S. textile mill, which burned to the ground in 1994. The next day, its owner and CEO Aaron Feuerstein traded on collecting almost $1 billion in insurance money to announce that he would pay all employees wages and benefits until the mill was rebuilt. Malden Mills made worldwide headlines, and has inspired many CEOs to examine values first before deciding to close plants.
Another American manufacturer, Parker Hannifin, the world leader in motion and control technologies, became a trend-setter almost ten years ago when it made preventive and alternative medical services available to its tens of thousands of employees. This long-term move cost the company money, but its CEO Don Washkewicz deemed it to be the right thing to do. He felt that healthy and happy employees, not just short-term profits, were the company's most important assets. Their motto: "Together, We Can," sums up their commitment to collaborative and bold efforts that take on the world's most challenging issues in medical breakthroughs, energy efficiency, food supply and advanced transportation needs.
During the Great Recession, international paint manufacturer Sherwin-Williams looked first at its "core principals" to determine employment levels. Based on that guide, its senior leaders decided not to lay off employees, despite a dramatic drop in sales.
I mention these examples because the more companies that follow, the better off we all are. Companies and their CEOs are powerful influencers and role models, especially to the 100 million Americans in the workforce. And they create a ripple effect. We need more of them to have the courage to simply do the right thing for employees, society, country and the world.
Muszynski is Founder of Purple America, a national initiative of Project Love/Values-in-Action Foundation to re-focus the American conversation to a civil, productive and respectful dialog around our shared values. To see America's shared values and get involved, go to www.purpleamerica.us