CEOs discuss the power of purpose
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Fortune assembled a dozen CEOs yesterday for the fourth in our series of discussions on the power of purpose in business, held in partnership with McKinsey. It was an uplifting discussion, with each of the CEOs agreeing that purpose and profit are not at odds in today’s business world. Some excerpts from the conversation:
“The most important lesson for me has been the importance of making all of our employees part of something bigger than themselves…The impact that can have, and the power that has more broadly on our organization, can’t be understated.”
—Alex Gorsky, CEO, Johnson & Johnson
“I think the big insight that I had is that having a purpose as a company and being a profitable successful company are not at odds with each other. They go hand in hand. In fact, I would argue that if you don’t have a purpose, you’ll be less successful.”
—Dan Schulman, CEO, PayPal
“You unleash massive potential when you tie your employees’ personal purpose to the purpose of the company. They will help steer you toward what is important and the stance you will take. Not everyone is going to be happy. But if you stay clear on your purpose…you unleash massive amounts of commitment.”
—Corie Barry, CEO, Best Buy
“It’s important to talk about the values you want to speak out on internally, (and explain) why it is core to your business. Nike has a strong history of fighting for racial and social justice. (That’s) core to our mission and purpose as a company. When the George Floyd events occurred, we ran the ‘Don’t Do It’ campaign, and we made a $140 million dollar commitment on racial and social justice.”
—John Donahoe, CEO, Nike
“You can’t take for granted the notion of purpose, of putting that trust in the bank, so that at a time when you really need your employees, they feel good about stepping up and doing more.”
—Mary Dillon, CEO, Ulta Beauty
“(You need to) take the purpose and demonstrate it with real proof points…We back up our climate strategy with investments to prove we are making progress.”
—Lynn Good, CEO, Duke Energy
After George Floyd, “we took a strong stand that said we are not going to provide or sell any facial recognition technologies. Not at all…That so strongly motivated our employees, our communities and our clients….And purpose and profit go together. Things like that allow us to retain our most talented employees.”
—Arvind Krishna, CEO, IBM
“The pandemic actually brought a purpose to our drivers, warehouse workers, people on a cross dock…they suddenly had a big purpose in getting peoples’ toilet paper delivered, getting peoples’ Purell delivered, getting medicines delivered. That was the prime thing that led to our employee satisfaction figures going up 5%.”
—Brad Jacobs, CEO, XPO Logistics
“There is a rapid increase in the demand for social responsibility from the constituents that each of us work with. Social media is testing us to make sure we are authentic. And I think that’s great.”
—Stan Bergman, CEO, Henry Schein
“Mining has a huge impact on local communities.” Social issues and business issues “come together and they are not things that you can really separate.”
—Richard Adkerson, CEO, Freeport McMoRan
Separately, the folks at Just Capital, who yesterday released their annual ranking of 100 companies that best address stakeholder needs, did an analysis of how members of the Business Roundtable did in that analysis. Some 56 of Just Capital’s top 100 companies were signatories of the Business Roundtable’s statement on corporate purpose last August. And of the 152 companies who signed the BRT statement, half ranked in the top half of Just Capital’s rankings. The point? That the BRT’s commitment to serve stakeholders, and not just shareholders, is more than just words—it is backed by action. More here.
Other news below.
Editor’s note: An earlier version of this newsletter misstated the name of Duke Energy.
Starbucks will link executive pay to success in meeting its diversity targets, as of next year. There are as yet few details on how executive pay will be affected, but the targets include 30% BIPOC (Black, Indigenous and People of Color) employees at the corporate level, and 40% BIPOC employees in retail and manufacturing, by 2025. CNN
Europe has, for the first time since the start of April, overtaken the U.S. in terms of daily confirmed COVID-19 cases per million people. Germany has recorded a record daily increase in cases, and France is introducing nighttime curfews. The markets are tanking again, over fears of incoming restrictions. In that context, the European Commission has urged member countries to get their vaccine distribution plans in order now, and has given them criteria for developing their vaccine strategies. Fortune
A U.S. appeals court has agreed to expedite the Justice Department's attempt to push through its ban on new downloads of the TikTok app in the U.S. TikTok's Chinese owner, ByteDance, won a preliminary injunction against that ban on Sept. 27; it is this injunction that the government is appealing. The company is also trying to get a preliminary injunction against the government's imminent (as in Nov. 12) ban on TikTok's use in the U.S. Reuters
The members of K-pop supergroup BTS just got a whole bunch richer—by around $20 million each—as their management company Big Hit Entertainment went public today. Big Hit's debut was South Korea's largest listing in three years, raising around $840 million. But the company really, really relies on BTS, which accounted for 90% of the company's revenue in the first half of the year. Fortune
AROUND THE WATER COOLER
Facebook and Twitter are limiting the spread on their networks of a New York Post article that reports on what is claimed to be the contents of a laptop left by Hunter Biden, Joe Biden's son, at a Delaware computer repair shop last year. Facebook is restricting links to the article because of its dubious validity—in other words, its anti-disinformation policy has kicked in—while Twitter is rather invoking its policy against posting hacked material. Guardian
Using an A.I. technique called social-media sentiment analysis, a company called Expert.ai has concluded that Joe Biden is ahead of Donald Trump—but only just, and certainly not by anywhere near as big a margin as official polls suggest. Expert.ai's model correctly called the U.K.'s Brexit referendum, which confounded polling-based information, and researchers have said sentiment analysis would also have outperformed polling in calling the 2016 U.S. election. Fortune
There's a push underway to reshore drug manufacturing in the EU—expect a European Commission initiative on this front late November. But that will mean higher costs, and it is not yet clear who will pay for the increases. Politico
Michael Collins, the vice president of Jobs for the Future, writes for Fortune that college degree requirements may be holding back Black job-seekers: "Research suggests that short-term training programs now en vogue among policy elites may not yield the sort of sustainable wage gains that policymakers (and employers) expect…For economic equity and justice, we need to make sure that short-term programs complement degrees rather than replace them, and that we increase access to longer-term credentials such as bachelor’s and graduate degrees." Fortune
This edition of CEO Daily was edited by David Meyer.