This interview, formally conducted in January 2012, started as an argument two and a half years earlier, when the economic crisis was at its peak. Dov Seidman — the founder and CEO of LRN, a global firm that helps companies with such matters as legal and regulatory compliance, reputation and principled performance, environmental sustainability, business ethics, governance, leadership, and culture change — had published a book, How: Why HOW We Do Anything Means Everything…in Business (and in Life) (Wiley, 2007). In August 2009 he visited the strategy+business offices to propose an article about the link between enlightened corporate behavior and performance. The most sustainably successful businesses, he argued, were also the most moral — not through formal programs like corporate social responsibility (CSR), but through what he called “sustainable values” (as opposed to “situational values”). They had an orientation toward sustaining human relationships built into their day-to-day practices and behaviors. Hence his book title: How a business is operated, led, and governed is just as important as what that business chooses to produce.
Highlights from “A Conversation with Dov Seidman”
Find out how success follows companies that make a difference for consumers, people, and the world in this interview featuring LRN CEO Dov Seidman at the Carnegie Council.
To view the full interview, click here.
I was skeptical. Sure, many companies promoted themselves as ethical and responsible, but was there really a clear cause-and-effect relationship between values and performance? Among the most successful companies were quite a few that were known for visibly amoral — or, in some cases, exploitative — values and practices. Seidman persisted, arguing that the world’s growing transparency and interconnectedness were changing the culture of business: making it harder for large companies to operate purely on the basis of expediency and short-term returns. Consumers and employees were shifting their loyalty to companies they perceived as more principled. He added that in part because of the general criticism of corporations that had followed the economic crisis, there was a groundswell of enlightenment among the CEOs he knew. “We’re in a world,” he said, “in which you have to live and earn your reputation; you can’t just assert and manage it.”
We found one intriguing point of common ground when we talked about the government bailouts of General Motors, AIG, Bear Stearns, and Fannie Mae — companies that had all been dubbed “too big to fail.” Their size wasn’t the reason they had been saved, we agreed. They were really “too connected to fail”: too enmeshed in a chain of suppliers, financiers, customers, and community members. If they went down, too many others would go down with them, so they had to be kept alive. In that light, maybe Seidman’s argument made more sense; maybe companies would increasingly have to justify their existence on the basis of the ways in which their presence benefited an interwoven web of other companies and people.
Since then, the business world has seen two almost contradictory trends involving corporate values. As organizational learning expert Meg Wheatley recently noted in an interview in this magazine (Winter 2011), many companies seem to be moving away from enlightened management and retreating to command-and-control authoritarianism, often in the name of cutting costs. At the same time, there is indeed a visible wave of interest in the kinds of values that Dov Seidman champions. Banks and health insurance companies are becoming more consumer-centric; food companies are developing healthier packaged goods; automakers are putting less-polluting vehicles on the roads; and some company leaders are talking about authenticity, integrity, and participative management.