Alumni Honorees Urge Students to Emphasize Ethics
| 2002 Alumni Achievement Awards
Raymond V. Gilmartin (MBA '68)
Orin C. Smith (MBA '67)
Marjorie M.T. Yang (MBA '76)
Egon P. S. Zehnder (MBA '56) |
At the 2002 HBS Alumni Achievement Awards panel discussion, held in Burden Auditorium October 3, award recipient Margie Yang shared a story about a presentation she gave recently on corporate social responsibility to a group of students in China. After her talk, a confused young listener approached her.
“She said, ‘But we all know that in order to succeed in business, you have to be selfish and evil!'” recalled Yang. After exposure to years of communist rhetoric about exploitative capitalists, the student was amazed by Yang's talk. “When I said it didn't have to be that way, it was a revelation to her,” said Yang.
As part of the School's Leadership and Values Initiative, Yang and three other honorees returned to HBS to share their perspectives on what they hold as indispensable to successful leadership — incorporating ethical values into business decision-making. And to provide students with more opportunities to meet such outstanding alumni, for the first time the Alumni Achievement Awards were presented in the fall rather than the spring. The session, chaired by Dean Kim B. Clark with the assistance of four secondyear students, was part of the required curriculum for first-year MBA students.
Merck's Ray Gilmartin has overseen the distribution of his company's river-blindness drug, Mectizan, to more than 25 million people worldwide and recently launched a partnership with the Republic of Botswana to bring HIV/AIDS treatments into the country. He discussed how and why values drive his company's practices. “Our responsibility is not just discovering great drugs, but helping people gain access to them globally,” said Gilmartin.
Orin Smith, president and CEO of Starbucks, agreed that ethical actions formed the foundation of good relationships with suppliers, customers, and employees. “An important portion of our customers cares what kind of company we are,” noted Smith. “If they hear we're exploiting farmers, we risk losing business and also employees.” He emphasized that low turnover is a competitive advantage for Starbucks, which depends upon its frontline staff to maintain customer quality for millions of purchases each year. “People don't like to work only for a paycheck,” said Smith. “We're able to be an employer of choice.”
Yang, whose Esquel Group is a leading textile and apparel manufacturer, didn't shy away from the fact that her industry is typically regarded as anything but socially conscious. Acknowledging that “most people think of us as running sweatshops,” Yang explained that her grandfather had taught her differently. “He told me, ‘You have a community of people who work with you — it's your job to take care of them.'
“When a company competes by using cheap labor, essentially they are saying, ‘I have an advantage because my people are poorer than yours,'” she continued. “That creates a conflict, because when your people become better off, you lose competitive advantage.” Instead, Yang has found ways to leverage technology and management expertise to reduce costs; she noted that her company employs four Harvard MBAs, which is unusual for the apparel industry. “The apparel business is one where management skills have not made as much impact, so we have an opportunity,” she said.
Egon Zehnder, founding chairman of a global executive search firm, observed that most boards of directors seeking new leadership now put the quality of personal integrity first on their list. His consultants must develop creative ways to assess the ethical makeup of candidates. “We use case presentations, but that's not really reliable, because you don't know if someone is just a good salesman and talks a good game,” he said. The only way to get a true assessment, he added, is to “reference check, reference check, reference check” with higher-ups, peers, and former subordinates to get a clear picture of the candidate.
In conclusion, Merck's Gilmartin noted, “So many times when people talk about ethics, they talk about the big things, but what you really need to worry about are the incremental, day-to-day decisions.”
