Purpose is the new business strategy. And socially-minded core values can help drive results.
That was the theme of a wide-ranging discussion by on Tuesday at Coins2Day’s Global Forum in San Francisco between three corporate leaders who’ve reset their company’s missions along these lines.
Levi Strauss CEO Chip Bergh talked about how the company has reoriented how it engages with its suppliers globally. The denim-maker always had a program for ensuring its suppliers adhered to certain safety, wage and labor standards. But a few years ago it augmented that to focus more specifically on worker well-being by working with factory owners to address the healthcare, financial literacy and other needs of their mostly-women workers. The goal: to have 80% of the company’s products made in factories that have these “worker well-being” programs in place, up from 15% today.
The strategy is part of Bergh’s broader turnaround of the company, whose sales peaked in 1996 at $7.1 billion and fell to $4.1 billion in recent years. Revenues are back on the upswing, hitting $4.7 billion last year, and the brand is newly resurgent. His next challenge: continuing to pivot from a “culture of underperformance to a “culture of winning performance and accountability.”
Aetna CEO Mark Bertolini spoke about his recent widely-hailed move to dramatically raise wages for low-earning employees. A detailed study found that its lowest-wage workers were 81% women; most were single mothers, and 20% of the families were on food stamps. But when his team looked more closely at the data, Bertolini realized that simply raising their wages would mean they would lose benefits, since benefit contributions are graded by compensation levels and the lowest paid employees pay zero.
He decided to double down: Bertolini raised Aetna’s minimum wage to $16, an increase of 12% on average and 33% for some. But in addition, the company said it would waive all these employees’ out of pocket healthcare benefits costs. Turnover went from $120 million a year to $27 million; engagement scores are up 1,600 basis points. “I’ve never gotten so many hugs and pecks on the cheek—more in last six months than my whole prior career,” he said.
Walt Bettinger, CEO of Charles Schwab, spoke about the brokerage’s efforts to link strategy and purpose, including a decision to refund 100% of what a client would have paid if they were dissatisfied. Enrollments where the company instituted the policy, Bettinger said, are up 50% over the year before. “Simply being willing to put our money where our mouth is leads to a richer conversation,” he said.
Bettinger closed the session by recounting a powerful story of how an epiphany in a business school class 35 years ago led him to see the value of more mindful leadership. In his last quarter of business school, Bettinger had a night class in business strategy. He’d been a classic type-A overachiever: a 4.0 gpa, a job already lined up, and a healthy dose of arrogance. For the final exam, the teacher handed out a single sheet of blank paper.
“He said, ‘I’ve taught you everything I have about business except one thing,’” Bettinger recounted: “’What’s the name of the lady that cleans our building?’” Bettinger couldn’t name her—and failed the test. The professor pointed out they had been meeting every week for ten weeks and the woman had been there every time. Bettinger told the audience the lesson he came away with was “the lesson I’ve carried with me for the past 35 years: It’s not about being served. It’s about serving others.”
More and more companies are seeming to agree.