values that drive ethical leadership take stock of more than
idea that directions can be given for the gaining of wealth,
irrespective of the considerations of its moral sources ...
is perhaps the most insolently futile of all that ever beguiled
men through their vices. — John Ruskin (1819-1900)
business leaders need to get over that initial wince when
they hear the words, 'corporate social responsibility,'"
says Ken Crites '97. "It seems like in our culture,
business folks always assume that social responsibility will
hurt the bottom line."
thinks they're wrong, and he's come to appreciate the power
of "values-based leadership." He is a marketing
director at Green Mountain Coffee Roasters, a Vermont company
ranked "Best Corporate Citizen" by The CRO
(formerly Business Ethics) magazine in 2006 and 2007.
Crites, "values" can be "just another way to
measure success, or it can [mean] who delivers the greatest
good to our global community. Shareholders fall into that
good, but so do farmers."
More than a quarter of GMCR's coffee beans are certified
fair trade, and Crites says the company is working to increase
that number next year to 38 percent. Distributors pay a premium
for fair trade items to help farm families earn stable incomes
and build strong communities. But buying fair trade is more
than a feel-good exercise. "In a lot of ways, [fair trade]
stabilizes your supply chain," says Crites. "If
your farmers can't feed their families, they're not terribly
concerned with the quality of the coffee."
company uses its resources to build strong communities in
other ways, too. "Good corporate social responsibility
work is one way to differentiate ourselves," Crites says,
noting that GMCR employees can spend up to five days per year
volunteering on company time. Some build affordable housing
with Habitat for Humanity, while others choose to work with
schools, religious organizations, food banks and other local
donate at least 5 percent — usually more — of
our profits to charitable organizations," adds Crites,
who is quick to point out that this yearly commitment hasn't
stopped GMCR's compounded annual growth rate from reaching
23 percent since the company went public in the 1990s. "We
know that our numbers need to be in order for us to keep doing
good and good for you
Feddersen, the Kellogg School's Wendell Hobbs Professor
of Managerial Politics, practicing social responsibility is
also good business, and previously unmoved sectors of the
business community are beginning to warm to the idea.
you're seeing is an understanding by firms that customers
and employees and stakeholders are concerned with a broader
set of issues," says Feddersen. "Companies realize
that a failure to be responsive and responsible creates a
risk for them." The risk, he explains, may be to a company's
good name (if it declines calls to action from its customer
base) or to its bottom line (if the company misses an opportunity
to invest in, say, new technology that would significantly
reduce energy costs).
with Associate Professor of Management and Organizations Adam
Galinsky and Earl Dean Howard Distinguished Professor
of Political Economy David
Austen-Smith, Feddersen developed a new Kellogg course,
Values-Based Leadership, to explore the psychology
and sociology associated with leadership.
says the course imparts the analytical tools that enable students
to decide what to do should they find themselves part of a
system that violates their values or ethical sensibilities:
"Do you quit, or do you still work within that system?"
If the flawed system helps bring about a greater good —
be it social or financial — this can be a complicated
question to answer.
a company without clearly defined and consistently implemented
values may have more than an academic conundrum on its hands.
It may have a disaffected work force.
Crandall '01 has seen
it happen. Now a senior vice president at Colorado-based Qwest
Communications, Crandall has been with the company since 1998.
In early 2002, she says, the company lacked vision: It was
on the outs with its customers and suffering under the alleged
financial impropriety of its then-CEO. Its reputation was
such a source of embarrassment for employees that many refused
to be seen sporting Qwest apparel in public.
think it's safe to say that morale was fairly depressed,"
before long, Qwest had a new CEO, Dick Notebaert, who turned
the company around, cleaning up its finances and adjusting
its attitude. Crandall says one of the most important things
Notebaert brought to the company was a cohesive value set
that emphasized customer service, teamwork, ethics and profitability.
"It was to be the rallying cry," she says, and it
gave employees a brand they could be proud of again.
days, the company is active in community outreach through
The Qwest Foundation, which focuses on K-12 education and
technology in the classroom.
me, being an authentic leader means that your own values are
aligned in your personal life and your work," Crandall
says. "I've got this framework that guides the way I'm
going to lead my part of the organization."
says she wouldn't have it any other way: "I would not
be in a company that doesn't give back."
some companies, giving back is as central to the mission as
organizations consistently lead with their values," says
Howard, the associate director of the Kellogg School's
for Nonprofit Management and of the Social
Enterprise at Kellogg Program. "As mission-driven
organizations, all strategy, planning, operations and growth
stem from the mission of the organization. This constant focus
on mission translates to values-based leadership for their
board and staff."
adds that although the missions of for-profit entities have
not traditionally focused on social change, many for-profit
leaders have begun to adopt a "multi-stakeholder"
approach to management, meaning they consider not only whether
their practices will add value to the company, but also weigh
the costs and benefits of their decisions to other stakeholders,
which may include suppliers, employees, the community or the
planet. "Like nonprofit leaders, these for-profit leaders
must maintain a keen eye on the overall values of the organization."
nonprofit organizations lead with their values, many of their
managers lead with both eyes on the ever-powerful market.
are an incredible force for human development," says
Andrew Youn '06, founder of One Acre Fund, an 18-month-old
nonprofit launched with the ambitious goal of solving Africa's
hunger problem. "The highest financial returns in the
world are in the least-developed countries. Poor people in
Africa are as smart as any free-market consumer in the United
States and ought to be treated with the same dignity,"
organization — which provides small loans, on-site training
and basic medicines to Kenya's poorest farmers — has
come a long way from its humble beginnings as a business plan
written for a Kellogg entrepreneurship course. It has been
featured everywhere from Glamour magazine to Chicago
Public Radio and received grants from the Echoing Green Foundation,
the Draper Richards Foundation, the Yale University Entrepreneurial
Society, the Business Association of Stanford Engineering
Students, and board members of the Kellogg School's Larry
and Carol Levy Institute for Entrepreneurial Practice.
importantly, at the end of its first year, One Acre farmers
had grown 4.3 times more food than they had the previous year.
They had also repaid 98 percent of their loans.
says the Kellogg experience was instrumental in his decision
to pursue nonprofit work.
was like jet-fuel in helping to develop my interest in social
change. I first became interested in Africa during the Kellogg
Social Impact Conference, and came to Africa for the first
time through my summer internship, through the nonprofit program."
in social enterprise and outreach runs high at Kellogg. In
2003, students founded the Board
Fellows Program, which provides one-year fellowships to
Kellogg students it places on the boards of directors of Chicago-area
nonprofits. The school's Social
Impact Club is an award-winning chapter of Net Impact,
a national network of leaders bettering the world through
business. The Kellogg Neighborhood
Business Initiative, also run by students, provides pro-bono
consulting services for promising local businesses, and Business
With a Heart routinely organizes large-scale community
am floored by the depth and breadth of work that my 2006 classmates
are doing to make the world a better place, in both the nonprofit
and for-profit sectors," adds Youn, whose organization's
annual donor list includes 150 of his classmates. "Our
generation is at a point in time where we all are making enough
money, and we are increasingly searching for a way to infuse
meaning in our lives. Kellogg does a fantastic job of encouraging