I am delivering the keynote address at the Marquette University College of Communications this morning in about an hour. I had a marvelous discussion over dinner last night with Dean Lori Bergen, who has brought energy and verve to this Milwaukee-based institution. She made a profound observation about the core values of the school, the emphasis on community service and giving unselfishly of oneself. As we drove to dinner, she opined that the ethos at many schools is what you can learn in four years that will enhance your marketability and future compensation. Not so at this school, based on my chat with five students over drinks at Johnston Hall; Taylor Trovillion, for example, worked as a Congressional aide as part of her semester in Washington, D.C. at the Aspin Center and now is out to change the world.
The essence of my message this morning (see full text attached) is that companies must move from License to Operate to a new standard, License to Lead. My rationale for this assertion is that License to Operate, the freedom to sell products, raise necessary funds and make profit, is not sufficient in the wake of the Great Recession of 2008-9. Trust in business has been eviscerated by the failure of huge enterprises central to the global economy. The keys to the car were then handed over to government, which now has proven itself incapable of rational decision-making given the obsession with ideological purity on both sides, driving the car into the ditch last summer (both in the EU and the U.S.). We are now observing an unprecedented dispersion of authority, from the Arab Spring to the Facebook rebellion against debit card fees at Bank of America. The least credible spokespeople are now government officials and CEOs, the most credible are academics, employees and a person like yourself. The bottom is on top.
In order to achieve License to Lead, I suggest that businesses pursue the following course:
1) Principles-based Leadership Replaces Rules-based Leadership—We need to be seen as having an operating credo, not simply obeying the law but operating in a smart zone beyond minimum public expectation and legal strictures.
2) Take On Issues of the Time—If you are a brand, emulate the Dove Campaign for Real Beauty, which connected deeply with women by becoming an advocate for female self-image. If you are a corporation, explain why fracking is good, what chemicals are being put into the ground and then recovered for proper treatment. How you do what you do is now everybody’s business.
3) Radical Transparency—Establish benchmarks for performance, then go public with the results. Hold your executives accountable not just for financial metrics but for social ones, such as environmental standards or proper supply chain practice.
4) Employees First—Instead of the usual practice of communicating first to Wall Street, regulators and media, talk first with employees because trust is built from inside out.
This is a substantial makeover of corporate behavior. It needs a revolutionary leader. That person should be the Chief Communications Officer. The inspirational programs at Wal-Mart, GE, Starbucks, Unilever and several other companies are led by Chief Executives advised by CCOs, who are also central to the execution of the change management. The CCO needs to replace the Chief Legal Officer as the primary advisor to the CEO, because status quo (License to Operate) must not be continued.
So off to a quick shower and then my speech. Tell me what you think of my thesis.