Business leaders can regain some of the American public’s trust if they recognize the looming economic crisis is an opportunity to show leadership.
That was the message Kathyrn S. Wylde delivered to an audience at Fordham’s Lincoln Center campus on Oct. 2.
Wylde, the president and CEO of Partnership for New York City, was the closing speaker for the first Summit on Restoring Trust in Business, a day-long series of talks, workshops and panels organized by the Consortium for Trustworthy Organizations.
Under the leadership of Robert Hurley, Ph.D., professor of management in the Fordham schools of business, the consortium was founded to provide tools and solutions for leaders to build trustworthy organizations. Private sector partners include Cigna, Edelman, Ernst & Young and Towers Watson.
Tuesday’s summit brought together 150 academics and representatives from BASF, GE, IBM, Pfizer, Met Life, Shell Oil, Cigna, Ernst & Young LLP, Edelman, MasterCard, Paul, Weiss, Rifkind, and Wharton & Garrison LLP, for candid discussions about trust. Some of the themes participants touched upon were more active listening, engaging with all stakeholders, and moving to a radical transparency in the age of Twitter.
Participants also learned about strategies for solving societal problems at the intersection of business and human needs, such as IBM’s focus on “Building a Smarter Planet,” BASF’s “Chemistry for a Sustainable Future,” Cigna’s “Mission of Human Health and Well-Being” and GE’s “Ecomagination.”
Wylde recalled how she worked in 1981 with the New York City Partnership, which David Rockefeller had founded two years earlier, to help rebuild sections of the city that had devastated by fires and disinvestment.
The idea behind the group, which has since merged with the New York Chamber of Commerce, was to allow business leaders to work more directly with government and other civic groups to address broader social and economic problems in a hands on way.
Residents who’d stayed on while their neighborhoods crumbled were skeptical until she explained that the plan was to build homes on free land, with tax abatements, and have limited profit for the private sector so they would be affordable to the people living in the neighborhoods.
“You could see the light bulbs clicking in their heads. It was no longer ‘David Rockefeller is going to take over our neighborhood.’ It was, ‘David Rockefeller sees value in our neighborhood, and we’re going to have an opportunity to participate in what’s happening here,’” she said.
“That was a great lesson for me, because out of that crisis, David Rockefeller, who was then symbolically the richest man in the city, was able to go into a very poor neighborhoods and develop an alignment of interests, which I think is really the key to restoring corporate trust.”
There are parallels between the fiscal crisis that nearly bankrupted New York City in the 1970’s and the one currently facing the country, Wylde noted.
“We’re about to go into a real fiscal crisis, one way or another, where things are going to change in very dramatic ways. That may be an opportunity for an acceleration in the restoration of corporate trust, because the business community is who everybody has to look to, whether it’s work force development, whether it’s the education system, whether it’s jobs and the financial tools that government will not have at the state, local or federal level,” she said.
“Globalization and technology have been great for big business, but lousy for most regular people in terms of security and where their lives are going. They have not enjoyed the benefits that big business has enjoyed over the last 30 years, and they resent it.”
Wylde suggested philanthropy should be linked directly to efforts to restore trust. Rather than scatter philanthropic efforts all over the place, firms should consider focusing them in a few big areas where they can have significant impact and be much more strategic in where they devote resources.
“Pointing out that global corporations increasingly are solving the problems of cities and countries, and emphasizing that your philanthropy reinforces those business lines, which I think IBM and other corporations have done very well, is very important,” she said.
Ultimately, Wylde said that partnerships between the private enterprise, government and academia will restore trust. She suggested embracing the notion of competitiveness put forth by Michael E. Porter, Ph.D., the Bishop William Lawrence University Professor at Harvard Business School.
“He says that ‘American competitiveness is the ability of corporations to succeed in the global marketplace while raising the living standards of average Americans,’ and its that last phrase that’s kind of the caveat for how he thinks,” she said.
“Rather than saying we have to get taxes right to be competitive or we have to get the regulatory environment to be competitive, we also have to get right that the workers and the employees are part of the benefit of being a more competitive nation. Not just that they’re better workers and more productive, but that all boats rise.”
Hurley echoed the notion that business has its work cut out for it, and expressed hope that Fordham could be part of the solution.
“There are some clear paths forward: measurement, engagement, agile leadership, transparency, and I think we can actually move the needle on these things,” he said. “It’s not going to happen in the short term, but that’s the kind of work that the consortium wants to do going forward.”