Tag: Stuart Bunderson

During the presidential campaign, Joe Biden said the idea that corporations only exist to deliver profits to shareholders is “an absolute farce.” Companies also have a responsibility to their workers and the country. Is the debate over “corporate purpose” heading toward a change when Biden takes office?

Taking a stand against a divisive president’s most extreme policies has been an easy way for companies to demonstrate their values. But could the bar for corporate responsibility soon get higher?

We asked Stuart Bunderson, director of WashU Olin’s Bauer Leadership Center and George & Carol Bauer Professor of Organizational Ethics & Governance, and Jackson Nickerson, Frahm Family Professor of Organization & Strategy Emeritus, to weigh in.

Stuart Bunderson

Pressure to adopt a social purpose and to consider the welfare of all stakeholders is influenced more by key opinion leaders in the business community than by who is in the White House, Bunderson said.

“In recent years—years when Trump has been in the White House—we have seen seismic shifts in the conversation around business social responsibility, driven by business community A-listers like the Business Roundtable, Larry Fink/Black Rock and The World Economic Forum,” he said.

“That conversation is what has been driving change, and the trajectory and momentum of that conversation seems unlikely to be affected by who is in the White House.

“In fact, a starting premise within that movement is that business has to step in not because we have morally flawed leaders in government but because government has shown itself incapable of addressing major problems in our society due to partisan gridlock. 

Under this view, business leaders have a responsibility to help solve broader societal problems because if they don’t, nobody will, he said.

“Although it would be great if Biden’s election signaled a new era in bipartisan collaboration on urgent social problems, early signs have not been encouraging. So I wouldn’t expect a change in the White House to lessen the growing conviction that businesses can and should step in where government is failing.”

Business leaders eager to score points will no longer have Trump as a punching bag for a cheap PR win. 

“But most business leaders are savvy enough to know that cheap PR wins are cheap and that a reputation for social responsibility is established not through a leader’s public comments on presidential actions but by developing a track record of socially responsible action.”

Jackson Nickerson

“The federal government has been in a political tit-for-tat stalemate for decades and, as a result, has failed to respond to the fact that the American dream is now unattainable for most Americans. This failure means that the government has not adjusted its policies and come up with a new social contract for America,” Nickerson said.

“Without a new social contract, Americans increasingly appeal to the only wealthy organizations that can tackle policy problems: corporations. The fact that we’re seeing growing appeals to corporations is simply an indicator of increasingly failed politics, which largely is driven by political parties to drive fundraising and control policy.”

The widening economic gap, the climate crisis and healthcare crisis are just some of the political problems that corporations are being asked to solve, Nickerson said.

To maintain legitimacy, it’s in corporations’ best interest to respond to these demands for socially responsible actions. However, corporations have failed to recognize they also have a role—and perhaps even an obligation—to influence Congress to function properly, he said. A properly functioning government is also in business’ best interest.

“Businesses want to know the rules of the game so they can make strategic investments. They are less willing to make these investments if the rules keep changing,” he said. “And, frankly, the irony is if we don’t change the fundraising incentives of the political parties, which drive wedge issues and lead to nationalizing every congressional election, our public policies will continue to vacillate as party control of the federal government keeps switching back and forth.” 

For instance, he said, the party in power provides healthcare, the other party when it comes to power later tries to take healthcare away. One party raises taxes and the other party later lowers taxes.

“Such policy vacillation is not like treading water. Instead, it causes the American dream to sink further for more Americans and reduces corporate America’s willingness to make strategic investments for growth.  With lower economic growth comes further difficulty in creating a new social contract and leads to even greater demands for corporations to increase their expenditures in social responsibility. This downward spiral is a classic vicious circle”

“Once business realizes it has deep economic as well social interests in a well-functioning Congress, they will see opportunities to pressure political parties and influence government to come together and solve real problems for the American public,” Nickerson said.

Until corporate America flexes its muscles and we collectively change the way our political system functions, then demands on firms to engage in corporate social responsibility will only increase—regardless of who is in office, he said.

Sara Savat, senior news director for WashU’s Office of Public Affairs, interviewed Jackson Nickerson for this blog post.

Employees with a higher purpose have more well-being, more happiness and even lower stress from the COVID-19 pandemic, according to findings from a new survey by two WashU Olin professors.

And the effects were more substantial when they had written down their purpose statements.

Also, employees of organizations with higher-purpose statements are happier and prouder of their organizations than are employees at workplaces without such a statement, the results show. Again, the effects were stronger when the purpose statement was written—and tied to society, employees and customers, rather than shareholders.

The findings echo the August 2019 announcement by the powerful corporate lobby group of U.S. leaders called the Business Roundtable, focusing the future on purpose. Such evidence of a national shift dovetails nicely with one of Olin’s key strategic pillars: values-based, data driven decision making.

“As human beings, we are wired for purpose—to know why, to seek meaning in the things we do,” said Stuart Bunderson, director of the Bauer Leadership Center and the George & Carol Bauer Professor of Organizational Ethics & Governance. “When we have clarity on what our purpose is, we are happier and more fulfilled.”

Bunderson and Anjan Thakor surveyed 1,109 people in May to learn about their commitment to and perceived worth of a personal and organizational higher purpose.

Thakor is coauthor of the book The Economics of Higher Purpose: Eight Counterintuitive Steps for Creating a Purpose-Driven Organization, director of Olin’s doctoral programs and the Center for Finance & Accounting Research, and the John E. Simon Professor of Finance.

Conference leads to curiosity

The professors’ curiosity was piqued during a fall 2019 conference they organized on WashU’s campus about personal and organizational higher purpose. Academic researchers, consultants and corporate leaders came together to share findings and experiences.

A presentation by Vic Strecher of the University of Michigan particularly struck Bunderson and Thakor, they write in their report June 2020 report “Personal and Organizational Higher Purpose: Survey Results.”

Strecher noted that workers’ stress levels and dissatisfaction were rising, even as economic conditions were improving. As for the next group entering the workforce, he also mentioned that suicidal ideation had doubled on US college campuses in the past decade. Stretcher stressed the importance of a personal higher purpose in coping with the stresses, noting that someone who does not “repurpose their life” at retirement is 2.4 times more likely to have Alzheimer’s than someone who adopts an authentic higher purpose.

Speaker Bob Chapman, CEO of Barry Wehmiller, emphasized the importance of organizational higher purpose. Some 65% of people would give up a raise if they could fire their own boss, he said. He also noted that an employee’s boss is more critical to that employee’s health than the family doctor.

“These remarks and other discussions at the conference made us curious to know more,” Bunderson and Thakor say in their report on their survey.

“What does personal higher purpose really do for people? How do individuals perceive the value of personal purpose in their lives? What is the role of an organization’s higher purpose in the lives of its employees? Are there any connections between personal and organizational higher purpose?”

Write it down

The 1,019 individuals they surveyed in May were employed and chosen as representative of the American population’s gender, racial and geographic diversity.

“I was most surprised by the fact that when companies have written statements of higher purpose,” Thakor said, “not only do the employees trust its leaders to make socially responsible decisions, but also better business decisions.”

Bunderson said he was “very surprised at how much more powerful these effects are when the purpose statement is written down. It’s like that old saying that a goal you don’t write down is just a wish.”

Additional findings included:

• A majority of respondents had a personal higher purpose, but most had not written it down;
• Having a written personal statement of purpose helped people in various ways, including coping with stress and finding happiness;
• Curiously, those with a written higher purpose also reported higher levels of anxiety;
• The incidence of written statements of higher purpose was higher among organizations than among individuals;
• Employees at organizations with higher purpose statements were prouder of working for their organizations and happier than other employees;
• Organizational higher purpose statements were more effective when written down and when they emphasized society, customers, employees and stakeholders other than shareholders;
• Employees of organizations with higher purpose statements are more likely to have personal statements of higher purpose.

“We aren’t exactly sure why that is the case, but it may be that employees who work for organizations with a higher purpose statement are inspired to develop one for their lives,” Bunderson said. “This may be one way that good work practices can positively impact employees’ personal lives.”

The finding about higher levels of anxiety, he said, is “generally consistent with research suggesting that a sense of duty or stewardship toward something or someone can be both a burden and an important source of meaning.”

Using the survey findings, Bunderson and Thakor have built a personal higher purpose index and an organizational higher purpose index.

“These will enable us to examine how personal and organizational higher purpose and their perceived outcomes change over time,” Bunderson said.

Capitalizing on purpose

Businesses have risen from ruins because of their ability to recognize and capitalize on purpose, Thakor emphasizes in presentations. Those businesses have excelled and grown. But they don’t do it at the expense of making a buck.

Thakor cites a couple of examples of organizational higher purpose in his working paper “Higher Purpose, Incentives and Economic Performance.”

• Detroit-based DTE Energy clarifies its higher purpose as being “a force for growth and prosperity.” The company names four pillars through which its social impact is to manifest: people (“improving lives and creating opportunity”), places (“partners with communities for growth”), planet (“leadership toward cleaner energy and environmental stewardship”) and progress (“powering a brighter tomorrow”).
• Tree T-PEE, based in Arcadia, Florida, offers water-containment systems for agribusiness. It articulates its higher purpose as helping farmers conserve water and energy in farming.

Learn more

To explore more about the concept of a higher purpose, you may want to read these blog posts:

• Elevating higher purpose: Meaning in work from the scholarship of two Olin professors
• A higher purpose as ‘arbiter of all business decisions’
• Creating a purpose-driven organization
• A practical approach to purpose: Anjan Thakor featured in Harvard Business Review

What place does religion play in the workplace? How does it inform us as business leaders? Should religion underpin our notions of values, ethics, and leadership in today’s boardrooms and executive suites?

“If we’re in business, we want to make a buck. We serve our own interests—that’s not going to go away,” said former US Sen. John Danforth, who will serve as a panelist during a February 13 symposium, “The Relevance of Religion for Leadership: How Religious Traditions Can Information Leadership Values and Approaches.”

“But is that all there is to it?” said Danforth, a member of the national advisory board for the Danforth Center on Religion and Politics, which is cosponsoring the symposium. “Religion points us beyond ourselves to purpose and commitment beyond taking care of ourselves.”

The idea for an Olin-run symposium on religion and leadership began with an article in The Wall Street Journal.

The newspaper profiled David Miller, who has taught at Princeton University in both its business and divinity schools, about his three-year tenure as Citigroup’s on-call ethicist “to tackle abstract issues about banking and morality.”

Now the director of Princeton’s Faith & Work Initiative, Miller has also maintained a 20-year friendship with George and Carol Bauer, for whom Olin’s Bauer Leadership Center is named—which is also cosponsoring the event.

From there, Professor Stuart Bunderson, codirector of the leadership center, said it was a short hop to a symposium exploring the intersection of religion and business.

“What an interesting story here,” Bunderson said. “Here’s a banker, he goes back to divinity school, he leads a faith-and-work group at Princeton and becomes an ethicist to one of the biggest organizations in the world. We thought that would be a fun conversation for the business school.”

Miller, who will serve as the keynote speaker and moderator for the symposium, said he consults fairly regularly with large companies—not just Citigroup. “It’s usually because a company has had a series of publicly reported breaches in ethics,” he said. “They step back and decide they have to address these.”

As a former senior executive involved in private equity, mergers and acquisitions, international investments, and corporate finance, he carries business strategy and practical perspective into a corporate environment—along with his master’s of divinity and PhD in ethics from Princeton Theological Seminary.

“Obviously, I don’t come in on a white horse and a big sword and say that I’m the God Guy.”

– David Miller

Miller does, however, help executives develop a framework for making ethical, values-based decisions grounded in religious theory and practice.

Miller says it’s important for business leaders to consider the source of their values, what guides their decision-making. “Different parts of the country have varying degrees of comfort and facility to talk constructively to talk about religion,” he said, acknowledging that some cultures are more comfortable with secular words like “values” and “ethics.”

“Using secular language can be very helpful, it’s safe for everyone,” he said. “But the thing you risk losing is the specificity, recognizing the source of those values.”

Danforth, whose 2015 book The Relevance of Religion served as something of a namesake for the symposium, said our Founding Fathers spoke in terms of “virtue,” which, to them, meant a concern for “the common good and putting that above individual interests.”

“The concept got lost later,” he said. “If you listen to all the discussion about the tax bill, it’s about what’s in it for me. Am I going to get more than the other guy? If we’re going to recover some of that notion, where is that message going to come from? Is it going to come from CNN? From candidates for public office? It’s essentially a religious message.”

Danforth will serve on the symposium panel with Bauer; Dr. Ghazala Hayat, professor of neurology at SLUCare and chair of the public relations committee of the Islamic Foundation of Greater St. Louis; and Bob Chapman, chairman and CEO of Barry-Wehmiller Companies.

For Bunderson, the symposium is an opportunity to shine a light on how values can be informed by religious background. “Religion is part of the diversity we encounter in organizational worlds,” he said. He’ll consider the symposium a success “if people are more mindful of how their own religious background or the religious background of others might influence how they interact and lead or resolve conflict in organizations.”

Miller said he hopes attendees who are not spiritually inclined would come away with a fresh respect for those who are and how it might be a practical resource to people in their lives to be ethical and responsible leaders.

“And for those who are spiritually inclined or active in their spiritual lives, that they might see a fresh connection between what they hear from the pulpit and what they do in their lives Monday through Friday,” he said.

The Relevance of Religion for Leadership: How Religious Traditions Can Inform Leadership Values and Approaches is scheduled from 6:30–8:00 p.m., February 13, in Olin’s Emerson Auditorium.

One of the most-explored and desired processes of today’s global business marketplace is innovation.  In this highly digitized age, where entrepreneurship and start-up ideas are encouraged and often fostered, traditional organizational hierarchies can be brushed to the side.  The power of a game-changing idea has the ability to transcend this traditional structure, leaving room for equal places of contribution to the table.

The most recent broadcast of the Executive MBA program’s “Live from Olin Business School” webinar series challenged the common notion that a leader should not be involved in the innovation process.  Stuart Bunderson, Associate Dean & Director of Executive Programs, the George & Carol Bauer Professor of Organizational Ethics & Governance and Co-Director of the Bauer Leadership Center, presented the webinar.  In “Leading Innovation without Getting in the Way,” Bunderson broke down just why innovation does not work effectively without the involvement of a strong leader.

By citing the famous example of the 1999 IDEO shopping cart video, in which an IDEO team redesigned the standard shopping cart in just five days, Bunderson showed how innovation is a process buffeted by the contribution of members from each level of a hierarchical system. IDEO, a Palo-Alto, California based invention company, had not formally defined hierarchy of its shopping cart team. Team members were encouraged to contribute ideas equally in the short five-day due date.

Buoyed by this timeline, key members of the team did help drive the process forward, each with a specific role to play. Narrowing down the best idea meant that contributions from the group facilitator, company founder and more experienced members led the team to a revolutionary approach to the shopping cart.

Bunderson emphasized that a social hierarchy helps innovation. Hierarchy is a natural occurrence because of differences in expertise, education, and other characteristics within groups of people. It contributes to the function of groups, most particularly where there is a problem that needs to be solved in a specific amount of time, such as the IDEO shopping cart proposal. These types of “problem parameters” encourage creativity, because time and resource restraints often can produce the most skilled outputs from group members.

Because of this organizational behavior, leadership develops. Leaders become moderators of sorts, making sure that voices are heard and the ideas of team members are not drowned out. This is not for the leader’s professional benefit, but for the guidance of the team and its product output. If there are disagreements, a group can be sidetracked from its goal and its organizational structure. A leader, produced from a social hierarchical system, will settle these disagreements and achieve coordination. In other words, keeping the eyes on the prize – a group or organization requires leadership to encourage direction over conflict, move things forward and foster innovation.

The ancient quote from Lao Tzu, from the Tao Te Ching, best sums up what Bunderson conveyed in his research findings:

“A leader is best when people barely know he [or she] exists, when his [or her] work is done, his [or her] aim fulfilled, they will say: we did it ourselves.”

Please visit www.olin.wustl.edu/EMBAevents to register for the next “Live from Olin Business School” event and to learn more about the Executive MBA program.