I once had the opportunity to see Norman Schwarzkopf speak in person. It was a powerful experience, occurring shortly after the four-star general had retired from the United States Army. Having successfully led Operation Desert Storm, the U.S. military effort to liberate Kuwait following an invasion by Iraq in 1990, Schwarzkopf detailed the dilemma leaders often face — doing what is right. The late general was of the opinion that people always know the right thing to do; the hard part was actually doing it. Schwarzkopf said, “Do what is right, not what you think the high headquarters wants or what you think will make you look good.” A very accomplished leader, his principle sounds as if it would be so easy to follow. Yet every day we see countless examples of supposed leaders failing to follow that which seems most basic. Consider the recent case of Volkswagen (VW), the automaker that deliberately set out to design a means to circumvent emissions control standards.
Dating back to 2009, VW installed a “defeat device” on nearly 500,000 vehicles, allowing them to successfully cheat U.S. emissions tests. The strategy was known at the highest levels within the company and provided VW with a significant, albeit unfair, advantage over its competitors trying to play by the rules of regulation. VW’s rejection of ethical engineering standards most likely played a major role in vaulting the company past Toyota as the world’s largest automaker this past summer.
One day after acknowledging the emission test scandal at VW, CEO Martin Winterkorn announced he was resigning. “I am shocked by the events of the past few days,” the executive said in a released statement. “Above all, I am stunned that misconduct on such a scale was possible in the Volkswagen Group.” Although the former CEO accepted responsibility for the scandal, he did so asserting that he was, “Not aware of any wrongdoing on my part.” From my perspective, Winterkorn should have heeded some of Schwarzkopf’s other advice: “When placed in command, take charge.” In other words, don’t pass the buck.
In our industry, this concept of “doing what is right” in business was the crux of a recent controversial issue involving BIO and Turing Pharmaceuticals.
Shortly after Turing acquired Darapim, a treatment for toxoplasmosis, with the full support of its CEO, Martin Shkreli, the company increased the price of the drug by more than 5,000 percent! While the move resulted in a media firestorm causing the company to quickly backpedal, one organization and one leader did not. In an unprecedented move, BIO, the world’s largest biotech trade association, kicked Turing out and returned the company’s membership dues. The move was spearheaded by BIO chairman, Ron Cohen. And, as you may expect, some in today’s mainstream media took issue with BIO and Cohen’s application of Schwarzkopf’s principles, implying that these actions were a mere “tossing of Turing under the proverbial bus.” In other words, the decision by BIO to not only do the right thing, but actually do it, just wasn’t good enough.
When it comes to the proper practice of corporate social responsibility in our industry, does it feel to you that no matter how hard we try, we please very few of the people, very little of the time? If so, don’t you think it is time we do the right thing, and start doing something about it?