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September 1, 2011

Leaving a Legacy

“The quality of a leader is reflected in the standards they set for themselves.”

 

 

In the heat of the recession, as many companies cut back, some questioned whether newer so-called “social responsibility” initiatives would be among the first to go. Confronted with the choice of must-have vs. nice-to-have, companies might choose the former and ruthlessly eliminate the latter. Industry was, yet again, criticized for caring only about the almighty profit motive.

But for many companies, the two—profit and social responsibility—are part of one whole. They not only peacefully coexist but are part of the entrepreneurial spirit that built this continent.

I was reminded of this on a recent trip to Hershey, Pennsylvania. We all know and love the candy bars, but if you look more closely at Milton S. Hershey, at what he built, his legacy of success and good works, you will see the best of free enterprise. Free as in self-governing, succeeding by its own wits and determination, and doing good because it is right, not because legislation forces it.

Milton Hershey apprenticed to a candy maker. He made some entrepreneurial mistakes but, in the early 20th century, he founded the Hershey Chocolate Company on 1,200 acres in the dairy country of Lancaster County. He had access to raw materials—fresh milk—and room to build both a factory and a town.

Hershey, Pennsylvania, was planned as a vibrant community with tree-lined streets, brick houses, good mass transit and quality public schools. Hershey even put in an amusement park and a swimming pool—and all of this in 1907. “Developing the community became a lifelong passion for him,” says his entry in Images of America. He “believed that providing better living conditions for their workers resulted in better workers.”

Two years later, he and his wife established the Hershey Industrial School for orphaned boys. Without heirs, Hershey left the entire company, now including the Hershey Entertainment and Resorts Company, to the school. Today, there are 1,800 students, boys and girls, on 2,640 acres, and the Milton Hershey School is the richest private school in the country with more than $6 billion in assets.

The company, the town, the school, all thriving a century later and all the work of one man. No one told Milton Hershey to do that. Being socially responsible was not a nice-to-have for him. It was good business.

There was a time when circumstances demanded the creation of such government entities as the Environmental Protection Agency, the Occupational Safety and Health Administration and the National Labor Relations Board, when workers needed protection of their rights through organized labor. And in every barrel, there will be some bad apples that need policing. But government doesn't give business enough credit. We have evolved as society has evolved. We live in our communities. We have no interest in seeing them polluted or unsafe. We know that workers who are fairly compensated, treated with respect and given a chance to advance are happier and more productive. This is not a profit motive. Call it enlightened self-interest. Better yet, call it social responsibility, for that is what it is. We, as business leaders, have a responsibility to society, a responsibility we take seriously, a responsibility we fulfill not at the expense of profits but as part of the way we profit. It becomes part of our legacy, a legacy that lives long after we hand off the leadership reins.

As I look at the avalanche of regulation that is about to hit business, regulation that will impact costs and stifle job creation, I wonder whether political leaders and regulatory bodies ever put themselves in our shoes. Do they give us enough credit for knowing what is right and having the courage of those convictions so that we act accordingly?

We do not need to be forced to do the right thing. We know what is right and, like Milton Hershey, we can make society better just by being who we are.