Corporate CEOs talk ethics, leadership at Soderquist anniversary event

by The City Wire staff ([email protected]) 455 views 

It was 15 years ago that Mark Simmons, chairman of Simmons Foods, and two other members of the John Brown University Board of Trustees, first discussed the possibilities of establishing a center for business and ethics leadership with retired Wal-Mart executive Don Soderquist in mind.

Simmons said they took Jo and Don Soderquist to dinner in Tontitown and it wasn’t long before the center became a reality. He said Don didn’t just lend his name to the center, he and the his entire family have been passionate leaders since day one.

Chuck Hyde, CEO of the Soderquist Center, described Don as the drumbeat within the organization setting the pace and rhythm that never wavers.

More than 500 business and academic professionals gathered Thursday night (April 24) to help the Soderquist Center for Leadership and Ethics celebrate its 15th anniversary on the John Brown University campus in Siloam Springs.

Don Soderquist assembled a cast of corporate heavyweights to have an intimate conversation about leadership and ethics as the main event capping off a full day of celebration.

John Pepper, retired CEO of Procter & Gamble (2003); Doug McMillon; CEO of Wal-Mart Stores Inc.; Steve Reinemund, retired CEO and chairman of Pepsico (2006); joined in the discussion with Soderquist who spent nearly two decades in top management at Wal-Mart including board service until 2003.

Soderquist joked that these corporate leaders were chosen after six other people turned him down. He then said the trio of leaders on stage were his top pick, because they each “walked the talk,” and were leaders he personally admired.

When asked to share one lesson they learned in leadership along the way, Pepper said sometimes you have to let the other shoe fall. He said there is no compromising what is right. 

He then shared how during the height of the Toxic Shock Syndrome that P&G had a just launched a new tampon product that quickly garnered 30% of the marketshare. Pepper said even though there was no scientific proof the product was linked to the serious medical disorder, P&G pulled it. 

“The cost of pulling the product was immaterial, given the seriousness of the disorder and the unanswered questions in the public sphere,” Pepper said.

He said one last lesson he learned from his wife of 50 years is that “anything is possible,” a conclusion he reached when she agreed to marry him after three years of proposing.

“Leaders have to develop other leaders,” Reinemund said, which sometimes gets overlooked as there are so many distractions and other tasks for top executives to attend to regularly.

He said one program he ran for five years as CEO of Pepsico was taking a full week to pull out 40 junior executives who spent the entire time offsite in professional and personal planning. 

“We provided them with all the counseling they needed for personal and professional (guidance), and the most widely regarded segment in each of the five years was the training Don (Soderquist) provided in business ethics,” Reinemund said.

Soderquist said he was amazed that a CEO for a multinational company like Pepsico invested so much of his own time with 40 individuals. He said that alone made a huge impression on those junior leaders.

“He even gave them his cell phone number, a point of personal contact, and told them to keep him informed if they saw something wrong.,” Soderquist said of Reinemund.

McMillon was asked to comment on the importance of corporate culture, something he said was ironic because Don Soderquist, also onstage, was tagged as the keeper of the Wal-Mart culture following Sam Walton’s death.

“Culture is like the operating system for an organization. Everything else works because of the culture,” McMillon said. “I tell a lot of stories, something I learned from Don. We work hard to try and keep the culture contemporary but genuine.”

He said learned may years ago how deep the culture ran on his second day of working a summer job as an unloader at a Wal-Mart Store.

“I was paired with this older guy named Johnny … I worked hard to keep up with him all day. When we were clocking out he began to tell me what Wal-Mart meant to him, sharing the culture in his own way. I thought to myself if this company means that much to a truck unloader, they must be pretty special,” McMillon said.

He said his second day as a junior buyer some years later, he was met by Ray Hobbs who told him the cups in the cafeteria were cheap, so take two to keep from burning the hands with hot coffee.

“He also told me if you found something wrong to fix it, to take responsibility for it,” McMillon shared.

“Example is not the main thing, is the only thing,” Pepper said when asked about advice on ethics.

When Pepper was running the International business for P&G he said there was an incident in Africa where the company could not transfer in certain items needed for their operation without paying a bribe to authorities.

“We went on without the items and appealed to the government for five months. There was never a question in the chain of command on the ground about the right thing to do,” Pepper said.

McMillon shared a similar story about former CEO Mike Duke, who was traveling in Russia when the corporate airplane broke down. He said to get the part needed to fix the plane they were asked to pay a bribe. 

“Mike left the plane there and he and his team took a commercial flight out of there. The plane was parked there until finally they (Russians) finally gave up,” McMillon said.

Reinemund said a disgruntled employee at competitor Coca Cola sent new product formulations to PepsiCo when he was CEO. 

“I got a phone call from the CEO of Coca Cola one day thanking me for our actions, of course I had no idea what he was talking about. After some investigation I discovered an administrative assistant got the package, opened it and recognizing what it was, she packed it back up and sent it back to Coca Cola’s general counsel. She had told no one and had not showed the information to anyone else. This employee did what she thought was the right thing on her own. It was a great day for PepsiCo,” he said.

In each of the incidents, Soderquist said the ethics were imbedded into the people reacting.

Soderquist asked McMillon to talk about the delegation of responsibility given the size of Wal-Mart and how he handles that task.

“I believe we have to create an atmosphere that facilitates risk taking. We have to provide a safety net at times when there are failures. Wal-Mart didn’t get to be where it is today without taking some risks. I believe risk taking should be rewarded,” McMillon said.

One caveat to that, according to Reinemund, is that top leaders should set the parameters for the level of risk taking involved. He also said there should never risks taken when it comes to ethics.

“That is especially true today as it is so hard for a company to recover when there has been some ethical miscalculation,” Reinemund, who is also on the board of directors at Wal-Mart Stores.

Pepper recalled one particular risk he took in 1986 when Tom Muccio came into his office asking if P&G could send 28 people to set up a new office in Northwest Arkansas.

“I agree to send 13 or 14 to start with, and he was back in two months to get the other 14. That was a risk we took,” Pepper said.

Soderquist added that by taking the risk, P&G reshaped the supplier/retailer relationship from an adversarial nature to a more collaborative one. 

“Just think about how that one decision has helped transform this region today with the number of suppliers and economic opportunities that exist,” he said.

Each of the respected leaders were asked to boil down in nut shell one thought about leadership advice.

“Do not miss an opportunity to make a bigger difference. Seize the moment,” McMillon said.

“Create a vision for your team to achieve a noble business,” Reinemund said.

“Don’t compartmentalize your life, business, home, church, but let your values be the same because you are just one person,” Soderquist said.

“Do anything that is right, and do it with excellence,” Pepper said.