Ethics at the Heart of Successful Business

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This discussion of ethics at the heart of business success is from a keynote session at NAVEX Next, an annual virtual conference for risk and compliance professionals. The session, Ethics at the Heart of Successful Business, features Jerry Greenfield of Ben & Jerry’s ice cream, and Carrie Penman, NAVEX Global’s Chief Risk and Compliance Officer.

"The real power of the business was not in how much money we could give away because there would never be enough."

Carrie Penman: I am pleased and so honored to have the opportunity to speak with our keynote speaker today, someone whose name is part of a very recognizable brand – Jerry Greenfield of Ben & Jerry's ice cream.

Jerry and his long-time friend and business partner, Ben Cohen, are the men behind one of the most talked-about and least conventional success stories in American business. Together they helped build a storefront venture into an ice cream and business phenomenon by making social responsibility and creative management techniques one of their strengths - rather than a weakness.


Watch: Get Jerry’s full session on demand!


Jerry Greenfield: Thank you so much for having me. Ben and I are old friends. We met as 13-year-old kids. We grew up in Long Island. We met in seventh grade in gym class, running around the track where we were the two slowest fattest kids in the class.

That was how Ben and I first got to know each other. We went through junior high school and high school. I went to college. I was pre-med. I applied to medical school and was rejected for medical school. Ben went to about three colleges - dropped out of all of them. The last one he went to was this very progressive college program called University Without Walls. At University Without Walls, you don't have to go to class because the world is your campus and you don't have to take tests. You get credit for learning. And then dropped out of there too, which is virtually impossible to do. Still too much structure for Ben.

So, we were pretty much failing in everything we were trying to do. We thought, why don't we try to get together, do something fun, be our own bosses. And since we'd always liked to eat, we thought we would do something with food ... and we just picked homemade ice cream. Didn't know anything about it. eWe learned how to make ice cream from a $5 correspondence course from Penn State University. We were really broke, so we split one course between us. It was $2.50 a piece. We got A's on all our open-book tests and we figured we were ready to make ice cream.

So we moved up to Burlington, Vermont, rented an old abandoned gas station and on an investment of $12,000, 4,000 of which was borrowed. We opened up in May of 1978. We were making ice cream in a five-gallon, rock salt and ice cream freezer, which is kind of a home ice cream maker. Everything was great in the summer, but it turns out winters in Vermont are really cold and it's not that conducive to an ice cream shop. So we started selling ice cream to some of the local restaurants. That helped a little. Then we started packaging ice cream into pint containers to sell to some of the local mom-and-pop grocery stores. And that's really what allowed Ben & Jerry's to keep growing.


Read: Instilling Trust in Times of Uncertainty


We started selling to some supermarkets in the area. We went to a couple of new markets. We went to Boston. We went to Connecticut. And things were going well. And Ben and I woke up one day and we said, "Boy, what's going on here? We're not ice cream guys anymore. We're becoming businessmen."

We're not spending our time making ice cream and scooping it over the counter to our customers. We're spending our time hiring people and firing people and writing memos and correspondence and talking to lawyers and accountants. And it wasn't exactly our idea of a good time.

Plus, we had grown up in the 1960s, which most people here don't remember. But for those of us, you have peace, love, hippies, take care of your neighbor, we'll all in this together. That was Ben and me. We had this really negative view of business. And we felt our business was just becoming another cog in the economic machine. And we didn't want any part of that. We decided to get out of it. And at that point, Ben ran into this friend of his, Maurice Purpura, who was this somewhat older, somewhat eccentric restaurant tour from Southern Vermont.

We had this really negative view of business. And we felt our business was just becoming another cog in the economic machine. And we didn't want any part of that.

And Ben was telling, "We're going to get out of the business." Maurice said, "Ben, how can you do that? The business is your baby. It's just starting to take off." And Ben said, "But Maurice, you know what business does, it takes advantage of its employees. It spoils the environment. It exploits the community." Maurice said, "Well, Ben, if there's something you don't like about the way business is done, why don't you just change it." And as Ben says, that had never really occurred to him before. So at that point, we decided to stay with the business and see if we could make it something that we were really proud of, something that was supportive of the community, supportive of employees.

And that kind of took us off on a journey that the company's been on ever since. In 1988, the company wrote a mission statement that included a three-part mission, not just an economic mission and a product mission, but also a social mission. We started a foundation as the charitable arm of the company. At the time we set up this foundation that was going to get funded with 7.5% of the company's pretax profits, the highest percentage of any publicly held company.

And the reason we picked such a high percentage was that our feeling at the time was that a business is essentially a machine for making money; if we want it to be as if much benefit to the community as possible, we should give away as much money as possible. So we set up the foundation. The company started funding the foundation. The foundation started funding grants. And in no time at all, the foundation was overwhelmed with grant requests from nonprofit organizations doing incredibly worthwhile things.

We realized that all the foundations in the country were in the same situation. That there are these tremendous unmet human needs and not nearly enough money to go around. And we started to wonder if there was more that business could do.

And as we thought about it, we realized that the real power of the business was not in how much money we could give away because there would never be enough and giving away money is great. It's a wonderful thing to do and a necessary thing to do.

But the real power of the business is in how we conducted our normal day to day operations, how we sourced ingredients, how we came up with flavors, how we did our marketing, all of those things. And so that has been the journey of the company to figure out how to integrate those social and environmental concerns into the business.

And along the way, I think what we've really discovered is that the most powerful tool that we have as a business is our voice. When businesses talk, people listen, consumers listen, politicians listen, all the businesses listen.

The most powerful tool that we have as a business is our voice. When businesses talk, people listen, consumers listen, politicians listen, all the businesses listen.

And so over the years, Ben & Jerry's has been engaged in a lot of social and environmental issues using its voice, coming out with flavors, whether it's racial justice issues, marriage equality. So that's kind of what we're engaged in. It's been an amazing journey.

Carrie Penman: Has been an amazing journey. And I believe I read that the other choice was bagels. Is that right?

Jerry Greenfield: Yeah, we were thinking about bagels. We actually priced bagel-making equipment before we started out. And it turns out that bagel-making equipment was more money than we had. So we figured ice cream had to be cheaper. And so we just paid for the ice cream. Could have been either one.

A Three-Part Mission at the Core

Carrie Penman: You mentioned your three-part mission statement. Tell us a little bit more about that. What was included in that and how did you roll it out and embody it?

Jerry Greenfield: It included not just a product mission, not just an economic mission, but a social mission. What's unusual about it is that the social mission is equally important and interdependent with those other two parts of the mission. If you go back to the annual reports for Ben & Jerry's, going back to 1989, you'll see that there's a social report in the annual report right next to the financial report.

Living up to Company Values

Carrie Penman: You were telling us a story on our prep call about the Peace Pop, can you fill the audience in about the piece pop?

Jerry Greenfield: Ben & Jerry's was about to produce a chocolate-covered ice cream bar on a stick - which is sort of a typical ice cream novelty. And this was during the Cold War. The United States and the former Soviet Union were in this huge military buildup. Everybody was building more and more weapons and more and more bombs. Ben suggested calling this product a Peace Pop and use the packaging, not to talk about what an incredibly delicious flavor this was, but to talk about an issue: That real security comes from not building more weapons, but getting to know people in other countries and understand that we have much more in common than we do different.

So he proposed this to the company, and it met with incredible resistance.

There were people who felt it wasn't appropriate for a business to be making a statement about a government program, in this case, the defense department. There was concern we were going to be seen as unpatriotic. That consumers wouldn't like it. Distributors wouldn't carry the product. Supermarkets wouldn't carry the product.

And within all this conflict, Ben essentially shoved it down the company's throat. He said, "Look, we're going to do this. This is a value that the company is based on. We have to live up to our values."


Read: Meeting Society’s Expectations for Corporate Social Responsibility


So we came out with the product. None of those horrible things happened. Even people who didn't necessarily agree with the stand that the company was taking perspective on the idea that a business was talking about an issue that was not in its own financial self-interest. That it was talking about an issue that was in the common good.

And, as Ben would be quick to tell you, the Cold War ended very soon thereafter and he's willing to take credit for it!

Carrie Penman: It’s a good point that you make, because not everybody agrees with all the positions perhaps you were taking. And as the company grew, I'm sure that you didn't have 100% of your employees on board with every cause that you were supporting.

How did you manage that and how did you work through that with the employees?

Jerry Greenfield: So it was true years ago, and it's still true today. Ben & Jerry's has people working all around the world. Ben & Jerry's is part of Unilever now. It got bought in, I think, 2000 or 2001. And I think the people who work at Ben & Jerry's are somewhat of a cross-section of people. And so not everybody agrees with things the company does, and it is difficult.

What we try to explain to people is that the company is based on values and that not everybody in the company needs to believe in those values.

It doesn't work to have people at the company who as part of their job are not trying to support the social mission.

But when you're working at the company as part of your job, you need to be supportive of what the mission is. And in the same way, we wouldn't have somebody who was not supporting the economic mission and trying to make money for the company. And then the same way, we wouldn't have people who are not trying to support the product mission to make the best ice cream they could. It doesn't work to have people at the company who as part of their job are not trying to support the social mission.

Carrie Penman: It seems you had a lot of respect for the fact that you were standing by and doing what you believed in regardless of what the impact might have been to your organization.

Jerry Greenfield: I think those are healthy struggles. Things are not always supposed to be easy, and not everybody is supposed to agree. If businesses don't have a purpose, I think it makes it pretty tough. And I think it's up to leadership in the company to be really out front and be demonstrating what those values are.

I know for Ben & Jerry's, it certainly helps if people who are working at the company know what the values are and personally support those values. As I mentioned earlier, you don't have to. But it's certainly a lot more motivating to have people at a company who are trying to achieve what the company is trying to achieve. If you're working at cross purposes or rather if your values are at cross purposes with what the company is trying to do, it's very demotivating. It's a pretty tough position to be in.

Silence Is NOT an Option

Carrie Penman: Were you ever worried about how customers would react to the various social justice stances that you took? How did you manage the potential negative impact?

Jerry Greenfield: We knew that not all of our customers and not the general populace were going to agree with Ben & Jerry's. Ben & Jerry's started working on racial justice issues years ago. The company came out in public support of Black Lives Matter in 2016, when it was not a very popular thing to do. There was a lot of pushback from customers and non-customers. And now more recently with the killing of George Floyd and all the activity around racial justice issues now, Ben & Jerry's came out with a very clear statement, Silence Is NOT An Option.

The statement talked about a culture of white supremacy in our country. And I think talking about race is a particularly difficult thing for many people to do. And talking about our country as having a culture of white supremacy is something that a lot of people don't want to talk about or hear about or even think about.


Read: Creating Sustainable Diversity, Equality and Inclusion (DEI) Programs


And yet, Ben & Jerry's felt, looking at the history of our company, that we needed to be willing to talk about it. And there was certainly a lot of pushback on that as well. You hear people saying, they're going to boycott your product. They're not gonna support you anymore.

Ben & Jerry's, when we hear somebody say they're going to boycott our product, it’s more than likely they're not purchasing the product in the first place. But it's still very difficult to feel you're disappointing people or angering people. I will say that the company tries to do what it thinks is right. We come out with what some people might feel are controversial statements.

And yet, over the years, the company continues to be more and more successful. There's something to be said for being genuine and honest, and having integrity about what your values are, no matter what those values are.


Learn: 3 Steps to Create a "Listen-Up" Culture of Accountability


Carrie Penman: Absolutely, and I think you mentioned earlier that Ben said, "You won't get 100% of the market share anyway." So customers don't agree, but they do still respect you.

Jerry Greenfield: Yeah, Ben always used to joke. He'd say, "Look at somebody like Coke and Pepsi. I mean, they're happy if they're in the 40s or 30s [percent market share]." I have no idea what their market share is. But even the biggest companies, you're never going to get 100% market share. It's much more important to connect with your customers on a genuine level.

That it's not about a cute marketing campaign that's really humorous or has attractive men or women or whoever living a wonderful lifestyle. When you connect with people over shared values, those are the strongest bonds that you can make between people.

Baking Ethics into the Supply Chain

Carrie Penman: One of the issues that many folks in this audience focus on daily is ensuring that suppliers and other third parties don't damage the reputation of the organization.

Tell us a story about choosing suppliers that meet your social philosophy.

Jerry Greenfield: Ben ran into the founder of a bakery in New York, which is run by a religious organization, and their work is to provide services for people who are out of the economic mainstream, provide jobs for people that have had substance abuse issues, housing issues, legal issues.

We asked, "Boy, I wonder if this bakery makes any baked goods that we could put into ice cream." And we discovered they made some really good brownies. So Ben said, "Let's come up with a flavor that uses these brownies."

So the creation of the flavor came from actually wanting to work with this bakery ... as opposed to saying, "Hey, we've got a flavor. Let's find somebody decent who does it."

It's sort of a cliche, but it's a win-win. For the Greyston Bakery, the more brownies they're able to make and sell, the more people they can hire. For Ben & Jerry's, we can get brownies from them for the same price as anyone else. And simply having them as a supplier allows us to support the work they do.

Ben & Jerry's now makes ... I don't know how many flavors using these brownies. There's Chocolate Fudge Brownie ice cream. There's Chocolate Fudge Brownie Frozen Yogurt. There's Half Baked, which has 1/2 Chocolate Fudge Brownie, 1/2 Chocolate Chip Cookie Dough. I mean, the brownies are probably in six or so flavors. It's incredible and they're all delicious.


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Company Culture: The Main Ingredient in an Ethical Organization

Carrie Penman: So what were some of the things that you did internally to keep that level of motivation and great quality of product going out the door?

Jerry Greenfield: I think building a company culture is really important. And once again, there are a lot of different kinds of company cultures that work. For Ben & Jerry's, we started off as a very small company. We called the company Ben & Jerry's because there was a Ben, there was a Jerry, and we essentially wanted to let customers know that we were the guys making the ice cream and we were standing behind it.

But at the same time, everybody working in the company knew there was a real Ben and a real Jerry. And that we were putting our names on it and we wanted the company to work and we wanted people within the company to be happy.

In terms of the company culture, it turned out to be a very family-style company.

Ben and I were not very good bosses. We always saw ourselves as more working guys. I think part of the element that Ben brought to the company, Ben is extremely anti-authoritarian. I sort of mentioned that early on dropping out of University Without Walls and he's totally unstructured. He can't stand to do the same thing more than once. And he can't stand to be told what to do.

And when you have a guy like that at the top of the organization, demonstrating anti-authoritarianism and irreverence and a rule-breaking, it's got its benefits ... but it also has its challenges. But it challenges people to be free-thinkers, thinking on their own and not just do things in a conventional way. And I think that has really benefited Ben & Jerry's over the years.

Building Cone-sensus Around Values in an Organization

Carrie Penman: As you pointed out, not everybody has the same style in terms of management. One of the things that our audience has to deal with is the fact that they're working with executives across the organization who have different leadership styles, who have probably slightly different priorities

What advice do you have for the executives who are listening in terms of kind of building that kind of consensus around different priorities that the organization may have?

Jerry Greenfield: Well, it's certainly very important to listen to people - to genuinely listen and take it all.

But at some point, a decision needs to be made that not everybody is going to agree with. But people have to feel they've been heard and that their voice matters. There needs to be a sense of integrity and honesty. It doesn't help to talk around issues.

One thing we keep talking about is that not everybody is always going to agree with you. But they need to feel there's integrity in where you're coming from. There's a real importance for companies to be ethical and socially responsible.

On the one hand, being ethical means following the law - and that's the lowest threshold. And you're not going to get people excited if all you're doing is meeting the regulations of the law because you're not going the extra mile.


Watch: Watch the full session Ethics at the Heart of Successful Business


One thing I try to let people understand is the power of business in our country. Business is really the most powerful force that we have, ranging from influence on elections, to campaign contributions.

Business pretty much controls legislation through lobbying. Of the 100 organizations that spend the most on lobbying, 95 of those represent business.

Business controls all of mainstream media through ownership and to a great degree, it influences how we're all treated both as employees and as customers.

And so with all this power, business has a huge impact on what our country looks like. Business can either be just meeting the standard, being a decent neighbor and a good citizen, or it can be trying to be reparative of our country. We have a lot of issues, and business can't afford to just sit by and say, "Someone else's going to figure these things out and take care of it."

Incorporating ESG in Business

Carrie Penman: Ben & Jerry's was far ahead of its time in having conversations about environment, social and corporate governance (ESG), which many of our folks are also now having a conversation about. Investment firms are also evaluating their positions and their actions when it comes to environment, social and governance issues.

Do you have any thoughts or comments about how organizations can take this and run with it, and demonstrate, as you did, that you can be incredibly successful thinking about these issues and talking about these issues?

Jerry Greenfield: ESG is not just a box to be checked. It's something that's motivating to your staff. It's something that's motivating to the general public. It's motivating to employees. It's a benefit to the business to be doing these things.

I think one of the fallacies is oftentimes businesses look at environmental issues or social issues as a cost to the business that is going to make them less financially successful.

And all I can say is that in my experience, it is not that way at all. It's one of these spiritual laws, as you help others, you are helped in return. The good that you do, comes back to you. I don't know that you can prove it anywhere, but that's just the way life works. And it's true for business, the same way it's true for individuals. Just because it's not written in a business textbook, doesn't mean that it's any less valid.

Carrie Penman: Yeah, it's interesting because, for a lot of folks their leadership team sees them as a cost center, instead of a team that's kind of driving the values and the ethics of the organization.

Jerry Greenfield: Yeah, one of the difficult things is business is really good at measuring things. They like to set goals to measure it and so business is great at.

But the fact of the matter is, not everything that's important can be measured. It's just kind of the nature of life. The most important things in life, love and hope and whatever, are things that can't be measured. It's unfortunate that within the business setting, setting up a wonderful culture can't really be measured - or motivating people, it's really tough to measure. You can measure your cost of goods, you can measure your margins, you can measure your efficiency and your waste, but there are so many critical issues that cannot be measured.


Read: The ESG Imperative


Carrie Penman: Yeah. As you noted earlier, Ben & Jerry's was purchased by Unilever. I'm sure many in the audience want to know kind of how that went and was there a culture change and how did you all handle that change and to still keep the mission?

Jerry Greenfield: That was a really tough time. Ben & Jerry's at the time was a public company, which meant that anybody could purchase shares. And Ben and I wanted to keep the company independent, not because of anything about Unilever, but we just were not confident that any company that would acquire Ben & Jerry's would be passionate about the social mission.

But as I said, being public meant that anybody could purchase shares. Unilever bought the company. Ben and I have continued to work at the company since then, but we're not involved in the management or operations, and have no responsibility and also no authority. I suggest everybody try that for a while.

So in the beginning, I'd say it was really tough.

Unilever didn't really understand the social mission of the company. Didn't value it. They had a big ice cream business and I think a lot of their effort went into integrating Ben & Jerry's into the larger Unilever universe. And quite honestly, the social mission floundered and motivation of the company floundered. But maybe eight years ago, Unilever installed a CEO of Ben & Jerry's who is great. He understood the values and the mission of the company. He re-energized it. Some people would say he re-radicalized Ben & Jerry's.

And to be fair, Unilever is not the same company now that it was 20 years ago when Ben & Jerry's first was purchased. Unilever has had a great CEO who retired a couple of years ago. Paul Polman, who was a real leader in the sustainability field. Ben and I are actually kind of amazed at some of the stands that the company continues to take, even when we have no involvement in that.


Learn: Watch Jerry’s full session on demand!


What’s in a Name?

Carrie Penman: Chocolate Chip Cookie Dough is the only ice cream I will spend my calories on! I love Chocolate Chip Cookie Dough. So just tell us a little bit about what goes into a creative new flavor. How did they come about? How did you come up with the ideas and some of the phenomenal names?

Some of the best flavors of Ben & Jerry's were suggestions from customers. Cherry Garcia, Ben & Jerry's received an anonymous postcard years ago from a couple people that said, "Hi, we're big Ben & Jerry's fans. We're also big Grateful Dead fans. And we think you ought to make a flavor called Cherry Garcia, named after Jerry Garcia of the band. It would be a real hoot for the fans … plus Grateful Dead paraphernalia always sells."

Carrie Penman: Did you have to go to Jerry to use the name?

Jerry Greenfield: We talked to people in Jerry's circle: Should we go to him or not? And they all came back and said, no, you should just go ahead and do it. If you get lawyers involved, it's going to be bad.

So we made the flavor and we overnighted it to Jerry Garcia for him to try. We heard back from his wife because Jerry was in a diabetic coma at the time. But she really liked it.

And then a little while later, we did hear from Jerry Garcia's lawyer who said, "You really should have asked us about that. It's an implied endorsement." And we said, "For us, it's just a pure tribute and we'll do anything you want us to do."

Who wants to be in some kind of argument with the Grateful Dead? So the company pays a royalty to, I guess what is now Jerry Garcia's estate. And I think it's really the only money in Jerry Garcia's estate these days, his money from Cherry Garcia.

Carrie Penman: All right, Cherry Garcia. Wow. As we start to run out of time here, I would love to hear any other advice that you have for our audience on keeping up the good work that we do, not getting bogged down.

What advice do you have for this audience today to kind of keep focused on our mission and not lose sight of that with everything else that's going on?

Jerry Greenfield: It's a great question because the way you framed it, not getting bogged down. It's really tough not to get bogged down. There's so much day to day stuff. There's so much coming at you that it's hard to keep the big picture in mind all the time.

I think you have to force yourself to do it. People talk about being able to sleep well at night and you want to be doing things that you know are the right things that allow you to sleep well at night. I have conversations with some of my friends. We're getting on the older end of things now.

I'm 69 years old. My friends are all like this. And the things we talk about are making decisions or being involved in things where we don't have regrets. When we look back at it, we say, "We knew you did the right thing."

You can't always control how things turn out. In fact, you can never control how things turn out. But if you're doing what you think is right, it's the best you can do and you won't have any regrets.

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