By Richard Lyons Dean, Haas School of Business
This post originally appeared on the Institute for Business & Social Impact blog
Berkeley-Haas and the Center for Responsible Business lost a close friend two weeks ago, when John C. Whitehead passed away at the age of 92.
To the public, John Whitehead was best known as a legendary former co-chairman of Goldman Sachs, as a tireless philanthropist, and as a Deputy Secretary of State under President Reagan.
But John also became entwined with Berkeley-Haas, thanks in part to his close friendship with another remarkable friend of Haas – Paul Newman, the late, beloved actor and pioneering social entrepreneur.
John provided major financial support for the Center for Responsible Business — the first graduate business program in the United States devoted to the broader role of business in solving social and environmental challenges. Perhaps more important, John provided inspiration to us on what it means for a business – and a business school – to have core values.
John embodied the idea of “Beyond Yourself” even before we embraced that phrase as one Haas’s four defining principles.
It was Paul Newman who initially brought John into the Berkeley-Haas orbit.
The year was 1999, right at the time of the Enron collapse and an epidemic of other major corporate accounting scandals. Paul had been campaigning for years to increase corporate philanthropy, and he had become deeply alarmed by the evidence of sliding business ethics.
Laura D. Tyson, who was Dean of Haas at the time and is now director of the Institute for Business and Social Impact, wanted the school to address the same problem. Liz Robbins, a close associate of both Tyson and Newman, urged them to team up and create what is now the Center for Responsible Business.
Paul readily agreed to contribute $500,000 in seed capital, but there was a twist: he didn’t want the project named after him. Instead, he proposed that we use his money to create the John C. Whitehead Distinguished Fellowship, which would fund the new center’s director.
John was as surprised as anyone about all this — Paul had forgotten to tell him about the Whitehead Fellowship until it was a done deal. But John had helped Paul on the philanthropic front, opening doors to countless C-suites and offering shrewd advice about whom to approach, and John strongly supported a push for greater corporate accountability.
John quickly became an enthusiastic supporter of our efforts. Within a few years, he contributed $300,000 of his own money to the Center for Responsible Business. After Paul Newman died, he convinced Newman’s Own Foundation to contribute yet another round of funding.
But John did much more than give money. At Goldman Sachs in the 1970’s, he had enshrined what became the firm’s 14 principles. John believed that culture was crucial to a firm’s success, and values were the foundation of that culture.
John’s first principle was the most important: “Our clients’ interest comes always comes first. If we serve our clients well, our own success will follow.”
The second: “Our assets are our people, capital and reputation. If any of these is ever diminished, the last is the most difficult to restore. We are dedicated to complying fully with the letter and the spirit of the laws, rules and ethical principles that govern us.”
Note the primary importance that John placed on moral and ethical standards. For him, it wasn’t enough for a business to comply with the literal dictates of the law. A good company should embrace its spirit and purpose as well: integrity, accountability, the broader public purpose.
Given the calamity of the recent financial crisis, it’s tempting to dismiss such declarations as window-dressing. But John was serious, and he enforced his principles long before anybody was talking about a crisis of ethics in American business.
John lived and breathed the principle of “Beyond Yourself.” During World War II, he commanded a landing craft during the invasion of Normandy on D-Day. After the war, when he was at Goldman, he served for years in the Navy Reserves. Over the decades, he gave to countless philanthropic causes and served on innumerable foundations. He spent years on the board of the International Rescue Committee and received its Freedom Award – twice. He was a tireless supporter of public schools, especially New York City’s public schools. After the 9/11 terrorist attacks, when he was fast approaching 80, he chaired the Lower Manhattan Development Corporation to rebuild Ground Zero as well as the foundation in charge of creating a memorial and museum.
I was inspired by John Whitehead’s ideas many years before I met him in person. In 2006, I took a leave from the Berkeley-Haas to join Goldman Sachs as its “Chief Learning Officer.” John had retired almost two decades earlier, but much of my job was to reinforce the culture and the principles that he had established. I immersed myself in John’s own book, as well as several others on Goldman’s unique “culture of success.”
Upon returning to Berkeley-Haas in 2008 as dean of the school, I immediately searched our website for references to “culture” and “core values.” To my dismay, I came up with nothing. Not a word. And this was 2008, just as the financial system was collapsing under the weight of outrageous and reckless behavior from so many quarters of business.
To be sure, Berkeley-Haas has always had a distinct culture of social consciousness and a well-deserved reputation for social responsibility. But these were like passive characteristics of the school, rather than core values that people consciously articulated and actively pursued.
Because John had become such a close friend of Haas, I visited him at least twice a year in New York City after I became dean. He was always personable, always eager to hear what we were doing. I came away from each visit loaded with fresh ideas and a renewed motivation to clarify our own core principles.
On one visit, I told him that we were working on a new mission statement. Given all that had happened during the financial crisis, I said, it seemed to me that we had an obligation to train a different kind of business leader.
John’s blue eyes lit up.
“Don’t be too narrow,’’ he said. This wasn’t just about training a different kind of business leader, he told me. It was about training a new generation of leaders for all purposes – nonprofit institutions, the public sector, you name it.
That was a big idea. We weren’t simply training business executives. We were training leaders. To do that, we needed to identify our own principles and embed them in our culture.
It was what John had done back at Goldman Sachs, and it was what he continued to do as a public servant and a philanthropist. For me as a person, and for Berkeley-Haas as an institution, John Whitehead bestowed a gift of inspiration that will live on as long as we are around.