‘Business is a privilege’

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Research has long supported the argument that doing good is not the opposite of doing good. The story of sage but humble timber merchant George Weierheuser offers real-world evidence—and lessons for CEOs and their boards in navigating their social mission. Sadly, George passed away last June at the age of 95, but his legacy lives on through the wise words he shared with me 45 years ago.

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At a time when many lumber companies were clearing forests, building barren farms and destroying animal habitats, Weierheuser adopted selective harvesting to conserve land and protect forest wildlife. He was known to leave stands of trees along the banks of the river to prevent soil erosion.

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While other companies used the notoriously toxic 2,4,5-T herbicide, Weyerhaeuser acknowledged its dangers and abandoned its use before the EPA banned it. He also immediately supported the federal government’s 1968 creation of Redwood National Park to protect the 800- to 1,500-year-old Sierra Redwoods—the oldest living things in existence. An advocate of sustainable forest management, Weierheuser’s tagline was “tree-growing company”, at a time when its biggest competitors were being attacked as “rapists of the land”.

A Trip to Tacoma

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I went to Tacoma to meet with Weerheuser for insight on the 1976 scandal in his own industry. After a series of successful antitrust indictments by forest product companies for price-fixing in consumer papers, multiwall bags, corrugated containers and shopping bags, 47 executives from 22 firms were convicted of price-fixing, most of whom were was sent to jail. I interviewed 40 of them when they were released, but they also spoke with their mentors—who, like Wareheuser, were very disappointed. As one CEO complained, “either these guilty executives are idiots or they don’t listen to our legal warnings.”

Georg Weierhauser had not seen such a problem. We met at Vineet’s company headquarters which he had opened in 1971 inside a forest. The pioneering design allowed natural light to flow in and displayed expansive views of the trees in the forest. He greeted me in a sport coat, slacks, and hiking boots—a departure from the pinstripes and gray suits of the era. Then, as we walked through the woods, he shared his corporate conduct philosophy.

Weirheuser’s Way

First, he advised: “Our business is a privilege given by society. We have license to work from society. If we violate the intended terms of that contract, it can be voided by society.” This was a counterpoint to a recently published editorial by economist Milton Friedman that the social responsibility of business is to increase its profits.

Second, he said, “As managers of some of the country’s forests, we think in 20-year increments, given the time to grow the trees, and not be distracted by daily market fluctuations.” Thus, the time-frame of day traders and shareholder activists did not overpower their mindset.

Third, he thought he might set a personal model of honesty and responsibility from above, noting, “My name is on every product, and I try to model my standards.” But over time he recognized the need for formal processes to strengthen the character of the firm as it was diverse. “We bought into paper-converting businesses that had a scrappier, transactional, often nontraditional character and were naive about the subculture that followed acquisitions,” he explained.

Fourth, the Weirhauser Company, along with Du-Pont and GE, was one of the first companies to establish its own Washington Government Relations Office in the 1970s, which had lost confidence in the effectiveness of trade unions that sometimes value misconduct such as Used to provide the facility of – fixing.

Early life experience probably contributed to George’s strength of character. In 1935, at the age of eight, George was kidnapped and held for ransom, chained and buried in a pit. Caught and jailed for decades, one of his kidnappers expressed remorse. When he was released, George got him a job as a truck driver in the company. George explained, “I’d be hard pressed to call him a close friend, but I like him.” “And I think the opposite. He occasionally sends me a card.”

George Weierhauser was not a “Voc CEO” but a leader who showed us a mix of character, culture and courage. Or in other words, actual working wood.

The post ‘Business is a Privilege’ first appeared on chief executive.net.

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