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I think we can all agree that creating a culture of integrity in our workplaces in important. We want to be able to trust the people we work for and work with. We want to know that the company we are representing as an employee or as an owner is one that people can trust; that the brand has a certain amount of ethics behind it. That doesn’t just have to be regarding just manufacturing, but the fact that a company strives to have integrity on the whole. My guest today is creating and leading a revolution of ethical companies that hold integrity as a top priority. Rob Chesnut if the former Chief Ethics Officer for Air B&B, and the author of the new book, Intentional Integrity: How Smart Companies Can Lead An Ethical Revolution. Rob is a graduate of Harvard Law School and The University of Virginia. He worked for 14 years with the US Justice Department, where he prosecuted bank robberies, kidnapping, murder, and espionage cases. He joined eBay in 1999 as the company’s third lawyer where he led eBay’s North American legal team and later founded its Trust and Safety Team. Rob subsequently spent six years as the general counsel and first attorney and digital education leader, Chegg, where he helped take the company public in 2013. He joined Air B&B as general counsel in 2016, where he grew the legal team from 30 to over 150 legal professionals in 20 offices around the world. His team led initiatives to promote home sharing and address regulatory issues with local governments and landlords around the world. As Chief Ethics Officer, Rob developed a popular interactive employee program, Integrity Belongs Here, to help drive ethics throughout the company. He lives in San Francisco, and his website is intentionalintegrity.com. I will tell you that this was a fansicnating conversation. Rob has so much experience and knowledge and is the type of person I’d love to sit down with for dinner and ask 7 million questions. I asked him about half of those here today. 😉 You are going to absolutely love this conversation with Rob Chesnut!
Rob is an author, tech general counsel, and has been a federal prosecutor. He enjoys the idea of variety and being tough to label! He started his career as a lawyer in Virginia. After some time in that role, he felt like he was presiding over a lot of negativity. He started to feel pulled to do something positive and uplifting. He believes business has the power to transform the world in a positive way, even more than government, which is often pulled apart by partisan politics.
Rob started looking for companies doing good things in the world. While working as a prosecutor in northern Virginia, he received calls from other prosecutors wanting records about a company called America Online (AOL). (This is when you still received a disk and needed dial up for the internet). 😉 It struck Rob that the internet may have staying power, and he started using a few sights like eBay.
Most companies at that time did not need (or didn’t think they needed) a federal prosecutor, but Rob contacted eBay regarding the potential problems they might run into with illegal items, fraud, regulations, and more. eBay called Rob back the next day. He was asked to start eBay’s “Trust and Safety” department and Rob grew the team to more than 2,000 employees who helped maintain order and prevented fraud on the site.
Later in his career Rob moved onto Chegg and then Air B&B. Air B&B is in the Trust business. There need to be rules and order so that people can connect over their common interests. That has been a theme throughout Rob’s career.
While Rob was the general counsel at Air B&B, it really struck him that the world was changing. Everywhere he turned, Rob saw companies in trouble and being called out for bad behavior. At that time, the level of feedback and public criticism was really something new. People want leaders and companies to step up.
Rob sat down with Air B&B founder, Brian Chesky to talk about how to drive integrity into the culture of a company. They had no idea how to start, but both agreed they needed to try it. They started developing a program that encouraged Air B&B employees to treat each other with integrity, and the employees truly embraced the program.
Rob’s wife, who works in publishing started (strongly) encouraging him to write a book about it. No one else was doing it at the time and she knew it was important for the world. Rob, however, was not at all interested in writing a book. Rob’s wife convinced him by offering to find a co-writer and a major publisher.
Rob thought he had all the knowledge on the subject, but the more he engaged with the writing process, the more he realized he still had a lot to learn. Rob discovered the writing was really a journey of knowledge. The book is called Intentional Integrity: How Smart Companies Can Lead An Ethical Revolution. It includes a wide range of perspectives from well-known artists and industry professionals.
The Internet and social media have truly changed how we interact with brands and organizations. We seem to be on the cusp of an ethical revolution. Up until even just a few years ago, most companies operated under a mantra of “shareholder value.” Anything was ok as long as it increases shareholder value.
Shareholder value worked for a few decades, but parts of it did not work. It did increase short-term focus but may have hurt the planet in the long run, used slave labor in other parts of the world, and not offered employees health benefits. The world started to realize the mantra was also causing problems and was no longer working.
Shareholder value is now being rejected as the way companies should operate. It’s been replaced with stakeholder principles. Now companies need to operate with the best interest of all of its stakeholders. Air B&B must consider not only its investors, but their employees, guests, hosts, and the communities where it operates. Companies are beginning to realize they have a broader obligation to do good in the world.
The key is to think about it holistically across all stakeholders. It should not be all about profit, but profit is important for companies to be able to fulfill their purpose. When a company is perceived to be operating ethically with its business model, with the way that it treats people, it actually outperforms the market and outperforms competitors. It’s not a tradeoff. It gives companies that operate this way a wind in their back. It helps them operate and be more successful as a business.
Employees are holding their own companies accountable and customers are jumping in as well. They both care about where their money is going. If they feel a company is not ethical, they’ll move their money elsewhere and they’ll share on social media to spread the word about unethical practices. Government will jump in too if they see consumers feeling this way.
Rob talks about leveraging the 6 Cs to foster and manage a culture of integrity at work. The first is for “CEO.” You can talk about integrity all you want, but your CEO has to be following that and setting an example. All things are possible if the CEO is on board.
The second C is for a “Code of Conduct.” Having a Code of Conduct isn’t enough. Any company can do that and follow compliance rules. It must be intentionally created with values that reflect what the company is about, and clearly communicated and followed with appropriate channels for feedback and transparency.
The third C is to “Communicate Your Code.” It’s important to proactively prepare and have the message communicated from the top. Consequences are necessary for when rules are violated. Rules must apply to everyone, from the bottom to the top. There must be a clear reporting structure with fair consequences.
Stay tuned to hear more about the 6 Cs and intriguing examples of how they relate to human behavior!
Find out what song Rob has to sing along to when he hears it, someone who has really impacted him with the way he approaches business, what his favorite TV show was growing up, and more! Be sure to stay tuned to hear Rob’s answer to our all important question of what it means to him to run a business with purpose.
8:45 – “I think that’s been a theme throughout my career. Trying to promote good in people and promote human connections through providing a little bit of structure and order to enable the best behavior.”
10:37 – “Where you work is such a reflection of who you are. The brands of the companies where you work become your brands…I think we all want to be proud of where we work. We want to feel as though we are a part of something that is doing good in the world.”
16:20 – “The world started to realize that ‘shareholder value’ mantra was causing a lot of ethical corner to be cut, and it wasn’t working. Not that shareholders aren’t important, but why should shareholder thing be the only thing that matters?”
17:35 – “Why shouldn’t a company also be thinking about what’s good for the broader communities where it operates? And I think that part of this revolution is an understanding that we need companies to think and act differently, and I’m glad that companies are embracing this new idea of stakeholder principle.
18:51 – “You need a purpose as a company. Profit is not purpose. I think you need a ‘North Star’ to kind of guide your actions. I think you have to be solving a problem in the world or doing something good for the world. I actually think profit is critical. Profit is what funds your ability to accomplish your purpose.”
~19:45 – When a company is perceived to be operating ethically with its business model, with the way that it treats people, it actually outperforms the market and outperforms competitors. It’s not a tradeoff. It gives companies that operate this way a wind in their back. It helps them operate and be more successful as a business.”
~23:45 – “You can’t operate as a 20th century company in the 21st century.”
Thank you to our partners of the show:
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The Lemonade Boutique
This episode is sponsored by The Lemonade Boutique, a women’s clothing with a cause store. Featuring ethically made and fair trade items from over 10 countries, every item is made by women facing extreme challenges such as trafficking, poverty, and more. Your purchase empowers women to take life’s lemons and make lemonade. Shop at THELemonadeBoutique.com. Listeners of the Business with Purpose Podcast can save 15% by using code PURPOSE15 at checkout.
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