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The CEO's Boss: Tough Love in the Boardroom resources

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8 T H E S O C I A L C O N T R AC T solid tablets. Th is recall of Tylenol products had a retail value of more than $100 million. Th ese decisions were strategic and could only have been guided by a clear set of principles that served as both a moral compass and a recipe for business success in a time of crisis. As a result, Tylenol was able to navigate through this diffi e market share cult time with the Tylenol brand intact. Th of Tylenol, which collapsed from 35 to 8, rebounded in less than a year, and the brand regained its former popularity aft er coming back on the market in a triple- sealed package. Commitment to the Stakeholders One of my custom clients at Executive Education refers to his list of stake- holders as the “four legs of the stool” of the business. If any one of the legs is weak, the entire or ga ni za tion is out of balance. If you look back at the Johnson & Johnson Credo, you’ll see that these four stakeholders consti- tute the focus of the company’s values, and all four were considered in its reaction to the Tylenol crisis. M&T Bank is another example of a company with a clear commit- ment to its stakeholders. Its Vision Statement reads, “M&T strives to be the best company our employees ever work for, the best bank our customers ever do business with and the best investment our shareholders ever make.”10 It then speaks about its role in the community: “M&T Bank has a long tradition of being involved in the cities, towns and neighborhoods in which we operate. As a community bank, we understand that the well- being of our company is connected to the well- being of the communities we serve.”11 Th is clear statement of commitments has helped M&T Bank’s longtime CEO and chairman, Bob Wilmers, and his board turn the busi- ness into one of the twenty largest bank holding companies in the United States. A recent article in Fortune magazine captured the essence of M&T’s Credo in its lead headline, “Banking the Buff alo way: At a time of crisis in the fi nancial system, the big boys could learn a lot from the success of a thriving regional player, M&T Bank.”12 In Columbia Executive Education’s M&T Bank Executive Leadership, which I directed from 2006 through 2008, we focused on strategic man- agement, leadership, and growth. I saw a calm resolve from the company at the onset of the banking crisis in 2008, and this attitude was based on the executives’ shared commitment to employees, customers, sharehold-

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