Valassis and a New Capitalism

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Friends,

“Our upper level executives, from the CEO down to our vice president level, were contractually entitled to receive bonuses,” the CEO said. Familiar language, right? Edward Liddy, CEO of AIG? Well, no. Al Schultz, is CEO of Valassis, a Livonia, Michigan-based company that provides value to consumers through coupons, mailers, and online incentives. For nine straight years Valassis was on the Fortune magazine list of “100 Best Companies to Work For.”* So, what did Al Schultz do?

He did not throw up his hands, powerless in facing these contractual obligations. Instead, he asked – in light of tough times that had included employee layoffs – that the executives offer their bonuses to the board to use in the best interests of the company. Every single executive – through what we can assume were varying mixes of moral duty, corporate commitment, peer pressure, and boss-pleasing behavior – passed on his or her contractually entitled bonus. Many thanked Al for asking them to do what they thought was the right thing. (When Al told this story at our CEO-to-CEO forum at the Detroit Regional Chamber of Commerce, I had to ask the crowd to cheer. I couldn’t help but note how quick we all are to wax and wail at the repulsive behavior of AIG executives; yet we’re so slow to laud exemplary behavior.)

My favorite line from The Leadership Challenge by my favorite leadership authors, Jim Kouzes and Barry Posner, comes screaming to mind, “Only challenge produces the opportunity for greatness.” Where the AIG execs passed on the opportunity for greatness – or just plain decency – the Valassis executives modeled the way with flying colors, sacrificed their personal rights to build a greater organization. And these opportunities are everywhere today!

I’m dreaming of a new capitalism – and a new kind of governmental organization, too – driven by fundamentally great behavior, where leaders lead by thinking foremost of what they can give, of how they can support their people, of how they can serve their clients, build great culture, and contribute. Not by thinking “what’s in it for me.” This challenge offers everyday leaders a whole new opportunity to shape just such cultures. How can you….

Lead with your best self?

Dan

* Valassis was prevented by Fortune’s rules from applying during the past two years, because they have had a major acquisition. They are eligible again this year and are applying.

Audio File:  Valassis and a New Capitalism

19 responses to “Valassis and a New Capitalism

  1. Dan,

    Thanks for citing an example of a company’s upper echelon doing the right thing. No bus tours of exec’s homes scheduled of the bonus non-recipients for that firm! (as with the AIG notoriety). Interesting how public scrutiny/pressure can dictate protocol.
    You are in a unique position, that of being married to a public official/politician; one who was deeply involved in the Obama campaign and transition. As a person who has vocalized my ire, in print, here on this blog for the exorbitant malfeasances exhibited by both the corporate and public servant sectors, I appreciate it when you use your platform to address these issues. Not just from a negative perspective, but equally important, showing examples of propriety when they arise. Your example cited here, rgarding the Livonia, MI based business, reminds me of the bank CEO in Miami, FL, who took his massive $64M bonus and distributed it all amongst the banks current and former employees.
    There is MUCH work to be done, and your statements relative to responsibilty, in the latter portion of your blog post this week, gives me reassurance that you desire to see a real change in our country’s leadership.

    KUDOS to you……this week!! 😉

    1. I forgot to mention…..what a refreshing example of leading: there was a TV article about a group of young artisan types, looked like to me to be in their late 20’s-early 30’s, who are moving into Hamtramick MI,in an area of tremendous blight. They are buying abandoned, decrepid houses and commercial buildings, renovating them with hard work and community desires. Talk about a courageous bunch! Absolutely leading by example!! I tip my hat to you young people!! My heartfelt THANK YOU!

      This is a little personal for me, because as a young kid who grew up in suburbia Detroit, we had family friends that worked in the auto industry, and lived in Hamtramick. For me it was one of my first glimpses into ethnic differences and diversity. To say I was saddened to see what the city looks like today is an understatement.

      1. Tonight at 8 pm eastern time, President Obama is addressing the nation on prime time. Novel idea….he could get John Rich, of the country superstar duo Big and Rich, to play his new hit, “SHUTTING DETROIT DOWN” prior to his speech. We’ve still not seen Congress pony up, or man up, as we say on the basketball court, to accept their roles in this financial meltdown. As I stated in last week’s blog, that was removed….come next election day, it is my desire to see that AMERICA is done with being so poorly led by those in Washington that are culpable…..which is far reaching into the rank and file.

    2. As the Governor has been on the talk shows lately, maybe she could find out about other MI CEO’s who are putting the comapnies interest before themselves and use this for testimony when the AIG tax bill comes up.

  2. Dan,

    I’ve been receiving your email for several months and I’m discovering that even if the comments don’t directly apply to my situation of the moment, I constantly refer to them in various situations in my work and personal life.

    By way of what you can give back for the betterment of the company, the opportunities are endless. As a government employee, I strive to embody all that is best about public service as opposed to the stereotypical government employee. I recently told my surpervisor that don’t have a cell phone paid for by the County, despite having access to a reduced rate plan. I pay for it myself because I feel that it is the least I can “give back” to the County in exchange for the chance to do what I love. Beside my plan is much less expensive and allows me to do everything required by the County plan. My boss responded that I should not do that, that the cell phone is a perk of the position. I feel like in these times there is NO reason to burden the County with something that is certainly doable within the context of my salary. And with every government entity, looking at reducing costs and cutting jobs, it is the right thing to do.

    We all make choices everyday. As a manager and a human being, I hope my choices are good for me AND others around me. If my giving up a little bit can keep someone else employed or keep a service that someone needs, that is all the reward I need. It’s time to give up selfish-ness for selfless-ness. We’ll be a better world for it. Thanks for your part in that endeavor, Dan.

  3. That’s quite admirable, I suppose, Valassis executives giving back their “entitled” bonuses when asked by their chief to do the right thing. But the problem is not resolved. When business leaders have legal “entitlements” to bonus money, and then are applauded when they “give it back” to the company with (I’m sorry, but I’m sure some degree of coercion – as you insinuated), they are not changing really anything.

    Society (read: the meritocracy-minded), at times, judges the welfare recipient of being lazy and having an overblown sense of entitlement, yet you offer up kudos to the 6, 7 and 8-figure salaried executuves who are asked to share their “entitlements” with the board to do as they wish.

    Though of course they did the right thing, let’s not get too carried away with applause for those who give up their entitled bonuses in tough times. Until we change the paradigm of executive privilege to executive responsibilty, where LEADERS are not only emabarrassed by the notion of contractually entitled bonuses, but are also commmitted to changing the way their contracts are written, servant-minded CEO’s like Al Schultz will continue to have to “ask” for this money back.

    It appeared to be a good, quick fix. But have the contracts changed??? I’m curious.

  4. Dan,

    Thank you for bringing that item to us all. I am very happy and thankful that their are people that do the right thing, which is so easy to do, brings so much strength to the table, yet remains elusive to so many. It doesn’t surprise me that you have this position. You and Jennifer bring hope to all of us Michigan residents. Thank you.

    Alex

  5. Dan, thanks for drawing attention to this example of selfless leadership in a time when we seem to be bombarded by the opposite. For those of us who desire to lead in a way that keeps integrity intact, it is good to be reminded that we are not alone. There are many unsung heroes out there, and as you noted, we sometimes need reminders to applaud this efforts.
    Dave

  6. It would be great to live in such a world!! One place our congress can start is by admitting their own mistakes on NOT reviewing the AIG bailout plan which permitted the bonuses in the first place. Honesty in our politicians is critical but pandering to the masses seems more important.

  7. I believe this is the kind of behavior that used to typify most people in their approach to business, home, community etc and regardless of party or other affiliation. I think there are many of us who still do it because it is the right thing to do, but the popular culture has certanly turned such thinking upside down. Adam Cardinal Maida recently asked at a Federal Bar Lunch “When did PROFIT become the singular goal in our society?” It was a simple question that caused a great deal of quiet consideration. I think it is a question that has not been asked aloud in far too long.

  8. Dear First Gentleman: Could you and your wife do everything in your power to pass this inspiring story about this company on to everyone and everybody Washington D.C.? Could you please pass this on to the Secretary of the Treasury and his embattled economic team as they sit on Sunday morning talk shows and get mauled by republican “attack dogs.” Give the White House Press Secretary something to say other than “we’ve been called stupid before.” For goodness sake, what a thing to say…He should be providing every example of positive management in the entire county that he possibly can to the idiotic reporters, he doesn’t need to say things like that to sad sack reporters. That pool of reporters only seems to enjoy reporting everything that is bad, because allegedly only negative news sells newspapers and attracts viewers once they have given their teaser commercials. Pass this on to the idiotic congressmen and other powers that be in Washington so that they could quit bashing the banks and start thinking constructively! What they need are positive examples, good news, instead of screaming bad news, and “shame on you,” and spending time on the floor thinking up stupid acronymns for AIG. Talk about wasting the taxpayers money and their intellect. They need to learn how to lead, and go forward, instead of just using “outrage” as a way to punish what has already been beaten to death like a dead horse. You need to talk your seminars to Washington D.C. and someone should make attendance mandatory for every congressman and senator in the whole place, because a few hours with you would be better than any hours spent on the floor coming up with what is probably an unconstitional, and reckless way to undermine the confidence of the very people that we need inspire confidence in order to bring about a reconstruction of our credit and banking industry. Thank you for taking the time to teach us all how to lead with our best selves.

  9. What your are proposing is not “new”. If you read any of our founding father’s works, you will find that they were all about serving others. This country was founded on the principles of virtue and morality. Have there been mistakes? Yes. Were the founders perfect? No. But we would do well to return to our roots. To remember where we came from and what America is really all about.

  10. Dear Dan ~
    As always with your blog, thank you for the inspiration today!

    When I was a press secretary, we used to joke “good news is no news” … this is the kind of good news though that deserves to be on front pages across the country. Whatever reason they returned their bonuses this still needs to be highlighted to show others the way. Thank you, Dan, for your wonderful reporting!

  11. Maybe we are all living too long and forgetting what we all know. These good habits of doing the right thing were taught to us when we were youngsters. It might have been our parents, scout leaders, or teachers, but the message was clear about doing what was right when we were six, seven, and eight years old.
    We shouldn’t have to rely upon a foolish reactionary Congressional bills to amend these situations. As someone suggested earlier, look in a mirror. You all know what to do whether it’s a simple as running a yellow light, considering your tenure as a teacher or your work bonus.

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