Integrity as a dynamic for long-term company performance

John-Deere-Pierre-GuyotThe six schools of the Council on Business & Society* are dedicated to training students and participants to lead responsibly for the common good. The Council invited Pierre Guyot, VP World Wide Supply Management of John Deere and former Tuck Global 2020 Executive Program participant, to speak about how his company uses a deep-running commitment to integrity to foster positive results for its people and its business.

*ESSEC Business School, France and Asia-Pacific; FGV-EAESP, Brazil; School of Management, Fudan University, China; Keio Business School, Japan; University of Mannheim, Business School, Germany; Tuck School of Business at Dartmouth, USA

Why is integrity so important for John Deere and how does the company go about ensuring integrity throughout the organization?

At John Deere, integrity is the fuel for sustainable long-term performance and a core value that permeates the entire company. The culture, the brand, the tone at the top and the behaviour of top executives and mid-level managers all start with integrity. The company has a code of conduct, guidelines and management processes that emphasize integrity and together, we believe that these processes and behaviours differentiate John Deere, increase efficiency and fuel strong, sustainable performance.

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Every success story is built on historical roots and founding figureheads. What is the story behind John Deere?

John Deere was founded in 1837. Mr. Deere imported steel from England and used it to make plows in the United States. He focused on creating innovative products, growing market share and expanding, which included making acquisitions.

Early in the company’s history, Mr. Deere and the company’s other leaders articulated four core values – integrity, quality, commitment and innovation – and these still provide the driving force behind the company. In the past decade, John Deere has been fortunate to have benefited from strong tailwinds – that is, conditions or situations that have helped move growth higher. Around the globe, there is a need for food, and in particular grain and protein, as well as shelter and infrastructure. As the globe’s population and wealth both rise, this has benefited John Deere. As a result, the company has grown to $32 billion, with a 7% growth rate (CAGR) over the past 10 years. John Deere is now focused on becoming a $50 billion company by 2018.

Has that performance been at the detriment to a stretched workforce and challenging conditions?

No, it hasn’t. Indeed, in addition to this strong performance, John Deere has been named a most admired company and a most ethical company. Even in China where John Deere has only had presence for 10–15 years, Deere is already recognized as a great company. This is equally true in Brazil as well, where John Deere has been identified as one of the country’s great places to work.

Have the company’s values helped this?

Leadership attributes Council on Business & SocietyTotally – yes. Values are embedded in our culture and how we do business. The company’s values are clear. The challenge is bringing these values to life so that all John Deere employees’ behaviour is driven by these values each day and we do this through providing guidelines and policies and a code of conduct, as well as cascading our values down through our culture, management processes, and seniority, with an underlying message to “walk the talk”. Indeed, setting an example and championing integrity are paramount in generating trust and positive behaviours both within and outside the company.

Can you go into more detail about these specific points?

Yes – for example, it’s important to formally tell employees what is expected of them via specific guidelines and policies. Additionally, the expected behaviour has been codified and set forth in a code of conduct underpinned by our values and both company and universal ethics. By culture I mean that John Deere has created a culture of integrity and compliance drawn from its historical roots and providing a guiding framework for the new generations. Walking the talk: integrity doesn’t just come through policies; it comes from the tone set at the top of the organization by the CEO and the senior executives. It also comes from the “tone from the middle” because middle management is closer to the front lines and touches more people. Regarding our management processes, this includes the processes by which decisions are made. People see where and how they are arrived at and whether this is consistent with the culture and guidelines. And finally seniority – at John Deere, most of the company’s senior leaders have been with the company 20–30 years and, as a result, the values and culture have been deeply instilled.

sign direction right - wrongMost importantly, all of these elements come together in how Deere operates on a day-to-day basis. This includes behaving with integrity with employees, customers and vendors. An example of how the company lives its values is that employees are allowed to take reasonable risks. At John Deere, it’s all right to make mistakes as long as they are made in good faith and even if such risks result in the company losing a significant amount of money, the company focuses on the value in learning from the experience. But if an employee cheats on their expense report, they are out in one minute. This tells people how we do business.

How are these values linked to performance?

Many companies have values, guidelines, policies and cultures that value integrity. What differentiates Deere is linking these values with performance. At Deere, the culture of integrity and the way that everyone acts is hard to copy. It creates greater efficiency and greater trust with employees, customers and suppliers and the result is a more effective, more efficient operation with improved performance.

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Council Student Survey

The Council on Business & Society surveyed a sample of students from the six schools to gain insight into what they consider as attributes of a successful CEO. The results gave (top 3 rankings): 1) Financial and commercial success 2) Ethical behaviour 3) Takes a strategic view of business. What do you you think?

Further reading and information:

The Council on Business & Society Global Alliance is an ongoing international dialogue between six of the world’s leading business schools and an organiser of Forums focusing on issues at the crossroads of business and society – The Council Community helps bring together business leaders, academics, students and journalists from around the world. #CouncilonBusinessandSociety

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