David Stern '66LAW, NBA Commissioner Emeritus, and Sunil Gulati '86GSAS, President, U.S. Soccer, discuss trust in the business side of sports at the Restoring Trust: New Realities and New Possibilities in Business Leadership conference. For more videos from the conference, please view our video library.
By Samantha Marshall
July 5, 2017
It was the sweaty post-game embrace that would change the conversation.
When NBA Commissioner Emeritus David Stern and Magic Johnson met mid-court for a victory hug, it was about so much more than the basketball icon’s impressive win in the 1992 All Star Weekend – it was a heartfelt stand against the fear, hatred and ignorance that thousands infected with the HIV virus had been experiencing at the time. That authentic moment also foreshadowed a major shift in the way the AIDs epidemic would be managed around the globe, sparking an activist movement that would heighten awareness and raise millions of dollars for treatment and research towards a cure.
Of course, Stern didn’t necessarily know this at the time. As he explained to the audience at the Bernstein Center’s November 2016 conference, Restoring Trust: New Realities and New Possibilities for Business Leadership, he was simply focused on “doing what is right.” Back when many believed they could become infected with a mere handshake, he was determined to embrace his player in this very public way no matter what the potential fallout from advertisers and ticket-buying fans might be.
“We had to make a quick choice, either to stand with Magic or not,” Stern recalled. “We stood with him.”
“We had to make a quick choice, either to stand with Magic or not. We stood with him.”
Given the competing pressures of quarterly profit statements and shareholder expectations, pushing for societal change is not always the easiest thing for corporate leaders to take on. But it’s becoming increasingly necessary in the absence of ethical leadership in government, where extreme self-interest and partisan politics are pandering to the lowest common denominator, creating a moral vacuum.
It takes courage, nimble thinking and a commitment to understanding the facts to step into that breach. At the time of Johnson’s diagnosis, AIDs was considered a death sentence. The MVP Basketball star was not expected to live past three years. Infected after having unprotected sex with several female partners, many saw his condition as a punishment for “loose morals.”
With Stern’s support and encouragement though, Johnson gracefully retired and became an AIDS activist. When Johnson, who had minimal symptoms, later asked to come out of retirement and play in the All-Star game, it put the NBA commissioner in an awkward position. Some players didn’t want to play with him for fear that brushing up against him and coming into contact with his sweat might somehow infect them. This was when AIDS patients were so reviled that Ryan White, a little boy who was infected through a blood transfusion, was not even allowed to go to school.
Mr. Stern’s response was to educate himself by reading every research paper and medical journal he could lay his hands on. He reached out to leading experts in the field, and quickly sent doctors to every NBA franchise to separate fact from fiction and answer any questions the players might have. The move quickly diffused much of the tension surrounding Johnson’s participation in a game which, ultimately became a referendum on the AIDS/HIV epidemic and turned the tide of public opinion from panic to compassion.
It was an early example of the broad benefits of “conscious capitalism” – where immediate concerns for the bottom line make way for grander societal ideals that can lead to positive actions on everything from global hunger to water conservation. Conscious of the demands of millennial consumers who expect more than just quality in the products they buy, many companies integrate concepts of social responsibility throughout their business models. And it’s paying off. A recent report by Deloitte found that a corporate focus on social impact not only helps in the recruitment and retention of millennial talent, it can also boost both corporate growth and the bottom line.[i]
“Social impact has evolved from a pure PR play to an important part of corporate strategy to protect and create value,” the report says.
“Social impact has evolved from a pure PR play to an important part of corporate strategy to protect and create value.”
This goes far beyond the corporate philanthropy/social responsibility efforts that many businesses keep separate from the rest of the organization. Some of the best-known examples of companies building social impact into their core business strategy include Unilever, which actively seeks to reduce its environmental footprint; Danone, which focuses on water conservation and nutritional education for young parents; Chobani, which makes a point of hiring refugees; and SABMiller, which is promoting sustainable water management and investing in methods to reduce water usage per hectoliter of beer. These companies invest in their communities and partner with local businesses to improve the environment and raise standards of living in areas where they operate.
And for many of these businesses, social impact is more than just an afterthought. As Jim Rogers, former President, CEO and Chairman of Duke Energy, told the Bernstein Center audience:
“You have to think intentionally about how to create value for investors, customers, employees, suppliers, the environment and the communities that you serve. That approach allows you to be centered on what you are trying to achieve.”
Shoemaker TOMS’ is a case in point. Since its launch, the company’s entire brand strategy has been based on giving back. For every pair of shoes it sells, it gives another away to a child in need. It’s a strategy that appears to be yielding financial returns. The privately-held company has so far given away more than 50 million pairs, and is estimated to earn about $400 million in annual sales.
According to Deloitte’s survey of Fortune 500 companies, about a third make positive societal impact part of their core mission, and that number is rapidly growing as corporations are forced to compete with emerging businesses and startups focused exclusively on various forms of social entrepreneurship.
Kesha Cash ‘10, founder and general partner of the Impact America Fund (IAF), represents this new wave of social entrepreneurs. She requires each company she invests in to be committed to an inherent social mission. She founded the fund specifically to support early-stage high growth technology companies that would benefit marginalized communities.
Recipient of the inaugural Student Leadership and Ethics Board Alumni Ethical Leadership Award at the conference, Cash has deployed millions across seven companies with diverse goals based on social enterprise, from Mayvenn, an e-commerce platform that allows independent hair stylists to operate their own online storefronts to sell products directly, and ROHO, a platform for on-demand religious content that allows users to connect more deeply to motivational sermons, even when they can’t get to a church.
When asked by the panel audience how she can be certain that these companies will always consider social enterprise as part of their business model when they scale up, Cash explained:
“The entrepreneurs who we trust are passionate about economic and social issues – values that will be manifested in their decision-making process. We know that their intention is good, and as they operate and grow their business they will do the right thing. When we get this part right these companies will become large competitors. They will be the chosen companies for the consumer.”
Of course, it takes vision from leaders and role models like Cash to set the tone from the top down – leaders who see their purpose in a much broader context than business success.
“We identify as one human race and deeply consider the impact of our actions on other human beings, the environment and future generations,” said Ms. Cash, who’s lived experience of economic hardship, and an abiding belief in human potential, inspire her life’s work and keep her motivated despite the pressures for profits.
Of course, in an era of rampant corruption, extreme polarization, and a general lack of civility in society, ethical and activist leadership requires Ms. Cash’s brand of energy and backbone. During the conference, several leaders from the conference remarked on the number and quality of young entrepreneurs and executives like Ms. Cash who are carrying the torch forward and expanding upon the concept of conscious capitalism.
Mr. Stern, for one, was relieved. In response to doping, cheating and spousal abuse charges that seem to permeate professional sports today, he joked:
“It’s why I am so glad to be Commissioner Emeritus.”
Please visit our video library and photo library for more from the conference.
