Are you ready -- social capital
How do you give 100% of yourself and your energy to the challenging task of making your company not only a big success but also a force for good and a bastion of human respect? iStock/Michail_Petrov-96

A big part of being an example of (or: of advancing) Social Capital is that it’s not about you, but about how to make the world a better place with your presence. As a CEO or corporate leader, that can be a bit of a conundrum. How do you give 100 percent of yourself and your energy to the challenging task of making your company not only a big success but also a force for good and a bastion of human respect -- without making yourself so indispensible that the company revolves around you or cannot exist without you?

Sometimes, the best answer to that question is: You can’t. Or at least maybe the time is not right to leave and hand over the reins. In those cases, the leader decides it’s in the best interest of the company to not leave even when the temptation to do so comes in the form of big bucks and big offers.

In other cases, it’s a matter of cultivating such a powerful culture and presence of the ideas that you think are paramount to the company being a Social Capital presence, that the legacy of that ethical behavior endures and even grows after your departure. There really is no one way to do this, but there are some definite tips for accomplishing that responsibly and effectively. We have done our best to find the best examples of a variety of ways some leaders have chosen, and we are sharing them this month.

So, whether you are looking for answers as to whether – or when -- you should stay or go, or you want some great tips for how to keep the fires of Social Capital burning brightly for years to come after your departure, these Social Capital leaders and their helpful insights should prove invaluable.

Long live your company, and its Social Capital.

Hubert Joly: former CEO of Best Buy

Hubert Joly believes business is about purpose and human connections between the employees, between the employees and the customers, the vendors, the community, the shareholders, and the environment in a holistic fashion. And he wanted to make sure that when he left the company one day, that culture would continue. “That’s what we need to do the create a future that does not exist yet, that we need to create because the current trajectory is not good, and that’s how we would create a more stable future for ourselves and our kids,” he says.

Business continuity plan -- social capital
“If you start with finances, you’ll never get to people and clients, and at the end of the day, it’s those two things that truly drive the business,” says Hubert Joly. iStock/designer491

However, the origins of the company culture that developed under his tenure lay in the mindset he had brought with him when he took the reins at Best Buy: the need to broaden minds at the leadership level. “ If you can connect the search for meaning of the individual with the purpose of the company, then magical things happen," explains Hubert. He believes in what he calls “human magic”: mobilizing people to give their best effort and having that, then, translate into extraordinary performance. So, the first concern of a business leader is how the people in the organization are doing. Checking on how the clients are being served comes next. Lastly in this hierarchy are the financials. In Hubert’s view, “If you start with finances, you’ll never get to people and clients, and at the end of the day, it’s those two things that truly drive the business.”

Once Hubert had given Best Buy a strong reset from a failing to a successful company, it was wise to look further forward. And Hubert recalls, “When I was at Best Buy, one of our board members brought up the idea of using an executive development firm to help with the development of the two or three potential successors we had identified. Instead, I decided to use their services with every member of the executive team, self included,” He envisioned the focus would be on leadership growth, and how everyone in the leadership suites could function more effectively as a leadership team, rather than helping just two or three individuals prepare for some distant, abstract event.

This broad approach to leadership development also reinforced Hubert’s belief that it is a myth that a person is either born a leader or not. “I’m the personal proof that you can grow into being a good leader,” he says.

Hubert felt this would set a foundation for the company that would enable it to move forward once he stepped down. “Late in 2018, I began to reflect on the right time for me to pass the baton to a next generation of leaders. Several reasons ultimately led me to want to do that. Some were professional: we had accomplished what I had set to accomplish when I took the job, I felt that the team we had developed was ready to take over, and I felt it was important for the company to have a team ready to lead with a long-term focus.”

Hubert believed that, being co-created, the environment and culture would be lasting.

Of Best Buy’s development efforts, Hubert says, “It worked well because all of us needed to grow as leaders, the entire team benefited, and we avoided creating false or premature expectations.” Significantly, he notes, “The mental shift from succession planning to executive development was liberating for everyone. And while the focus on succession had shifted, we could still see, as a board, which team members were progressing.”

“In addition, I was ready to start a new chapter in my life, after 20 years or so being a CEO.

“I had always felt that my life was not tied to being the CEO of a company and that I was just asked, for a period of time, to be the custodian of that company, responsible for leaving it in a better state than when I had started. My goal from the onset was to be dispensable. That’s why I decided to pass the baton of CEO to Corie Barry and her team in 2019. I felt I had accomplished what I set out to do and it was an easy decision. The company was doing well, powered by exceptional people and led by an extraordinary executive team.”

He stepped down as CEO in 2019 to become executive chairman then left the company completely in 2020, although he is still an advisor to the current CEO and board of directors. Now, as a senior lecturer of business administration at the Harvard Business School, he is helping inspire the next generation of business leaders with a new, better view of business and capitalism founded on purpose and humanity -- the Social Capital philosophy we love so much!

David Novak: former CEO of YUM! Brands

David Novak credits his parent for instilling in him by their example the beautiful way to treat people that underlies our appreciation of him as a Social Capital business leader: giving employees recognition so they know they are appreciated. And from day one as CEO of YUM! Brands, he began preparing his replacement to do the same.

He pioneered the concept, which he calls “purposeful recognition,” as co-founder and CEO of YUM! Brands, which operates KFC, Pizza Hut and Taco Bell, among other restaurant brands. “Recognition is a wonderful way to really create a lot of fun in your company as well. You want to take the business seriously, but you don't want to take yourself too seriously. And by having fun recognizing people and celebrating other people's success, we were able to get great results,” he says.

“I just have to give my mom and dad a lot of credit because I grew up in a very humble background,” he relates, “but I had unbelievable parents. We grew up in a trailer, and they just recognized me throughout my life, and they still are the first one to call me if I ever do anything good.” And he has a powerful way of paying that forward.

David became the CEO of Yum! Brands in 1999 and says his search for a successor began from that point on until he retired in 2016. “The expectation for all our leaders was to identify backups and development plans for their potential successor, and I was no exception,” he says. “I developed a checklist of the characteristics I felt were essential for the next CEO.” Chief among them were a tangible demonstration of results over a sustainable period of time, the skill to create a future back vision, maniacal focus on customers, the rigor to drive accountability and ensure outstanding execution, and a fervent belief in people, including the importance of talent, the ability to recruit and retain top leaders. “And, of course, the passion to sustain and build our powerful recognition culture.”

He believes it is important – “most important,” he says – for business leaders to make their company culture so entrenched that the people in the company hold the next CEO accountable for continuing to drive it. “It is an expectation of the job and the CEO knows that he or she will fail without it. The worst thing that can happen to a company culture is when the team says, ‘I remember when we . . .’. It’s up to the CEO to create new memories. Obviously, I evaluated my successor’s ability to drive our culture in their piece of Yum! and walk the talk of our key behaviors and values. This was an absolute must-have, and everyone knew it.”

Racing hands -- social capital
David Novak believes it is important for business leaders to make their company culture so entrenched that the people in the company hold the next CEO accountable for continuing to drive it. iStock/sportpoint

Stepping down from the company he had led for 17 years was prompted by family needs. “Fortunately, I had a successor in place who was able to carry the ball forward. I also was able to spin off our China business into a separate public company, making it Yum! Brands largest franchisee and I knew that was the strategic move that would grow our business.”

As the head of a global retail business, he had felt he had a responsibility to visit restaurants and restaurant support centers around the globe, spending 80% of his time out in the field. “This became untenable for me due to my wife's failing health,” he relates. Although many advisors told him he could travel less and leverage his equity with the YUM! Brands employees and the investment community, he says that option did not feel right. “When I knew I couldn't put the uniform on like I used to, I knew it was time to step down.”

The decisions he put in play in stepping away proved positive. He reports that the stocks for both Yum! Brands and Yum! China have more than doubled in the last five years. “The company was set up for both business and cultural success,” he says.

“My purpose in life now is to make the world a better place by developing better leaders,” David shares explaining the impetus behind founding David Novak Leadership and launching the How Leaders Lead brand, which includes his podcast with top leaders in the world and digital training programs, and his book “Taking People With You: The Only Way to Make Big Things Happen” was a New York Times bestseller. “It is critical that leaders take accountability for their own personal development, which spurred me to write my latest book, ‘Take Charge of You: How Self Coaching Can Transform Your Life and Career,’” he says. “Your life and career are far too important to delegate it to someone else.”

Mike Brady: former CEO of Greyston Bakery

Mike Brady is eager to share the business story of Greyston Bakery, which he led for eight years. In fact, he has spoken with us several times to share his insights and experiences as CEO of Greyston Bakery and his admiration for the ideals of Zen Master Bernie Glassman, who had founded the organization on his vision that a business could thrive financially and contribute to the betterment of society at the same time. In fact, when Mike would eventually leave it would be to pursue those goals even more aggressively.

It was for Mike’s devotion to the principle of open hiring that we first honored him in our feature How America’s Top Social Capital CEOs Can Teach Us the Power of Kindness .

During his tenure at the helm of Greyston, a team of social justice innovators at the Start Foundation in the Netherlands embraced Greyston’s open hiring model and implemented it with fantastic success in a completely different socio-economic model. This showed him clearly the potential for global impact with inclusive hiring. “They succeeded in placing people facing a distance from the workforce into jobs without interviews or background checks regardless of their age, refugee status, work history, education or any other barrier to employment,” Mike reports. Replicating the open hiring model outside of Yonkers was a multi-year effort that required a collaboration of business, philanthropic and NGO partners. “This was one of many achievements at Greyston, across a spectrum of business and social metrics, that put the organization on a long-term path for success,” he says. But for him, “Moving the organization forward along that path was something I knew others could do and I was ready for change.”

Mike sees this theory now driving economic growth around the world as ESG (Environmental, Social and Governance) investors have been in pursuit of socially conscious businesses under the belief that making a measurable positive impact on society correlates with enterprise value. And he points out that only a few weeks ago, Warren Valdmanis, a partner at Two Sigma Impact -- a private equity business focused on workforce impact -- released a TED Talk titled “What makes a job ‘good’” -- and the case for investing in people, explaining many of the principles that Bernie espoused forty years earlier.

As Greyston’s CEO, Mike reinstated the special culture Bernie had created and focused on ensuring that purpose would continue. Bernie started Greyston Foundation in 1994 to provide social services desperately needed in the low-income community of Southwest Yonkers where Greyston’s commercial business operated. This created a unique governance model with a nonprofit entity owning the for-profit. “By the time I joined the company in 2012,” Mike recalls, “the entrepreneurial vigor had withered as Bernie had left the organization fourteen years earlier. My contribution to the culture was to bring back the visionary mindset upon which Bernie had founded Greyston, to develop an operating model meeting the standards of a Fortune 100 company, and to find a team capable of executing it.” The new leadership committed to three broad goals related to entrepreneurial excellence, proactive problem solving and a promise to support each other on the journey. The culture they created was similar to what Bernie used to build the organization, and they were successful in launching a new national brand of baked goods and creating a social justice center to codify and replicate their inclusive hiring model. Now, Mike says, “I will always encourage new leadership to develop language to fit their persona, but the cultural values upon which Greyston was founded will not change.”

Greyston’s model for inclusive hiring, called “open hiring,” was based on the Buddhist principle of non-judgment, so developing the company’s staff without judgment was core to the work. “We embraced the potential in everyone in the organization to be a leader and we invested in that potential to develop the best talent. We had less interest in what team members had done in the past, yet we were completely committed to what you were going to accomplish in your future,” Mike says, noting this was true for the newest apprentice working the bakery line to the experienced hire empowered to create the next program.

Offering more food for thought, Mike says, “The incomparable Steve Jobs captured it brilliantly with, ‘It doesn’t make sense to hire smart people and tell them what to do; we hire smart people so they can tell us what to do.’” Applying that philosophy to this feature’s topic of leadership succession, Mike says, “It is the responsibility of the CEO to hire a quality leadership team and empower them to lead the organization, so when the time comes to transition the organizational disruption is minimal.”

For him, as indicated above, the time came with the Netherlands effort. “I could see then, as I do now, that there is a sea change underway in how business, government and philanthropy work together to create social change, but that nonprofit solutions were not making progress at a pace needed to drive systemic change,” he says. Although crediting nonprofits – like the foundation that oversaw the profit-based bakery that Mike ran - for their invaluable role in developing social innovations, Mike points out that nonprofits are generally project-based, with many strings attached. “The financial model doesn’t include general operating costs, like technology, capital expenses and non-programmatic staff,” Mike explains, observing that fact “creates fiscal imbalance and inhibits scaling.” He sees this as a problem unique to the social sector that many philanthropists, impact investors and civic leaders are working to solve. Mike is dedicated to proving the profitability of ESG, so he explains, “When my interest in solving this problem was superseded by other entrepreneurial goals, I knew it was time to step down.”

Mike, who is now a consultant on inclusive hiring, social justice, and nonprofit and corporate governance, says, “ Whenever I speak to students about making career decisions, I recite this line delivered by Paul Polman during a presentation on regenerative business practices: ‘Think less about the career you want and more about the problem you want to solve.’”

Noting there are massive shifts underway in philanthropy, government and business, Mike believes, “The future of work is about using advances in technology to build regenerative companies capable of delivering services and products at fair prices and generating a fair return to all stakeholders.” Says Mike,” I am driven to use the forces of businesses and capital to create a more equitable future of work. Restoring trust in capitalism requires us to think differently about how we do business and about how we invest.”

Brian Scudamore: CEO of 1-800-Got-Junk

Brian Scudamore went from high school dropout looking for a summer job to a “blue-collar millionaire” with a simple albeit brilliant idea to turn troublesome trash into a positive customer experience with 1-800-Got-Junk.

Now, the company has more than 250 locations in the U.S., Canada and Australia under Scudamore’s O2E (Ordinary 2 Extraordinary) Brands, a half-billion-dollar business that includes house-painting company WOW 1 Day Painting and home-detailing business Shack Shine.

What made him a perfect entry for our Social Capital list is, he’s just a down-to-earth guy who knows the best way to achieve success is by treating people well. Scudamore created a business all around the idea of customer service and happiness, and he really believes in communicating those concepts constantly with customers and employees. In fact, he built his entire hiring process around it. Brian is so personally involved in this and finds so much fulfillment in it that, for him, the very idea of ever stepping down as CEO is hard to even fathom.

“For me, I’ve always felt like walking away would be selfish,” explains Brian. “I’ve got a bigger purpose. A grander plan. And on many occasions along the way, I’ve been offered large amounts of cash -- so I was tested on this belief (I turned down an early-day $100 million offer!). I think it comes down to understanding what my purpose is and what makes me happy.”

Scudamore’s purpose and the very idea of how and why he started his business was to make a difference in a way few thought was possible and to create a business model that many said was not viable. He believes the people whose lives have been made better because of that, including his own, would be detrimentally affected if he walked away.

“I love nothing more than watching people grow, planting seeds of ideas that were once barely thought possible and watching a team rally around making them happen -- like creating brands in fragmented spaces like junk removal, house painting and house detailing,” explains Scudamore. “We were told these industries were not franchise-able, yet we took on the challenge to make it happen! And making ordinary businesses exceptional is not something I want to give away, for any price, to a team that might be driven more by money than by meaning.”

Brian believes if he had taken the money and run back in 2007 -- when he was offered a boatload of cash -- his company might no longer exist, as the new owners may not have had the stomach to get “really scrappy to keep the lights on” when the economic collapse of 2007 and 2008 came around. That would have meant not only thousands of lost jobs but lost opportunities for hundreds of entrepreneurs who got their start through Brian’s franchise formula.

But, of course, this begs the question: Is this the right decision for all of us or is Brian a special case because he loves what he does so much? He doesn’t think so. He sees a world of untapped opportunity for those who are willing to take the long view.

“I’ve often wondered, “What if more founders played the long game versus building a quick exit into their plans?” ponders Brian. “I hear today about so many founders who start apps, tech companies and new products who build a quick exit into their plans. With all due respect, I feel like we could use more founders sticking around and protecting their original ideas, passion and purpose. I think sometimes great ideas don’t go in the direction that the initial visionary saw, once they’ve been bought by a team with different motivations.”

Obviously Brian cannot run the company forever, but he’s intent on fighting the good fight as long as possible because he believes he has only yet begun to make his mark, and the best may, in fact, be yet to come. And there is more than a lesson or two in that for every entrepreneur or CEO.

“Now, we can’t predict the future. I get that, and I’m sure there could have been many arguments on the flipside -- and I do know founders can often get in their own way -- but I think the originator of an idea often sees something way beyond money, that others might not or aren’t able to see.”

Concludes Brian: “Call me crazy, but, as Apple once said in its famous commercial, “The ones who are crazy enough to think that they can change the world are the ones who do.”

Robert Glazer: former CEO of Acceleration Partners

On the flip side, Robert Glazer’s incredibly deep devotion and connection to his employees is the very reason he thought it was important to step aside as CEO and let one of them take the reins, adding new insights and inspirations to the mix.

“Deep down, I knew that I wouldn’t be CEO of Acceleration Partners (AP), the company I founded, for the rest of my career,” reveals Robert. “As the company continued growing, I realized that what I wanted to focus on, both inside and outside of Acceleration Partners, and what the business objectively needed from a CEO were diverging. Once I came to that realization, it was natural to think about who could eventually take the CEO role after me, and I did not have to look very far for a natural successor.”

Robert’s award-winning affiliate marketing agency has been ranked repeatedly among Glassdoor’s best places to work, and he was twice named No. 2 on Glassdoor’s list of “Top CEOs of Small and Medium Companies in the U.S.”

That’s pretty amazing since he doesn’t even own a building for his employees to work in. His company has always been remote. How did that happen? Well, one way was with the most conscientious, honest and well-thought-out hiring processes imaginable, all designed to make sure that those coming on board know what the company is about and what to expect, what the work environment will be, and to make absolutely sure it is a good fit for both parties. If, after all that, it still doesn’t work out for some reason, Glazer will personally help those employees find a different job either within the company or even with another employer by personally tapping into his extensive contact base.

Such a powerful hiring strategy and incredibly well-designed training program is probably why he was so confidant when the time came to step away that one of his original hires would be the right one to take over.

People strategy -- social capital
A powerful hiring strategy and incredibly well-designed training program is probably why Robert Glazer was so confidant when the time came to step away that one of his original hires would be the right one to take over. iStock/Eike Leppert

“I have many flaws as a leader, but I have always tried to hire people who are smarter than me,” says Robert. “Likewise, I believe leaders should genuinely want their best people to be positioned to take their job one day.”

“Matt Wool, who became AP’s CEO in December, has been my number two for a decade. He was our fourth employee and has grown at the same rate as our organization -- whenever there was a new level of leadership responsibility to be taken at AP, Matt put himself in the position to take that role. He has always challenged himself, sought out feedback and looked for new ways to learn and improve. As AP’s president, he already ran the company’s day-to-day operations for the past five years.”

But for Robert, or anyone who has come to the conclusion that they need to pass the torch, the question is how to proceed. For Robert, it meant putting in the time to prepare his replacement properly.

“I knew Matt was on the trajectory to become CEO, and I wanted him to have that chance at AP,” explains Robert. “Knowing that, one day while on a walk during a conference in London, over two years ago, I first asked Matt to succeed me as CEO. When he agreed, we laid out and executed a careful transition plan from there. I made sure that Matt was given increasingly more responsibility over the business -- including managing nearly our entire Senior Leadership Team -- and connected him with any resources that could help him hone and develop his leadership skills. All I did was give Matt the space and resources to grow; he did the hard work.”

But even if you know you have right replacement, and you have done all you can to prepare them, how do you ensure the culture you created continues under their new leadership? For Robert, “it’s already baked into the mix long before you decide to step down.”

“Organizational culture must come from leadership, but it does not depend on any one leader,” insists Robert. “A quote that’s always resonated with me is from Sheryl Sandberg: ‘Leadership is about making others better as a result of your presence and making sure that impact lasts in your absence.’ I’ve always aimed for our culture to be able to stand strong even if I’m not at the head of it. While there are connections between AP’s cultural principles and my personal values, AP’s culture does not depend on me being at the head of the company.”

For Robert, that goes right back to that incredible training for new hires and the overall commitment to the tenets of that training on an ongoing basis.

“We’ve built our culture around clear, consistent core values and a vision for our company and industry,” explains Robert, noting that the values and vision are supported by clear organizational goals that are tenets of our daily work. “For example, we walk every new hire through our Vivid Vision, we use our core values for promotions, performance evaluations and even annual awards, and we keep our company goals visible and transparent to the full company.”

Robert continues, “I also know that Matt, my successor as CEO, believes just as strongly in our culture as I do. He exemplifies our three core values—Own It, Embrace Relationships and Excel and Improve—and upholds them on our Senior Leadership Team. I’m not worried about our culture because at this point, it’s so firmly ingrained in what we do — and because our leadership is dedicated to that culture.”

Robert could not stress more emphatically that such a formula is key not just to the continuity of success but to the success in general of any company, as the mission and values of the company should be bigger than any one employee — even if that one employee is the CEO or founder.

“Over the years, I’ve seen many cases where a leader’s identity is intertwined with their business. Starting and growing a business is often an entrepreneur’s greatest accomplishment outside of their family,” says Robert, and he believes part of that reward is retaining the coveted title of CEO — a badge of achievement and validation that is tough to give up. “But founders shouldn’t hold onto this title forever, especially when it doesn’t really serve their best interest or that of their company. Though being AP’s CEO has been one of the highlights of my life, I am excited for this next chapter for both myself and the business.”