What happens when a company places service before leadership? Wawa Inc. did just that, and its chain of convenience stores has soared as a result. Jeffrey M. Cunningham, founder of NACD Directorship magazine and professor of leadership and innovation at Arizona State University, spoke with Wawa Chair Richard D. (“Dick”) Wood Jr. on the main stage at NACD’s 2015 Global Board Leaders’ Summit about the inner workings of the regional convenience-store chain that has grown into a $9 billion empire.
Originally an iron foundry established in New Jersey in 1803, the Wawa company has weathered many rounds of disruption to become one of three genuine cult businesses in the country, the other two being In-N-Out Burgers and Chic-fil-A. Wood ascribed his success at the privately-owned company that he has served since 1970 to the concepts of servant leadership and being a steward of investment in advanced technologies and innovations. A member of Wawa’s legal counsel at the beginning of his career, this descendant of the founder now serves as non-executive chair of the company’s nine-person board.
For the first half of the event, Cunningham interviewed Wood about the history of the company and Wood’s commitment to the philosophy of servant leadership. In a business context, this philosophy puts service to every stakeholder before any other facet of the enterprise. Wood takes justifiable pride in Wawa’s commitment to its 26,000 employees, including their ownership in the company. Wawa’s Employee Stock Ownership Program (ESOP) has created such value for employees at every level that the organization last year received 300,000 applications for its available 3,000 open positions. The Wawa model has proven to be profitable not in spite of but because of its commitment to family and service.
Once the conversation opened up to questions from the floor, Wood described some of the business challenges he’s faced over the years and how he has surmounted them. When asked about his reputation as “Chief Paranoia Officer” and how even good CEOs often misread the signs, Wood said, “Every time it comes back to hubris. It always comes back to hubris. CEOs didn’t have enough paranoia.”
Wood’s observations on a form of CEO self-awareness that some dub paranoia was fascinating in relation to the earlier keynote presentation by Kwame Anthony Appiah on honor’s place in business. One way that Wood practices honor in his business is to ensure that Wawa’s six core values—Value People, Delight Customers, Embrace Change, Do the Right Thing, Do Things Right, and Passion for Winning—are so thoroughly woven into the company culture that every employee can recite them; and dozens of times each month, Wawa employees recognize their peers in writing for exemplifying those values day to day. Wood’s leadership of Wawa illustrates the type of professional ethics that Appiah touched on in his keynote speech.
Before closing, Wood addressed Wawa’s next step in its innovation cycle: a move toward diesel fuel. “Two big products are going to disappear,” Wood declared. “One is cigarettes, and the other is gasoline. We’re looking into alternatives to replace a commodity we think will disappear.” To support diesel as the anticipated new market source in fuel, Wawa plans to retrofit its filling stations.
Katie Grills is assistant editor at NACD Directorship magazine.
The sidelines of a football field may seem an unlikely place to look for governance best practices, but the policy implemented to diversify the coaching staffs and senior management of National Football League (NFL) teams—known as the Rooney Rule—has applications far beyond the world of sports. In the second session of the Diversity Symposium that opened this year’s NACD Global Board Leaders’ Summit, Jeremi Duru, sports-law expert and author of Advancing the Ball: Race, Reformation, and the Quest for Equal Coaching Opportunity in the NFL (2011), joined Robert E. Gulliver, executive vice president and chief human resources officer of the NFL, and Cyrus Mehri, co-lead class counsel for some of the most significant race and gender cases in U.S. history, to discuss the Rooney Rule, its impact on the NFL, and the lessons it has to offer companies in all sectors.
Although the NFL formed in the early twentieth century, it wasn’t until 1989 that the league hired its first African-American coach, Art Shell. Over the course of the next decade, a few other African Americans held coaching and managerial roles in the NFL, but diversity remained an issue for the league. Then, in 2002, two African-American NFL coaches with winning records were fired: Tony Dungy, whose team had reached the NFC championship playoffs in each of the three previous years, and Dennis Green, whose team was experiencing its first losing streak in 10 years.
In response, Mehri and attorney Johnny Cochran released a study demonstrating that African-American coaches were statistically more successful because by the time they were hired, these men had already spent years honing their craft in apprenticeship positions. However, African-Americans were less likely to be appointed to higher-level coaching positions and more likely to be fired when their team hit a losing streak. To address this situation, the NFL in 2003 established the Rooney Rule—named for Dan Rooney, who was then coach of the Pittsburgh Steelers, a team that historically had created opportunities for minority players and coaches. The rule requires management to interview minority candidates and give them equal consideration when hiring for particular job categories.
Being attuned to diversity issues is key to attracting the best leadership, according to Robert Gulliver. As a former wealth, brokerage, and retirement HR officer at Wells Fargo & Co., Gulliver might have seemed an odd choice for a role at the NFL, but the skills he developed in the financial sector transferred easily to his work for the NFL. Gulliver emphasized that, in addition to diversity of background, diversity of perspective allows the company to connect more strongly with its consumer base.
One area in which the NFL acknowledges the need for more work is that of gender. While approximately 45 percent of football fans are women, only 30 percent of NFL employees are female. By bridging this gender gap, the league can ensure that thought leadership within the company will better reflect its customers.
What is the lasting legacy of the Rooney Rule? In the decade since the rule was adopted, the NFL has developed a culture in which diversity has become a critical element of creating a sustainable business. NFL clubs that initially resisted the rule now recognize that they would fall behind in the market if they didn’t draw from the broadest possible pool of candidates. The message is clear: make your processes inclusive, and make sure that talent rises up. In short, the Rooney Rule has proved that the more inclusive an organization is, the more it and its stakeholders benefit.
Ensuring that your board is broadly diverse—in every sense of that word—can and most likely is impeded by unconscious biases. The NACD-hosted Diversity Symposium yesterday opened the 2015 NACD Global Board Leaders’ Summit in Washington, D.C., with presentations from Judith Williams, global head of diversity at Dropbox, and former manager of the global diversity and talent programs at Google, and Howard Ross, founder and chief learning officer of Cook Ross, a consultancy that works specifically on inclusion issues.
Google, which lives and dies by data, wanted to understand where bias might exist in key decision-making processes so started its unconscious bias program in 2013. Google researched whether training was effective in helping employees mitigate unconscious bias, Williams recounted. One example: For interview processes, Google developed a tool that would generate questions based on role-related knowledge, leadership, and “Google-y-ness.” Questions such as, “Describe a situation where you went above and beyond to help a colleague” was a better gauge of that quality than asking “Where did you go to school and what is the highest degree that you have?” The question generator also created a rubric for rating the questions so that the interviewer would know what a great response looked like. To level the playing field even further, all candidates were asked the same slate of questions.
The question directors should ask themselves, said Ross, is not “is there bias?” but rather, “What biases do we have that keep us from making choices counter to the values that we say we believe in?”
In a business context, bias comes into play when looking at a candidate’s qualifications for a particular job. Here, the trick becomes looking beyond traditional qualifications that maintain the status quo, venturing out to find new, unique qualities that a candidate can bring to a role. For example, seeking candidates with a college degree is a standard criterion; however, this would mean that talented innovators like Steve Jobs or Bill Gates would never be called in for an interview.
Organizationally there are two things that companies can do to overcome making these snap judgments.
Education. From the top down, everyone in an organization needs to understand the myriad distinctions among people in the workplace and the mechanics of unconscious bias. By keying employees in to how people think results in more egalitarian behaviors across the organization.
Systems and structures: Closely examine company processes to discover how they are susceptible to unconscious bias. For example, look at how are resumes collected and screened. Before they go to a hiring manager for review, could names or other markers be removed so as not to trigger biases? Also, look at where breakdowns in the company’s various systems can and do occur.
Williams also stressed that, when thinking about problem solving, consider who is asking the questions. For example, Google was designing mobile products for state-of-the-art smartphones; however, in developing parts of the world where mobile device use is high, those users are not working with high-end equipment. In other words, Google was missing a substantial portion of a potential consumer base. Now the company operates on the idea that its next billion users are not going to be exactly the same as its last billion users, and figuring out the characteristics of this evolving consumer base requires innovative and free flowing dialog. Business leaders in both the C-suite and the boardroom need to identify and overcome their unconscious biases because if they fail to bring a variety of perspectives to the table, no one will be asking the kinds of questions that will lead to the next big business opportunity.
Jesse Rhodes is the associate editor of NACD Directorship magazine.