Collaborative Leadership: Lessons for the Future, October 9, 2003

Warren R. Staley - Chairman and Chief Executive Officer, Cargill, Inc.

Leadership is much on peoples’ minds these days. In part, this is because of obvious failures in leadership, like the corporate malfeasance we have heard so much about recently. In part, this is because of the positive difference good leadership makes, such as the many contributions Ken Dayton made to our community or Carol Johnson has made to the Minneapolis school district. And in part, it is because most of us sense that leadership traits are often the same across different kinds of organizations.

So, I understood why those who invited me to speak thought leadership would be an interesting topic. As the head of a large and successful global business, I have firm beliefs about the leadership traits I need to bring to my work as CEO at Cargill, and I think they can apply to other institutions and organizations as well:

But what intrigued me most about today’s luncheon topic was this notion of “collaborative” leadership. It’s almost an oxymoron. To collaborate means working together; it’s about teamwork. To lead conveys being front and center; it’s about orchestrating the effort.

So, what can we make out of this idea of collaborative leadership? I’d like to look at the concept through three prisms: first, my experiences in managing Cargill’s recent transformation; second, Cargill’s philanthropic focus on education; and finally, the challenges facing today’s leaders in public education.

Managing Change at Cargill
Cargill began nearly 140 years ago as a country elevator, sort of your classic local business.

Over time, we followed midwestern grain into national markets on the coasts and then on to international markets. We also followed grain up the value-added food chain. So, by the mid 1990s, we were a global agrifood company, spanning much of the food chain and with even a few non-food sectors, like steel, deicing salt and financial markets.

Though we had matured dramatically from our roots in grain trading, the world around us was changing at an accelerating pace. We found ourselves largely a transactional commodities company operating in an increasingly knowledge-based, value-demanding, customer-oriented marketplace. In 1997 a Cargill senior management team was asked to review our strategy.

The team concluded that we needed to become more focused in order to lead change rather than merely react to it. We needed to make some fundamental and far-reaching decisions. Three stand out for our conversation about collaborative leadership:

I don’t have the time – and you probably don’t have the patience – to go through the hundreds of steps in the transformational journey Cargill has been on since 1998. But let me mention some of the high level answers we came up with in the above three areas.

Our purpose. We decided that the core of what attracted people to Cargill was “to be the global leader in nourishing people.” The word “nourishing” reflects our agrifood business focus, but it also extends to other things “necessary for life, health and growth,” including the idea of helping enrich the communities in which we operate.

If “nourishing people” is our fundamental reason for existing as a company, we also needed to articulate a clear, more immediate goal for harnessing the efforts of our 100,000 employees.

We called this our Strategic Intent, and it set the mark for what we want to become over the next decade:

By the year 2010, Cargill will be the recognized global leader in providing agrifood chain customers with solutions that enable them to succeed in their businesses.

With our purpose and goal set, we began the difficult work of reshaping Cargill’s culture.

We conducted a global culture scan involving focus groups with over 1,000 employees and other stakeholders. We learned that Cargill was well respected for its integrity, hard work and drive to succeed. But we also discovered some negatives associated with our culture as a large, remote, inward-looking company.

Anyone who has tried to change an inherited culture while continuing to operate successfully knows how challenging our task was. But we were clear about the attributes we wanted to promote – to be trustworthy, creative and enterprising. And we focused on the behaviors we wanted to encourage:

We also were clear about how we were going to evaluate our performance – through four carefully chosen measures: “engaged employees, satisfied customers, enriched communities and profitable growth.”

Everything begins with engaged employees – getting the right people into the right positions and then energizing them in pursuit of customer solutions. From engaged employees would flow both satisfied customers and enriched communities, since engagement is about both good business and good citizenship. “Profitable growth” is what would fall out from achieving the other three.

We firmly believe that the right behaviors produce good results, not the other way around.

Having the right goals and the right behaviors laid the foundation for reshaping our business portfolio. It has enabled us to sell over $2 billion of assets in areas where we didn’t feel we could be a leader and to make the two largest acquisitions in our history. But those are just the most visible changes.

We also reorganized from a dozen divisions into some 90 individual market-facing business units to put accountability squarely on our business leaders who were closest to our customers.

We’ve doubled and redoubled our research budget to grow our knowledge capabilities and innovation. And we’ve brought new skills into the organization through joint ventures, acquisitions and hiring people with skills Cargill didn’t possess.

So, what does this story of change management at Cargill have to do with collaborative leadership? Well, I think it helps concentrate attention on key elements: lead with vision; develop and foster a shared mindset about purpose and goals across your organization; link culture and behavior to get everyone engaged; and focus on behaviors that drive performance to get the results you seek. These are the key building blocks. Only when they are solidly in place are you ready for remaking the organization.

Cargill’s Focus on Education
Now, let me change gears and also pick up the pace a little.

About the same time Cargill was beginning its strategic intent journey, the Cargill Foundation decided to re-examine its philanthropic practices.

I have had the good fortune of watching this change as chair of the Foundation. Perhaps like many corporate foundations, the Cargill Foundation historically had made literally hundreds of relatively small grants across a broad spectrum of causes, with little systematic sense of what was working.

Over the course of 18 months of study, the Foundation Board concluded that it wanted to replace this shotgun approach with a laser-like focus on “educating socio-economically disadvantaged youth in the Minneapolis area.”

We chose a highly focused goal because we wanted our grantmaking to:

(1) make a measurable difference in experienced outcomes;
(2) test new ideas; and
(3) develop solutions that could be models for others.

We knew that we were not experts in this area.

So, we used our transition time meeting with community experts in early childhood development, education and the changing profile of our community. The many community leaders we met with had a wealth of practical experience they freely shared with us, and we are deeply indebted to them.

Among those who helped were: Joe Nathan at the Center for School Change, Howard Mizell at YMCA, Emmett Carson at the Minneapolis Foundation, Carol Johnson, and a host of people involved in both public and charter schools.

From their counsel we drew several conclusions.

First, we need to focus on early stages in the educational process before performance gaps become too large to bridge with almost any kind of intervention.

Second, we see many kids who require more attention than just in the classroom: with the challenges they face at home, with English as a second language, with the absence of good role models, and with a host of other concerns that are simply mind-boggling.

Third, we recognize the need for finding and developing relationships with good partners; we are the supporters, not the doers.

As a result, we are supporting a number of interesting programs that we feel are making a meaningful impact on the lives of children who fall within our focus area. For example:

We also have initiated some interesting programs on our own involving collaborations with first-rate partners:

Finally, perhaps our most ambitious – and risky – initiative is “Cargill Scholars.”

This is a five-year, $5 million collaboration with the Neighborhood Improvement Program and Big Brothers/Big Sisters that makes an intensive effort between fourth and ninth grades with 50 “at risk” students through a variety of mentoring and other enrichment interventions.

Overall, since we began this educational focus in 2000, we have invested roughly $12 million, substantial time from our Foundation staff, and hundreds of employee volunteer hours to help prepare the next generation for school, work and life. By pairing these resources with good teachers, we are making a difference.

And I know first-hand how important teachers are to this equation – my mother, sister and wife were all part of this most honorable profession. And I am here today, thanks to the impact several teachers had on me.

Again, reflecting upon lessons to be learned for collaborative leadership, the Cargill Foundation focused its efforts around a shared vision and purpose and then realigned its giving portfolio from 150 grantees five years ago to barely 30 programs today to have more impact.

For many socio-economically disadvantaged youth, the paths they must travel to achieve success are incredibly steep and difficult.

But, by looking for strong, committed leaders with clear goals and a commitment to measuring performance, we have found programs that are succeeding, people and agencies out on the educational front lines doing great work and incredible opportunities for companies and other community institutions to expand their involvement.

After all, we will be the principal beneficiaries of a healthier, better-educated workforce and citizenry.

I wanted to mention one example of what I think is a model for concerned involvement – what Win and Maxine Wallin are doing through their family foundation. They are providing about 190 scholarships to help low- and middle-income kids in the Twin Cities attend college.

Long before I got to know them, I wrote them a letter congratulating them on their effort. And, there is room for others to join in. Their daughter, Rebecca Wallin, met with our Foundation Board last month and told us that many qualified kids still end up without the needed financial assistance for college.

Moreover, significant additional support is needed to enhance their prospects for success once they start college, as many are forced by economics, lack of preparation or other barriers to drop out before they finish. So, the Wallin foundation is actively looking for other partners to join their scholarship efforts. Clearly, there are many ways open for some collaborative leadership in addressing community educational needs.

Leadership Challenges in Public Education
Which brings me to my last point: the significant leadership challenges facing Minneapolis and other public education systems today. First, however, I want to thank Carol Johnson for her dedication and commitment these last six years.

Carol met several times with our Foundation and was always available and informed, when we wanted to talk about an initiative.

We all have a huge stake in seeing that the public education system succeeds.

As just one example, more jobs in the future will require at least a college degree, yet the prospects for today’s student mix to complete college are actually declining. As a community, we can’t afford to let such gaps open up.

Again, drawing upon something Carol said in her last “Carol’s Corner” newsletter, “it’s not about us, it’s about our contribution to building potential in our community-at-large. We have a “collaborative responsibility” to overcome the challenges facing public education.”

So, what might such collaborative leadership look like?

I believe it starts by leading with a vision. It requires developing a shared mindset around our goals.

What are the basic standards we want to see met? What kind of public system are we willing to support and invest in?

Then, we need to engage our teachers and school leaders in pursuit of those goals. We should expect high performance and hold them accountable. We need to put responsibility for results as close to the customer – in this case, the student -- as possible.

And, we need to invest in the kinds of training and curricula most likely to achieve the results we seek.

Finally, we must realign our portfolio of educational offerings to meet community expectations.

That will take investments in expanding our skill base, a willingness to explore new solutions for complex issues and a commitment to measure our performance and make needed course corrections.

All of that is challenging. But I believe the business community is prepared to offer more than best wishes.

I believe it is prepared to engage in collaborative leadership.

When you consider the demographic changes taking place in our communities, the need for keeping the Minnesota economy vital, the demands on Minnesota to compete in the global marketplace, and the impact education has on the overall quality of life in our communities, it is simply the right thing to do.