Marya Besharov has been teaching the Ben & Jerry’s story for seven years. She focuses her classes on the salary ratio, a policy the company maintained from the early 1980s until 1994 that required the highest-paid full-time employee earn no more than seven times as much as the lowest-paid (full-time) employee.
The policy divided the company’s board of directors. One faction was lead by co-founders Ben Cohen and Jerry Greenfield, who argued that the policy was basic to the company’s three-part mission, which put social impact and product quality on an equal plane with making a profit. On the other side, company president Fred “Chico” Lager and others pointed out that the ratio limited offers for top positions to amounts far lower than at other, similar-sized companies. And the problem was getting worse as the company grew.
The argument captures an enduring tension in all mission-driven organizations, says Besharov, an assistant professor of organizational behavior at the School of Industrial and Labor Relations at Cornell University. “How far do you want to go? Some of the leaders were moderates, believing that profit preceded purpose. The founders wanted to make a deeper point about a new way of doing business, and they were willing to sacrifice to do it.”
Besharov offers three pieces of advice for managers who want to persuade idealists and the capitalists to work together.
- Try to remove ideologies from the discussion and look for programs and solutions that each side will see as a win.
- Look for ways to write social goals as specific policy statements, so that when new managers who aren’t idealistic are hired, they will still have to follow the standards and procedures that reflect the company’s values.
- Lead as a pluralist who sees the value in everyone’s point of view. Don’t take sides.
Her takeaways are also a pretty good summary of how the Ben & Jerry’s board bridged the gap during the company’s 20 years of independent ownership, and they also point to the problems that eventually lead to the sale to Unilever.