Dr. Jerry Davis, Associate Dean for Business + Impact, Michigan Ross School of Business
Jerry Davis received his PhD from the Graduate School of Business at Stanford University and taught at Northwestern and Columbia before moving to the University of Michigan, where he is Associate Dean for Business+Impact, the Gilbert and Ruth Whitaker Professor of Business Administration, and Professor of Sociology. He has published widely in management, sociology, and finance. Books include Social Movements and Organization Theory (Cambridge University Press, 2005); Organizations and Organizing (Pearson Prentice Hall, 2007); Managed by the Markets: How Finance Reshaped America (Oxford University Press, 2009); Changing your Company from the Inside Out: A Guide for Social Intrapreneurs (Harvard Business Review Press, 2015); and The Vanishing American Corporation (Berrett Koehler, 2016).
Davis’s research is broadly concerned with the effects of finance on society, changes in the corporate economy, and new forms of organization. Recent writings examine how ideas about corporate social responsibility have evolved to meet changes in the structures and geographic footprint of multinational corporations; whether “shareholder capitalism” is still a viable model for economic development; how income inequality in an economy is related to corporate size and structure; why theories about organizations do (or do not) progress; how architecture shapes social networks and innovation in organizations; why stock markets spread to some countries and not others; and whether there exist viable organizational alternatives to shareholder-owned corporations in the United States.
Social Activism Showing Up in Social Entrepreneurship: Season 6, Episode 1
Dr. Jerry Davis, professor at the University of Michigan’s Ross School of Business and associate dean for Business Plus Impact, is finding more ways for business to contribute to social betterment. Information and communications technologies now make corporate activities very public, and in turn, force companies to understand their values and what they stand up for. Dr. Davis believes activism should be encouraged, as risk taking, innovation, and passion can serve the businesses’ interests.
Listen to our conversation on how social entrepreneurship and social activism combine in powerful ways!
Listen to more: Activate World
Social Activism Showing Up in Social Entrepreneurship
Dr. Jerry Davis, Associate Dean for Business + Impact, Michigan Ross School of Business
Jon Mertz: 00:03 Welcome to the Activate World podcast, a series on how business leaders have more power to solve societal issues than any elected official. We explore business activism with substance and depth of thought.
Jon Mertz: 00:20 In our current podcast season, we’re exploring the dynamics of social movements and change within corporations. CEOs and employees are taking on a wide range of social issues including immigration, gun control, LGBTQ rights, climate change, and many others.
Jon Mertz: 00:34 Today, Dr. Jerry Davis from the University of Michigan is joining us. Dr. Davis, welcome to Activate World.
Dr, Jerry Davis: 00:40 Thanks very much Jon.
Jon Mertz: 00:42 So before we get into these issues, Dr. Davis, give us a snapshot of your background and focus area, especially as it relates to the intersection of business and society.
Dr. Jerry Davis: 00:51 Sure. I’m a professor at the University of Michigan’s Ross School of Business. I’m in the management and organizations department and I’m also the associate dean for Business Plus Impact, which is a new role created two years ago to try to elevate the conversation around business and find more ways for business to contribute to social betterment broadly. And so, that includes things like creating an impact studio to translate faculty research into practice, outreach to other schools on campus, doing work in Detroit on economic development, working with nonprofits. It’s a pretty big portfolio of activities that we’re doing here.
Jon Mertz: 01:31 And how long ago did the Business Plus Impact begin?
Dr. Jerry Davis: 01:35 We started that two years ago, and so I have another year in my associate dean ship and we’re launching some pretty exciting things. I’m also involved in some extracurricular activities with associate deans and deans and journal editors at other schools trying to find a way to pointe business research more in the direction of solving big societal problems. Your topic today is really timely for me.
Dr. Jerry Davis: 01:59 I also have to say, I wrote a book four years ago with Chris White called Changing Your Company from the Inside Out, A Guide for Social Intrapreneurs. It’s very topical for this question about activism towards social good. And our goal with that book was to try to equip people who find themselves working at a company where they don’t necessarily agree with everything, finding ways to lead social innovations within their company and drawing on the insights of social movement theory to try to help employee activists, figure out how do we green our supply chain? How do we make sure that there is no untoward labor practices going on? How can we launch products or services that serve a goal beyond profit? That’s been a fun journey. We taught a class on this topic for the last eight or nine years and it’s spread to a few other universities as well.
Jon Mertz: 02:51 Give us your perspective on some of the underlying forces that you’re seeing drive this change towards more CEO and employee activism.
Dr. Jerry Davis: 02:58 Yeah. I’d say one of the biggest things that’s changed everything in business, really, is the digital revolution and changes in information and communication technologies. It used to be that things could take place in a company and not necessarily make it onto the front page. There would be ways to cover it up. But now if companies are engaging activities that they shouldn’t be it’s going to become public. Or if people have grievances about a company, either they were mistreated on an airline, they are mistreated by a cashier, that is going to become public.
Dr. Jerry Davis: 03:37 And the same thing is happening within companies. So nothing really stays private anymore. And that means that companies really need to be pretty rigorous about how they behave. They have to really stay consistent with their values or it’s going to become public.
Dr. Jerry Davis: 04:47 It’s like, wow, that is something we have never seen before. And so, within two weeks he was gone. So that’s just something remarkable that you wouldn’t have seen 20 years ago or even maybe 10 years ago; that information and communication technologies makes everything public in some sense.
Dr. Jerry Davis: 05:06 And the flip side of that is that the technologies also make it much easier to organize and to form groups and to call a boycott or to call a walkout or to have a strike. It’s really had this tremendous sort of shaping effect on activism.
Jon Mertz: 05:24 So is there a generational shift happening that’s making these types of activists demands on companies more prevalent?
Dr. Jerry Davis: 05:30 Yeah, very much so. It’s a great catch, Jon. We have seen this a lot. Once the millennials started filtering into business schools, one of the first signs of this to me was around 2010. I was teaching a class and said, “Wait, six of the guys in this class has beards.” And for my first 20 years of teaching in a business school, you never ever saw men with beards unless it was for a religious purpose. Now all of a sudden, tattoos and beards. Hey, this is different.
Dr. Jerry Davis: 05:59 That sensibility … That was sort of a trivial example, but it did signal something. And you really see this in business schools in the recruiting sessions. If you look at professional service firms, consulting firms, accounting, technology, when they’re trying to recruit valuable talent, they really need to appeal to their values and to the values of the students that they’re trying to recruit. When they give their presentations, they’re pretty front and center about, well, we’re in a lead certified headquarters. You can bring your dog to work on Friday. We have domestic partner benefits for LGBT employees and it’s become pretty standard that if you want to recruit millennials, you have to abide by certain social values. I think that’s part of what we’re seeing behind the employee walk out in November at Amazon. Some of the other forms of activism that at Microsoft and Google and Facebook is that millennials really want to live their values and they’re pretty good at being vocal about it.
Jon Mertz: 07:04 I’d like to go back to the idea of using digital media to organize. We see CEOs using digital media to promote certain issues and employees using it to hold CEOs accountable. How do you see that balance from a CEO perspective?
Dr. Jerry Davis: 07:18 Yeah. To be honest, that was not one that I saw it coming. I’ve been writing about this topic for a good while, but to see CEOs personally coming out and making political statements that could be considered controversial or that could be seen as … That some of their customers might take to be offensive. That felt really new.
Dr. Jerry Davis: 07:42 I think for Mark Benioff, his workforce … They’re in San Francisco, their workforce is largely in the bay area. They’re a pretty vanguard company and he has so much influence over it that feels like he might get a bit of leeway on that.
Dr. Jerry Davis: 07:58 Similarly, for Howard Schultz at Starbucks, he’s so identified with that company that he might be given a bit more leeway than the average CEO.
Dr. Jerry Davis: 08:10 One of the incidents I found really fascinating was when the Arkansas legislature passed what was essentially an anti-LGBT bill, similar to the one that happened in Indiana when Mike Pence was governor, that would allow businesses to discriminate against LGBT customers on the basis of religious liberty. The Arkansas legislature passed this bill and the CEO of Walmart tweeted, “We’re calling on the governor to veto this bill because it violates what we know as a company about the importance of inclusion, diversity, and equity, and we respectfully urge you to veto this bill.”
Dr. Jerry Davis: 08:49 Now, that was not someone whose last name was Walton. That was a normal CEO of largest employer in America saying, “We want you to take this bill back because it’s violating some important principles.”
Dr. Jerry Davis: 09:04 That really, to me, felt like a sea change. It wasn’t the founder, it wasn’t someone whose name was on the door making this assertion. And it feels both new but also inevitable that if you can’t keep what happens within the company private, then you might as well own it. You might as well figure out what are the stand that we’re going to take? What are the values that we’re going to stand up for? And just own that. Not be caught by surprise, not wait until a tweet storm comes about because of something one of your cashiers did. To basically own that and be upfront about it.
Jon Mertz: 09:42 Can you tell us a bit about how social activism and social entrepreneurship fit within a company?
Dr. Jerry Davis: 09:47 Yeah, so there have been intrapreneurs in companies from the beginning of time; people that have a skunkworks operation where they work on a clever product or some new way to use the company’s resources. The idea of a skunkworks or an intrapreneur instead of using the company’s resources to create new products or services, that’s been around forever. I mean they often get repressed by the corporate antibodies if they’re doing something that’s not gone through the normal approval process. But it’s something that we kind of celebrate the idea of intrapreneurs.
Dr. Jerry Davis: 10:22 What’s different about social intrapreneurs is that the purpose of what they’re doing may be a product or service, like trying to serve underserved communities. Say, people with precarious incomes or reaching communities that you hadn’t reached before. But they also can pursue initiatives like better relations with the community and pursuing social justice activities that are outside of the company’s boundaries.
Dr. Jerry Davis: 10:49 An example of this would be at Ford Motor Company. We had a lovely man, Dave Berdish, come speak to our class several times and part of his role was helping Ford Motor Company create it’s human rights policy around the world. And one of the things that was really important to him was that access to fresh water was going to be recognized as a human right in that policy. And that might sound trivial, but they operate in some very water constrained environments in Armecio, Mexico, in South Africa, and India. And so, this wasn’t a trivial or symbolic thing. This was a policy with teeth that they were going to operate in a way that preserved local access to fresh water.
Dr. Jerry Davis: 11:31 That’s not a product or service. That’s saying we want to make sure that we’re doing right by the communities we operate in and so that feels a bit different. That’s bringing social values to bear on what the company does.
Dr. Jerry Davis: 11:43 Walmart, which has now become one of my heroic stories, which I wouldn’t have expected coming into this profession, but they’ve been really good about greening the supply chain and working with their suppliers to reduce their carbon footprints. That can be a form of intrapreneurship and it’s not a product or service, but it’s really changing the way that they operate.
Dr. Jerry Davis: 12:06 And similarly, the way that you treat employees or the way that you recruit employees. I have a friend who is a CEO and founder of a company, Cascade Engineering, in Grand Rapids, Michigan. And one of his passions was to make it easier for returning citizens, people who have served their time in prison, to be able to get jobs. And he was a big advocate for something called Ban the Box, getting rid of that box on an application form that says have you ever been convicted of a crime? And he was an activist. Within his own company it was easy, but he also did this with other employers in western Michigan.
Dr. Jerry Davis: 12:42 All of those are things that feel more like social activism and less like creating ranch flavored Pringles or creating an internal product.
Jon Mertz: 12:56 And how do you view that as it relates to corporate social responsibility departments or other programs within companies? Is it just a new take on corporate social responsibility? Or is it something different than what we’ve seen in the past?
Dr. Jerry Davis: 13:08 That’s a great question, Jon. Thanks. My own take on this is that CSR, corporate social responsibility feels like an optional extra; that it’s something you do outside of the normal course of business. It might be charitable giving or employee volunteer days, something like that. It can all be a good stuff.
Dr. Jerry Davis: 13:29 The things that I have focused on are more like changing core ways that you do business. Changing the products that you offer, changing the way that your operations work with respect to the environment. It feels like intrapreneurship as we view it as more focused on the core operations of the business – finding new kinds of customers, recruiting different kinds of of employees and making them welcome, allowing them to do their best work. That feels a bit different than than CSR, which to a cynic or a skeptic could look like window dressing.
Jon Mertz: 14:07 Right, so the greenwashing approach versus the real change approach.
Dr. Jerry Davis: 14:10 Yeah.
Jon Mertz: 14:11 What we’re seeing now with employees trying to change the company from within. Is that actually good for a company? I mean do CEO’s enjoy getting those petitions or getting called out on some of these issues?
Dr. Jerry Davis: 14:21 The situation that tech firms are in is really interesting. If you’re the Ford Motor Company, you’ve got long lived assets. You’ve got factories in equipment and if some employees are unhappy you might be able to swap in other employees and train them up. There is a tradition of doing that in manufacturing.
Dr. Jerry Davis: 14:45 In a standard service job, people are easily trained. You might be able to swap in new employees. But the thing about tech firms is they do not rely on long lived assets. The server farm is not the core of what Google is all about. It is the coders and the people that have rare and valuable skills.
Dr. Jerry Davis: 15:05 To get a sense of this, I learned recently from some disclosures that the median employee at Facebook makes $240,000 a year. These are not fungible employees. You need to keep them happy. You need to keep them engaged in the work that they do. They are the assets of the firm. Their skills, their relationships are … Plus some IP of course. But your talent really is the firm and so I don’t think that it’s an option to ignore it or to repress it. And if a significant portion of them say we will not work on this kind of business, management has to take that really seriously. And I would say that might be less true at Taco Bell.
Dr. Jerry Davis: 15:58 That’s an intriguing thing that we really haven’t seen before. And what’s interesting about it is that it’s not a strike around standard labor issues. They’re not forming labor unions. They’re not militating for higher wages. They might be militating for equal wages between men and women or better treatment of temps, vendors and contractors. But that’s a really different thing from the standard labor issues. And all of this feels sort of both new and exciting and who knows what’s gonna come next? I mean, I got my popcorn waiting.
Dr. Jerry Davis: 16:32 What would be your advice to a CEO on embracing versus battling the issues employees are calling them out on?
Jon Mertz: 16:38 Yeah. At the broadest level, you want innovation. You want employees to be proactive; to come up with new ideas. You want passion. All of those are a good thing. I think that the activism we’re seeing are forms of innovation and passion and people pursuing things at personal risk. I mean companies want risk-takers and innovators and passionate people. In some sense, you don’t want to say, “Go back to your cubicle. Put on your mask.”
Jon Mertz: 17:07 You want to encourage those traits that go along with activism and you also want it oriented towards things that serve the businesses interests. If this energy is saying, “Here’s something changing in society and we as a business need to take this on, we need to find a path forward.” Your grassroots employees are going to be much more in touch with what the real world thinks about this; what the customers are thinking, what their peers are thinking. I mean they’re antenna out there in the world telling you what’s and which direction; what you need to be thinking about and which direction you want to turn. And it’s really easy for people in the executive suite to live in a bubble; to not hear bad news, to not hear what’s going on, on the front lines. And so social activism is really a way to be more attentive to what’s going on in the broader world.
Jon Mertz: 18:10 In some sense you’d rather have your employees telling you, “We don’t want to be doing business with agency X.” Or, “We think it’s … We need to treat the temps, vendors and contractors more equitably.”
Jon Mertz: 18:22 You would rather hear it from your employees than have a giant boycott or to have your customers turn against you. In some sense they’re doing this because … I work at Google. That name is on this part of my identity that I care about the company’s future. So in some sense you want to be able to enable that as a way to gather intelligence, to bring new ideas in, to get, like I said, the passion, the risk-taking, the innovation.
Jon Mertz: 18:53 There is certainly going to be a line, but I don’t think any of these employees have reached it yet. I think enabling activism is a good way to stay on top of what does the world outside thinking about? Not just what am I getting from other executives or CEOs when I go to Davos? This is getting you in touch with what’s going on on the ground.
Jon Mertz: 19:16 From an employee as well as a CEO perspective, is there a healthier way to have a dialogue around issues that may be more controversial so that both sides can be equally heard?
Dr. Jerry Davis: 19:26 Yeah. That is definitely … The $64,000 question in this case is how do you manage your workforce where people have really diverse political views that aren’t going to stay at home?
Dr. Jerry Davis: 19:41 If the company is going to take stances on things, you could imagine saying, “Well, wait a minute. No, I really strongly disagree with this.”
Dr. Jerry Davis: 19:50 I can imagine that there were employees at Mozilla that said, “Wait a minute. I also opposed that bill. “I could imagine there’s employees at Starbucks that said, “I don’t want to talk about race.”
Dr. Jerry Davis: 20:04 I think this’ll be an intriguing time to see … If I were in an HR department, this would be something I’d be thinking about right now is how do you convene respectful dialogues on these really controversial issues in a way that allows people to be heard and not feel that they’re getting steamrolled?
Dr. Jerry Davis: 20:25 And I’m again gonna highlight my friends at Cascade Engineering for being really thoughtful about this when it comes to race issues. They’re just really good about having very honest, open conversations about issues that can make people really uncomfortable.
Dr. Jerry Davis: 20:42 It would be intriguing to know are there people at Nike headquarters that are really mad about Colin Kaepernick being the brand spokesman? I mean, are they alienating people that work there? My guess is no because they probably weren’t working at Nike in the first place. In some sense they might’ve gone to work for Under Armor instead where they might get a different perspective on things.
Dr. Jerry Davis: 21:06 What you said about red companies and blue companies, that seems like a very plausible guess about what might happen in the future. That if companies are going to be taking over political stances, they might end up writing off some kinds of employees. They might be unable to recruit certain kinds of people because it just doesn’t fit with their values.
Dr. Jerry Davis: 21:28 You can go right now to a website to find out all of company’s employees political contributions and whether they were red or blue and companies get ranked by the proportion of their contributions that go to Democrats and Republicans so this is really accessible information. If you’re thinking about working for a company, you look up their PAC contributions and say, “Wait a minute, that’s not my direction.” Or you look up the CEOs contributions and say, “Oh, they supported that? I’m out.”
Dr. Jerry Davis: 21:59 You could imagine a process where over time people tended to migrate to red companies or blue companies. I don’t think we’ve seen a lot of that yet, but it’s not hard to imagine that happening given our current political polarization and the availability of information.
Jon Mertz: 22:18 Yeah. It’s interesting because it seems like having conversations around these issues within a company, it’s not to change everybody’s opinion one way or another, but really to raise understanding around an issue and to encourage sharing not only just about social issues but even business ideas.
Dr. Jerry Davis: 22:33 Yeah. And even to create some kind of informal or maybe formal channel to register opinions about should we be doing this kind of business. I mean, you’d probably rather know before you bid on a contract. Wait a minute, our coders are not going to be happy working on these virtual or augmented reality headset for battlefield use. Better to know before rather than after you’ve committed to fulfilling that contract.
Dr. Jerry Davis: 23:00 And the tools are actually already out there. You could have slack channels created for exactly these discussions. You could be setting up sort of Loomio sites to allow people to, have a respectful back and forth. Could have them moderated conversations, have some clear ground rules about what’s respectful and what’s not going to be tolerated in that setting. You’ll end up having a really nice archive in discussion about what are people making of this? Is there one strong opinion or is there a division? Is this going to be a problem for us? That’s much easier to do now than it used to be a few years ago.
Jon Mertz: 23:41 Do you have any predictions on how you see CEO and employee activism continued to unfold? And what excites you most about how the role of business is changing within our society and being a voice for issues of social importance?
Dr. Jerry Davis: 23:53 Yeah. I have to say that as a researcher, I find this incredibly exciting. I just completed a paper yesterday on this topic and as a social observer, it’s like, wow, we’ve never seen this before. Like I said, I got the popcorn made to see what’s what’s coming next.
Dr. Jerry Davis: 24:12 But I think one thing that I’ve observed is it’s really difficult for companies to avoid the political. That they might hope to just keep their head down and keep doing what they’ve always been doing. But a lot of these things come at you and you had not expected it at all.
Dr. Jerry Davis: 24:33 After the Parkland shooting, there was a website that posted the logos of about three dozen ` that offered special deals for NRA members and said, “Hey, look at this list of companies. Maybe we should boycott them.” And within 48 hours, two dozen of them had caught off those deals. That’s fascinating.
Dr. Jerry Davis: 24:55 And one of them being Delta, Delta Airlines. At the time the, the Georgia state legislature was considering a big tax break for Delta. And after Delta pulled it’s discount for NRA members, the bill got pulled and arguably cost them $10 million. Wow.
Dr. Jerry Davis: 25:15 This is one of those settings where there aren’t going to be easy answers; where there’s not going to be the obvious choice. But the one thing I’d suggest is be prepared. Be clear on what your values are, what you’re gonna stand up for. And it’s better to think this through in advance rather than be blindsided by events.
Jon Mertz: 25:35 To wrap up, I think it’s been the past eight years you’ve been doing a class on business impact and intersection of business and society. As you’ve seen different students go through that class, what changes have you seen in the tenor of the conversations?
Dr. Jerry Davis: 25:49 I love that question because when we first started this class in 2011 we said, “You know, intrapreneurs within companies are a lot like social activists operating in social movements.” And the students looked at us like, “What?” Like, “Oh, right. That’s kind of a fun analogy. But the seriously is that a real thing?”
Dr. Jerry Davis: 26:12 And now it’s like, “Well obviously. Of course they’re like social movements. I mean, look at the tactics that they’re using, look at the issues if they’re taking on.”
Dr. Jerry Davis: 26:22 This might just be me feeling smug, what had been kind of out there and nonobvious stuff now just seems taken for granted that of course employees are going to act like activists. Of course you’re going to advocate for your values at work and that you’re going to use the same kinds of tactics that indivisible or the tea party or whatever your favorite social movement is. Of course you’re going to use those at work. It’s like that’ll tell us how. So we don’t have to argue about the premise. This is a lot like a social movement.
Dr. Jerry Davis: 26:57 Now, it’s more about the gritty details and what distinguishes the successful from the unsuccessful activists. That, to me, feels like a bit of a moral win. I have to say the first time we did this class in 2011 we had a student activist. And the first time in class discussion he used the phrase marriage equality. I thought, oh. Ha, I’ve never heard that phrase before. That’s very interesting. Marriage equality. Well, that’s never going to work. I could see so much social opposition to that. But what an ingenious way to frame things, if you call it same sex marriage, that that sounds contentious. Marriage equality, that sounds like a winning framing. And now you look back and say, “Obviously. Marriage equality. Come on.”
Dr. Jerry Davis: 27:45 There’s nothing controversial about that. It’s just intriguing to see the things that go from being vanguard and exotic to being obvious a few years later.
Jon Mertz: 27:56 Yeah. And that’s the value of social activism and social entrepreneurship.
Dr. Jerry Davis: 28:01 Yeah, exactly so.
Jon Mertz: 28:02 Well, Dr. Davis, I really appreciate your time and more importantly, the work that you’re doing in equipping future business leaders through your programs. And I think Changing Your Company from the Inside Out is a book that will become even more of a must read for business leaders.
Dr. Jerry Davis: 28:15 Thanks very much, Jon. I really enjoyed talking to you and I love the podcast.
Jon Mertz: 28:18 Thank you. That means a lot.
Jon Mertz: 28:28 Activators, let’s continue the conversation in our Activate World LinkedIn group. We look forward to hearing your thoughts and perspectives.
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Special thanks to Kaela Waldstein and Kent Nutt. Music by Jason Goodyear. For Activate World, I’m Jon Mertz.