The MB Interview: Ira Jackson
By Bruce Spitzer
Ira A. Jackson put the “rebel” in rebellious. He is complicated, enigmatic and voluble. Aside from a very brief – what was he thinking? – foray into the deep South, Jackson has been a fixture on the Boston scene for decades, a Brookline boy who made good, a mover and a shaker, a guy who could size you up – and the rest of a Windsor-knotted room – in nary a glance.
I worked for the man for several years. In the interest of full disclosure, I like the guy. When I worked at BankBoston (after the acquisition of BayBanks) he often drove me nuts. But he also supported me in sticky situations including, on numerous occasions, teaming up to face-off against an often adversarial Boston media mob. Jackson is, in fact, a guy you want in your corner when the going gets tough.
He cut his teeth in the volatile administration of former Boston Mayor Kevin H. White and worked with – who taught whom? – the inimitable George Regan, PR pal and confidant to Jackson to this day. A former Dukakite – revenue commissioner, of all things – Jackson has, on and off, been cavorting with the tweedy academicians across the Charles at the Kennedy School of Government. Jackson, a Harvard graduate and now a fellow at the Center for Public Leadership, is a whirlwind of energy and innovation.
This is a man who was often much more obvious than obsequious to his former banking bosses at the First National Bank of Boston and, later, at BankBoston. Often he broke one of the cardinal rules of media relations: thou shalt not be more visible than one’s bosses – even if it’s your job to be visible. Tricky thing, corporate PR. He was just too good at it – the media stuff and community relations. The media either liked Jackson, or sometimes disliked him for being so visible, but couldn’t ignore him.
While at the bank he coined (borrowed?) the phrase, “capitalism with a conscience,” which aptly describes the mission he ingrained into his fellow bankers. The First National Bank of Boston and BankBoston won numerous kudos and awards under Jackson’s stewardship for corporate social responsibility and for community commitments within their First Community Bank. When BankBoston became Fleet and he left, people said, “You should write a book.”
“Profits With Principles” is reviewed independently by James Briand on page 22 of this magazine. Co-authored with Jane Nelson, the book demonstrates why social responsibility belongs at the core of business. It profiles 60 companies that the authors think are doing things right. You’ll want to pay particular attention to the profile of BankBoston. Jackson could be accused of being biased here, but I can attest to the assessments. (But, then again, who says I’m not biased?)
We caught up with Jackson for an interview in the MBA offices at Tremont and Beacon.
MB: We would be remiss if we didn’t ask you for a comment about the further consolidation of the banking industry locally and what you think of it all?
Jackson: It’s a sign of the times, probably inevitable and, certainly, part of a growing national and international phenomenon. On the other hand, Massachusetts still has 220 banks and 250 credit unions which, therefore, means there are almost 500 bank-like institutions in a state of modest size. So there’s plenty of competition, and there’s room for everybody. And there are plenty of consumer choices. That’s not to ignore the significance of the Bank of America acquisition of Fleet ... I’m a sentimentalist ... I was sad to see an institution so richly and deeply invested and committed to the unique culture and economy and communities of this region as BankBoston/Fleet, to see it now headquartered in Charlotte, N.C.
Will that have a consequence? Of course, it will. Is it the end of the world? No, it’s not. Is Ken Lewis [CEO of Bank of America] a smart guy? Of course, he is. Have they made substantial philanthropic commitments? They’ve made a philanthropic commitment of $1.5 billion over the next 10 years – $150 million a year. I don’t know that there’s another corporation in the world that’s made that kind of philanthropic commitment, going forward.
You played a large part in shaping community expectations in Boston of how a bank should act and behave. Where did that come from? Was it intuitive or learned from some other source on your part?
That’s an interesting question and I’m not sure that I know the answer. My hunch would be, it was more intuitive and acquired on the job through hit-or-miss and sort of by muddling along – and by listening and learning – than by coming in with a prescription. I felt strongly that capitalism should operate with a conscience and, with all of the power and wealth and muscle and business acumen that we possessed at BankBoston, that we had an obligation, and also an opportunity, to do the right thing.
What can you tell us about your co-author, Jane Nelson?
Oh, she’s a wonderful woman and added enormous value to our collaboration, in part because she’s from Africa. She is familiar with 50 CEOs of U.K.-based companies – major global companies like British Petroleum and British Telecom.
The title says a lot, but can you tell our readers, in your own words, what the book is all about?
It’s really about a new and emerging trend that is important: values-based management. It’s a book that researches and documents some 60 major, mainline companies that are adopting new tools to adapt to the emerging new rules of the game, and they are becoming the new leaders. And they’re doing it in a way – not perfectly – often quite imperceptibly, but they’re adopting a commitment to not only shareholder value but societal value – what Jane and I call “SVA-squared,” shareholder-and-societal-value-added. What Jane and I do is to profile these companies and their cases and tease out some seven strategies that they are employing, new tools that give them competitive advantage and which reflect a commitment to deliver not only value for shareholders but to do it consistent with values and principles. It’s not the sort of stuff that’s taught in the citadels of capitalism. But we think it’s a big new, emerging trend and we think it’s extremely hopeful. And we hope that the book will be helpful to others who want to master these new tools, to master these new rules.
You were in the corporate game for a long time. As you looked at these companies, what stood out as some of the most surprising things you learned?
I come away with enormous respect for the leaders of these companies who exercise such courage at doing what they intuitively understand to be a smart thing but, at the moment, only looks like the morally right thing.
What do you say to critics who might say that bending over backward to satisfy the desires of so many communities sounds good on paper, but the reality is often harder to accomplish, even unrealistic, with so many stakeholders?
Those are very legitimate concerns but they shouldn’t preclude someone from doing what is necessary and inevitable. Isn’t a business in business to provide products and services? Absolutely. And its ultimate responsibility is to drive a profit; otherwise, it can’t make anything else possible. So this is difficult. And that’s one reason why Jane and I approached this as business disciplines – not as good intentions. If it’s simply good intentions, how do you ever bracket it? How do you ever know whether you’re doing enough? Too much? Well enough, unless you’re measuring it? So, there have to be metrics; there have to be measurements; there have to be rewards; there have to be penalties; there have to be parameters. Is it a slippery slope? It surely can be. Are expectations unrealistically high? They probably are, but companies and leaders who fail to appreciate that there are new rules of the game and they require new tools and management disciplines, are going to do this inexpertly, very ham-handedly, and they’re going to get burned. And even those who approach it with discipline will make mistakes and get singed. But the quicker you approach it with discipline and professionalism and seriousness by incorporating it into the DNA of the company, the quicker you’ll find success.
You articulate very well seven business principles for success and, looking over them, it may occur to our readers that most are quite applicable to banks. But are there some industries where they are harder to achieve?
Surely. I was speaking to an insurance company’s senior management team recently and they felt that not all of these principles were as relevant to them as they might be to British Petroleum or Bank of America. On the other hand they noted it’s conceivable that there are small companies to whom the strategies would apply or more-focused companies for whom these aren’t applicable. I won’t rehash the whole book but I’m sure there are some business skills and acumen that can be applied to some public purpose that would give the community a benefit and also help most companies in the long term.
In the book, you talk about companies that create empty mission statements. How can companies avoid this pitfall and make sure they follow through on their promises?
You know, if you go on eBay, you can acquire Enron’s ethics manual and it’s one of the most exhaustive and breathtakingly comprehensive documents you’ve ever seen in your life. And they were featured on the cover of many business magazines as “most admired,” “most respected,” “fastest growing.” So you can’t legislate morality, but if it’s adopted as a business strategy, if a company is explicit not just in the chairman’s letter in the annual report, if it permeates the management culture, if it’s actually measured – that’s what’s important.
Can you speak about measurement? If it’s relationships that you’re talking about, and if you’re talking about CEOs who tend to be quantitative by nature, how do you measure some of this qualitative stuff?
Yeah, it is one of the most difficult tasks. But I think it also, over time, will be one of the most successful attributes of these companies, because they will develop new strategies, just as Six Sigma wasn’t heard of 10 years ago and yet now GE drives all their business processes through Six Sigma, as does Raytheon and Bank of America. And, you know, you need to go to school to understand Six Sigma. I haven’t been to that school. That’s boot camp.
These companies will develop their own unique metrics which will measure and motivate and manage and reward some of these new skills and disciplines, and that will inculcate and incorporate even deeper into the corporate DNA of that corporate culture – their commitment to doing better … Jane and I cite a number of sources – intangible assets such as reputation, brand equity, intellectual capital, the degree to which a company is innovative. Those intangible assets represent between 50 percent and 90 percent of corporate value and none of it is now measured consistently. It’s not required by GAAP. You won’t find it in a 120-page annual report, but it’s arguably more important, or equally important, with everything that is in an annual report.
Much of what we’re talking about relates to those intangible assets, and companies will figure out a way of valuing and evaluating and measuring and managing those intangible assets because they know that it will drive future value. And that’s what we’re really talking about: a new capitalism that measures and rewards companies that do well by shareholders and who also contribute to society – principled companies that deliver superior value by practicing values-based management.
This interview with Ira Jackson appears in a more lengthy form at www.mass bankers.org