Prof. David Messick
Read what Professor Emeritus Gene Lavengood says about the theoretical issues behind this practice

Practice: David Messick

Improving financial — and social — health
By David Messick, the Morris and Alice Kaplan Professor of Ethics and Decision in Management, and by Kathryn Aiken TMP 2004,director of human resources, general affairs and corporate communications at SC Johnson Japan

More than 30 years ago, Milton Friedman, the doyen of free market economics, wrote that an executive’s duty was to increase the firm’s profits while obeying laws and abiding by society’s ethical rules. (Many modern corporate leaders seem to have misconstrued this obligation to mean that the duty of an executive is to enrich himself.) Implicit in this duty is the obligation to do “good” for either of two reasons: to conform to the basic rules of society, or enhance the company’s profitability. In the first case, duty has nothing to do with profit maximization, but rather the societal constraints on that maximization. Here, Friedman’s dictum tells executives what they must not do — lie to people, harm them or damage their property.

In the second case, Friedman requires executives to do “good” when doing so will increase the health of the firm. Here is how executives at one firm discharged this fiduciary duty while also improving public health.

Asthma is a serious problem for children in many inner cities, particularly in the southern United States. Among Hispanics in Dade County, Florida, the rate of infection can be as high as 25 percent, but good data on the prevalence are difficult to obtain because asthma is considered a possible sign of poor housekeeping. Children with acute asthmatic reactions are, therefore, sometimes diagnosed as having “bronchitis” when admitted to emergency rooms.

How can a brand manager for a product like the insecticide Raid® have an impact on this public health problem? Some data suggest a rather simple causal dynamic.

In warmer climates, cockroaches are endemic. Their droppings can create asthmatic reactions in kids, so parents — especially mothers — tend to be aggressive toward cockroaches. If a mother sees a roach, she may empty a can of insecticide in the vicinity. Children can also have respiratory reactions to insecticides, so this kind of preventive “overkill” is also problematic. If a firm established a program to help mothers understand how to use insecticides appropriately, the roach waste/allergens would be reduced, reducing the incidence of asthma.

SC Johnson’s program “Ninos Saludables, Hogares Saludables” (Healthy Children, Healthy Homes), trains Spanish-speaking volunteers to educate neighbors in techniques for maintaining roach-free homes. SC Johnson cleaning products, rather than Raid®, were used to demonstrate the techniques. The company launched the program May 6, World Asthma Day, and made bilingual presentations, distributing product coupons, samples and informational brochures.

SC Johnson’s partners in this pilot were Research Triangle Institute, an independent, nonprofit research organization, Florida International University School of Nursing, and Zubi Advertising. While all agreed to SC Johnson’s corporate sponsorship of this effort, they excluded specific brand names in the materials to safeguard scientific credibility. A Miami retailer, Winn Dixie, joined the effort by featuring SC Johnson displays and maintaining information tables in their stores.

SC Johnson hired a research firm to measure the program’s impact on the behavior of the parents who had received the training, and track sales results for the firm’s household products. The initial data indicated that many parents changed their cleaning habits and said they would repurchase the products that they had previously been using. There were also significant increases in the knowledge of triggers that worsen asthma.

The challenge now for executives who designed this program is to improve and sustain it. If they succeed, public health will improve and SC Johnson will expand its consumer base while building an innovative peer-to-peer model that measurably affects understanding and behavior change among a target population.

This case, written by Kathryn Aiken for a Kellogg class, is an excellent illustration of managing according to the “Triple P” bottom line — improving profits, aiding the planet and helping people.

Friedman would be pleased.

Read what Professor Emeritus Gene Lavengood says about the theoretical issues behind this practice