Jack London Goes Back to School
CACI Chairman Speaks at Alma Mater
More than 30 years after receiving his doctorate from George Washington University (GWU), CACI Chairman, Dr. Jack London returned to the classroom. This time it was as a guest lecturer at GWU's School of Business. On April 24, 2009 Dr. London spoke to over 120 graduate students, faculty and guests on accountability, corporate ethics and CACI's culture and experiences.
Arranged by the university's Institute for Corporate Responsibility, Dr. London first met with President Steven Knapp, who presented his ideas for GW's future. Following the lecture a small luncheon was held where Dr. London continued to take questions about CACI and his experiences in the government contracting industry.
Dr. London has been a strong advocate of corporate responsibility and governance for many years, and is proud to have been able to bring his message to future business leaders, particularly from his alma mater.
The following is the script from his lecture.
Thank you for having me here today at George Washington University's School of Business. In particular, I would like to thank Prof. Tim Fort of the Institute for Corporate Responsibility for his invitation. And earlier this morning, I had the chance to meet with GW president Steve Knapp. As a proud George Washington alumnus I must say that I am very impressed with how the university has evolved since my time here.
But after what I saw in the papers this morning I am a little concerned about the Business School. Have you seen the headlines? Here's what one article says: "MBA students at George Washington University have been cheating, according to an internal investigation currently under way.
An unnamed GW administration official said Prof. Tim Fort, head of the School of Business' Institute for Corporate Responsibility, was sent an anonymous email informing him of the violation. According to the email, an MBA student was overheard accusing a classmate, "I can't believe you're looking at the answers. That's cheating." The student in question replied, "Only because I'm stuck. I can't figure out what to do next. It's no biggie."
Prof. Fort stated that he was shocked at the allegations, and that the MBA program did not have any cases of cheating in its history. GW President Steven Knapp added that violations of the university's Academic Integrity policies were taken very seriously.
In the meantime, other MBA students have "reportedly" called for the expulsion of the "accused" student. A protest was said to be planned for Friday afternoon."
It's true, isn't it? No? But it's here in all the papers. Therefore, it has to be true. Doesn't it? What if this was a real story that broke in the news today? It couldn't happen to you… or could it?
Do you remember a man by the name of Richard Jewell? He was accused of the 1996 Atlanta Olympic plaza bombings. It turned out the FBI was hasty with its profiling and the media jumped on Jewell for the crime. But none of it was true! And the episode "ruined" his life. Richard Jewell was still in litigation against an Atlanta paper to clear his name when he died in 2007, even though he had been fully exonerated much earlier.
How about the rape accusations against the Duke lacrosse players? It turned out an overzealous DA (by the name of Mike Nifong) decided to make a name for himself, even though the alleged victim's story quickly fell apart. The media thrived on the story. The team had to forfeit its season. Players had to transfer schools. The coach lost his job. But none of it was true.
Do you remember the accusations of Korans being flushed down toilets at Guantanamo Bay? The media had a field day taking the military to task. But it wasn't true. And at least 17 people died in anti-American protests in Afghanistan as a result.
These are just a few examples of irresponsibility with dire consequences by the media. But what about other industries? Surely it couldn't get that bad… could it?
Remember Enron and WorldCom? Those seemed like exceptional cases, until recently. Lehman Brothers, Bear Sterns, just a couple of examples from the world of finance that got it wrong. I'm sure their former employees, creditors and colleagues have many stories about the price they paid for their companies' mistakes.
But as Scottish writer Robert Louis Stevenson once reminded us, "Everybody, soon or late, sits down to a banquet of consequences."
From Enron, to AIG, to the Detroit auto makers – and even companies of smaller size, there have been way too many corporate leaders, who took way too many risks, and took way too much for granted. Some have even come to Washington looking to the U.S. government for a cash bailout/handout. You'd think the U.S. Treasury's doors had been thrown wide open.
And at the consumer level Americans have over borrowed and overspent. It has been sadly amusing to see home buyers and lenders blame each other for mortgages that both sides knew were unaffordable. One might even say they did so 'recklessly' – even without regard for any ides of accountability.
But how does all this affect you?
Well… the U.S. federal budget deficit is set to be $1.75T in FY 2009 and $1.17T FY 2010. We have amassed over $11T in national debt – that's over $36,000 per American. Unemployment currently stands at 8.5% - that's over 13 million jobless Americans. Consequently, there may be some of you graduating next month that will struggle with this job market.
But no one seems to want to take responsibility for all the consequences we now face. That is because our country faces a significant challenge that has been ignored for far too long. And that is the challenge of accountability.
What is 'accountability'? According to Webster's dictionary it is "an obligation or willingness to accept responsibility, or to account for one's actions." (And this may be a concept you have examined in your classes here.)
But let me be clear. It is not the appearance of accountability. It is not the court of public opinion, who will quickly assign guilt, and often despite having no evidence. Accountability is not only during times of crisis. And it is not solely about blame.
Accountability is about accepting our responsibilities, understanding the consequences of our actions and doing the right thing – even when no one is looking. And no one is perfect. We all make mistakes. But ethical behavior comes down to individual choices. So, if you make a good faith effort to do the right thing, no one can ever question your integrity. And as PricewaterhouseCoopers CEO Sam DiPiazza once said, "It has become dramatically clear that the foundation of corporate integrity is personal integrity."
I completely agree with Sam. Because if I have learned one thing in my nearly four decades of business, it is this: Without a solid, ethical and accountable corporate culture, you will not succeed. And by succeed, I mean to continue to grow profitably, deliver quality and be respected by clients and peers alike – year after year.
Why is a company's culture so important? Culture defines shared values, goals and behavior. It sustains focus both on what to do and how to do it. And culture positions every member of the team in the values they need to succeed. It's about
Throughout all the many changes in our industry, we have always relied on our culture to tell us how to respond. In fact, I remember reading Tom Peters' and Robert Waterman's renowned book, In Search of Excellence in the 1980s. One of their eight main themes was to be "hands-on and value driven." They believed that the right values, clearly expressed by leaders, defined the organization. And that action, and not just organizational policies, is what creates a culture of shared values. And why did they think this was so important? Because, "The top companies make meaning, not just money."
A company's culture starts with the personal integrity of its leaders. They must
And here's a story from antiquity that proves the point: The ancient Romans had a tradition. Whenever one of their engineers constructed an arch, as the capstone was hoisted into place, the engineer assumed accountability for his work in the most profound way possible: he stood under the arch. We might say that's putting your "heart and soul" into the issue of accountability!
Over the past 47 years CACI has grown based on a strong corporate culture and a steadfast commitment to "doing the right thing." In CACI's culture, integrity, honesty, fairness and respect are given the same importance as quality client service, shareholder value and career opportunities. In fact, it's because of the strength of CACI's culture that we can provide the best service, returns and opportunities!
Also part of CACI's culture is a long-standing ethics and compliance program. It has been publicly and formally documented since the mid-1980s when I became CEO. In fact, last year CACI's ethics and compliance programs were ranked as one of the best by the Ethisphere Institute. And I am also honored to have an annual ethics award given in my name by the HR Leadership Awards of Greater Washington. And CACI has had very few contractor performance issues in its 47-year history – a fact our people and I are quite proud of, I might add.
So, with a track record like that, how could anyone believe that CACI was anything but a solid company in good standing? Well, let's see?
WHAM-O! In April 2004 CACI was thrust… blasted… into the international spotlight. An illegally leaked army report by MGEN Antonio M. Taguba, given to New Yorker magazine's Seymour Hersh cast, "suspicion" on one of our employees for being "either directly or indirectly responsible" for the mistreatment of detainees at Abu Ghraib prison. At the same time, pictures from the dismal and overcrowded prison depicting the abuses were shown on national television by CBS' 60 Minutes II. It tarnished anyone associated with Abu Ghraib – including CACI. And the whole world knew about it overnight too!
What ensued was a salacious feeding frenzy rarely seen by any company in recent decades. A rampaging media and a hodgepodge of pundits twisted the unsupported allegations of torture and abuse into a guilty verdict without regard for the facts or the truth. The distorted and exaggerated reports created a damning public perception of CACI at the time. We faced wide ranging government investigations and scrutiny by shareholders. Abu Ghraib also made CACI a target for misplaced anger and politically driven criticism. It put who we were and everything we had accomplished – at risk.
Our responsibility was to protect and sustain the livelihoods of our then 10,000 employees, the investments of our shareholders and – most importantly – the vital work we performed for our valued military and government clients. And our well defined culture was our guide in doing so.
The first of CACI's Ten Business Values is "Place integrity and honesty above all else." So, we quickly resolved to acknowledge the Abu Ghraib allegations, but we would not comment on anything that wasn't fact. We also made it very clear that we would not condone or tolerate illegal or inappropriate behavior by any employee engaged on any CACI business. Period! If someone was shown to have broken the law we would respond accordingly to "do the right thing."
We had an obligation to inform our clients, employees and our investors about what was happening. So getting the facts – as best as we could – and setting the record straight was paramount. We used the lessons learned from the Tylenol poisoning crisis in 1982 to guide our actions. In this "medicine bottle tampering crisis" where seven people were killed, one of Johnson & Johnson's corporate guidelines was to "put people first"… to put their customers first! They cooperated with authorities and kept the public informed. And this is what CACI did too.
We developed an overall hyper-crisis management strategy that addressed the various challenges and stakeholders in the crisis.
We first reached out to our employees and clients. Our employees needed to be reassured that we were on the case. Moreover, CACI employees needed to be equipped with the facts so they could brief our clients as needed.
We also assigned key CACI executives to talk individually to some 100 clients with major contracts. We wanted to keep them updated on our crisis response efforts and to answer questions about any potential impact on their projects. It was also important to reach out to our Army clients in Iraq so we could get the facts from the people most familiar with the Abu Ghraib events.
Our strategy also included keeping our investors and industry analysts up to date, as well as pushing back against the errors and misinformation in the media. We launched an aggressive response campaign, and brought in crisis response specialists to augment our efforts in areas where we did not have the experience. We put out many news releases. We set up a FAQ section on our website. And we sent email clarifications to all the reporters who were getting their facts wrong.
CACI was included in nine probing government investigations in all. Our response policy was simple – cooperate, cooperate and cooperate. CACI had absolutely nothing whatsoever to hide and we were as eager to get to the truth as were the government investigators. We also tasked our outside legal counsel with conducting a vigorous internal investigation. And we kept our Board of Directors fully informed.
In the end, none of the government investigations found CACI or any of its employees culpable for the terrible abuses that had occurred at Abu Ghraib. And this was supported over and over again with sworn testimony before Congress. Furthermore, CACI was never even implicated as a contributor during the courts-martial of the Army soldiers who were found guilty of committing the abuses. In fact, five years later, not one current or former CACI employee has ever been charged by the U.S. government with any wrongdoing.
As for the business side, we lost one minor contract in the UK. Our stock price fell some at first, but soon rebounded. We continued with our strategic and technology initiatives and have become twice the size we were in 2004.
Today, CACI is a leading provider of information technology, network communications and related professional services to the U.S. government. We have 12,500 employees who work in over 120 offices around the world. And we will close our fiscal year in June with about $2.5B in annual sales. And just last month Forbes magazine named CACI as the most admired company in Virginia!
No doubt about it, CACI's long standing corporate culture and "ethos" provided the moral compass that guided us through this crisis. Our commitment to quality service to our clients, with honesty, accountability and reliability… and remembering our clients trust in us… were always at the core of our decisions. And those clients and industry colleagues later praised our work in Iraq and the company's response and fortitude in the scandal. Such feedback and support let us know that we had "done the right thing."
This support also led me to conclude that CACI needed to speak out one more time. In April 2008 CACI published a book about our experiences. It's entitled Our Good Name, A Company's Fight to Defend its Honor and Get the Truth Told About Abu Ghraib. Using evidence from official investigations, sworn testimony, and other thoroughly vetted facts, we detailed and documented every challenge the company had faced. And we proved how the allegations made against us were simply not true.
And I want to take a moment to acknowledge two other people that helped immensely with the preparation of Our Good Name
We prevailed at CACI because of our culture and our values, and because of our dynamic and comprehensive push back efforts. But we also learned a few things along the way.
We learned the value of a healthy dose of skepticism, especially when it comes to the media. We learned that big problems can come your way and that every organization needs a crisis response plan. We also found that there is an urgent need to re-emphasize integrity and ethics at all levels. Individuals and organizations. Government and commercial.
And we have seen renewed interest in corporate governance and market regulation as a result of recent economic and corporate turmoil. While a sound legal framework for business is essential and should be continuously improved, we must remember that good behavior cannot be legislated. Cheaters will cheat. Liars will lie. And crooks will be crooks. But if each one of us sets the "good business" example, we can start to restore accountability overall.
An Australian media mogul by the name of Kerry Stokes seems to have summed it up best. He said
"Ethics or simple honesty is the building blocks upon which our whole society is based, and business is a part of our society, and it's integral to the practice of being able to conduct business, that you have a set of honest standards. And it's much easier to do business with someone when you look them in the eye and say, 'This is what we're going to do,' and you understand what you each mean, and you can go away and get it done."
By the way, remember that GW MBA student "cheating" story? Prof. Fort let me know that it turned out the accusation was over a Sudoku puzzle! Nothing even remotely associated with the program. But we never did see a "print" correction to that story… Well, maybe some day!