Meeting Activists Halfway

By Marshall Loeb

John Diebold spreads a week's worth of Wall Street Journals on the thick blue carpet of his Park Avenue office and jabs a forefinger at story after story. The headlines tell the real news about business today. They speak of all the new ethics rules, the multiplying Government regulations, tire recalls, affirmative action programs and the demands of environmentalists, feminists, unionists, minorities, politicians, employees, shareholders. Diebold makes his point: the rising demands of society are forcing businesses to respond and change.

Diebold has earned a fortune promoting corporate change. Having coined the word automation while he was writing his M.B.A. thesis at Harvard, he set up a consulting firm when still in his 20s. He advised businesses how to deal with computers, opened offices of the Diebold Group around the world, wrote four books and was decorated with numerous honorary degrees and princely medals. Now, still boyish looking and wide eyed at 52, he has signed up 22 blue chips that pay his company fat fees to learn how to cope with change in society.

His customers include the likes of A T & T, IBM, GE, INA, Alcoa, Mead, Singer, Monsanto, Borg-Warner. Eight times a year their top powers--chairmen, presidents or vice presidents --get together for a day in Diebold's offices. In these meetings they exchange information on how their own companies are trying to anticipate and respond to the many minirevolutions in the country. Diebold preaches a message: "Don't wait for the activists to come forward. Go out and meet them at least halfway, and maybe more than that."

At Diebold's sessions corporate chiefs study the successes of other businesses in dealing with public issues and outside pressures. They look at the case of the food companies that set up the Food Safety Council, enlisted the help of a ranking aide to Ralph Nader and now mutually work to agree on a list of food products and additives that everybody could consider safe--before going to the great trouble and expense of putting them on the market. Diebold also has his clients study the National Coal Policy Project. Companies that mine and use coal formed it with environmental leaders, and together they reached productive compromises to speed the digging and burning of coal. Similarly, Diebold's clients ponder the example of Pennsylvania Power & Light and Canada's Ontario Hydro. Before building a power plant, they solicit citizen volunteers to examine a number of sites and pick the one that seems the most desirable--and environmentally safest. Perhaps other corporations would be wise to join with real or potential critics instead of fighting them so hard.

Beyond that, Diebold's group is also examining ways of reshuffling top man agement to free up high executives to concentrate on public issues, many of which have a tremendous influence on profits. One way may be to separate the roles of chairman and chief executive. The chairman--Mr. Outside--would concentrate on anticipating the demands of society and Government. He (or she) would head a board with fewer corporate officers and more independent directors than is common today. The chief executive--Mr. Inside--would run the company. Already Mead Corp. and Connecticut General Insurance have moved in this direction.

Tomorrow's major challenge for U.S. corporations, says Diebold, will be to meet employee desires for a greater voice in decision making. In Europe some unionists sit on boards, and Diebold observes: "A lot of American businessmen are saying, 'Thank God, it's not going to happen here.' " Indeed American work ers do not want to be directors, but, Diebold argues, "their desires to have some participation are just as real here as in Europe. We could get genuine increases in productivity by involving employees in decision making much closer to their levels of work."

With that in mind, Diebold likes to cite a sculpture he once saw of two bronze figures in angry confrontation. Its title: Impossible. Diebold is convinced that the prime challenge facing U.S. enterprise is to head off the threat of impossible confrontations between the company and its employees, and between business and society.

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