Caterpillar Exec And BU Grad Speaks At Business SchoolOct. 23, 2002
Doing business by a code of values can provide a competitive advantage, according to James Beard, president of Caterpillar Financial Services and vice president of Caterpillar Inc.
The Baylor University business graduate was the guest speaker in the Ben H. Williams Distinguished Speakers Series, sponsored by the Hankamer School of Business.
"Many value statements I've read are like looking at someone else's religion," said Beard. "There is a lot you like, but something important is really missing."
His company's value statement "says what it means to be part of Caterpillar" - "We are people of integrity who care for others in our workplace and our world. We are driven by the freedom and the responsibility to exceed the expectations of those we work with and serve."
Caterpillar employees live by a worldwide code of conduct. Those in leadership positions sign a statement annually attesting that they know of no unethical or illegal actions within the company. Volunteerism is expected and takes on many forms, as appropriate to the local culture.
"But how does this relate to the market?" Beard asked.
"After 9-11, legislative action passed that gave our company a huge tax benefit," he said, "and it was retroactive. Although contracts with customers clearly stipulated that any such windfall would benefit only Caterpillar and customers would not be entitled to the gains, we concluded that our values would only allow us one course of action - we gave the money to our customers."
A critical factor in nurturing a value-oriented culture, said Beard, is to "communicate, communicate, communicate." He visits employees at every location around the world regularly. "You need to show interest... to be there," he said.
In addition, he communicates frequently with employees through various other media, such as quarterly videotapes. Employee satisfaction at the company is well above that of their competitors, said Beard.
The company, in the running for the coveted Malcolm Baldridge quality award, embraced "Six Sigma" two years ago and saw an immediate economic benefit of $10 million from the initiative in the first year. The "Six Sigma" strategy is designed to help corporations smoothly and efficiently by eliminating waste, optimizing processes and innovating and growing.
When Beard enrolled at Baylor's business school in 1959, there was no Hankamer building. The building was completed in Beard's sophomore year. After completing his BBA at Baylor University, he earned an MBA from Harvard University.
Caterpillar Inc. is the world's largest manufacturer of construction and mining equipment, diesel and natural gas engines, and industrial gas turbines. A Fortune 500 company, Caterpillar posted 2001 sales & revenues of $20.45 billion - $275 million higher than 2000.