Intentional Integrity with Rob Chesnut
Robert Chesnut, author of “Intentional Integrity, How Smart Companies Can Lead an Ethical Revolution—and Why That's Good for All of Us”. Transcript below.
About this event
This fireside chat is co-hosted by Santa Cruz Works and the Santa Cruz County Business Council. In this event, Rob covers:
What is intentional integrity, and how it differs from integrity.
The science of integrity, and how it was implemented at Airbnb.
Who owns integrity within a company, and at what point in a company’s growth should it start thinking about it.
The tradeoff between acting with integrity and making money.
The transition in corporate purpose from the old world of "shareholder value" to the new world of "stakeholder principles".
What’s at stake if companies don’t directly and explicitly address integrity.
About the speaker
Rob Chesnut works with companies to help them develop strategies to drive integrity into their culture. He was most recently the Chief Ethics Officer of Airbnb, Inc., a role he took on in late 2019 after almost four years as Airbnb’s General Counsel.
Rob is a graduate of Harvard Law School and the University of Virginia. He worked for 14 years with the U.S. Justice Department, where he prosecuted bank robberies, kidnappings, murder, and espionage cases, including the prosecution of CIA employee Aldrich Ames. He joined eBay in 1999 as its third lawyer, where he led eBay’s North America legal team and later founded the Internet’s first ecommerce person to person Trust and Safety operation. Rob subsequently spent nearly 6 years as the General Counsel and first attorney at digital education leader Chegg, where he helped take the company public in 2013. He joined Airbnb in 2016, where he grew the legal team from 30 to over 150 legal professionals in 20 offices around the world. His team led initiatives to promote home sharing and address regulatory issues with local governments and landlords around the world. Rob developed a popular interactive employee program, Integrity Belongs Here, to help drive ethics throughout the culture at the company.
On July 28, he published Intentional Integrity: How Smart Companies Can Lead an Ethical Revolution with St Martin’s Press. He lives in San Francisco, CA.
Transcript
[00:09:15.190] - Doug Erickson
We're back to this again, I want to just call out that we've got very important guests tonight, Rob Chesnut, I've known him for that.
[00:10:15.370] - Doug Erickson
I don't want to even say how many years, but I think we first kind of started to get to know each other around a group called the Subdivides. Rob has been he's a heavily into music, but he is also the general counsel for eBay. I think when I first got to know you, Rob, and then more recently, Airbnb, and you are chief ethics officer after general counsel. So I welcome Rob Dunn.
[00:10:48.910] - Rob Chesnut
Thanks for having me. It's great to be here in Santa Cruz hometown.
[00:10:53.650] - Doug Erickson
Yeah, well, welcome back. So we just heard or saw a word cloud of people, ideas of what integrity is. So help us understand the difference between intentional integrity and the cloud, the word cloud of integrity.
[00:11:13.080] - Rob Chesnut
I'll start with integrity. I mean, I think integrity is a tough word to get your arms around. When he saw all the different words popping of some of them I might even disagree with, like loyalty, I think can actually lead you in the wrong direction. Sometimes I think I'll go to the traditional definition of integrity that is doing the right thing, even when no one's watching. The the what's really interesting, Doug, is that in today's world, somebody is always watching.
[00:11:42.490] - Rob Chesnut
You know, I when I grew up, there were three news stations. If I wanted to learn about something, I had to go into my parents bedroom to pull out Encyclopedia Britannica. Today, we are all our own news station. We are all doing broadcast every day when we go on to social media, to Facebook or Instagram or LinkedIn or when we tweet, we all carry around a camera crew with us. It's called cell phone. And so what we see, I think, in today's world is that there aren't secrets much anymore, you know?
[00:12:19.630] - Rob Chesnut
And so, you know, it seems like every time I go online, there's another story about another executive who has committed another violation of integrity and they've lost their job due to sexual harassment or, you know, Boeing. We work Facebook in the like part of this, I think, is just that the world has fundamentally changed. Things don't stay secret anymore. And therefore, the standards are going up. The pressure is on. Now, integrity can mean a lot of different things to different people.
[00:12:54.100] - Rob Chesnut
And I think that's part of the challenge. And we'll talk a little bit later on about about what it can mean in the context of business. But, you know, for me, a business has to have a north star. It has to have a purpose. It has to have a reason to exist, a reason why it's good for the world. And that's got to be front and center. A profit is not purpose. So. Integrity in a business sense, I think, is defining your north star, defining your purpose, understanding who your stakeholders are, and then making decisions that are consistent with that purpose even when it's tough and understanding that as you go through the journey, people are watching all the time and they're going to call you out on it.
[00:13:44.980] - Rob Chesnut
And so intentional integrity is this process of defining a North Star, understanding, you know, who your stakeholders are understanding that people are always watching and understanding that you're going to screw up and look into integrity is not perfection. If so, nobody would have integrity. I think it's about a journey where you're committing to that North Star and you're doing your best through words and actions to follow it and then have the self-awareness to realize when you screwed up. Say it.
[00:14:19.360] - Rob Chesnut
And get back on track again.
[00:14:22.930] - Doug Erickson
That's really interesting. It seems like there's. A big chasm between. What politics would consider is integrity versus what a business, what I'm going to ask Matthew to come on it and start taking questions and Jose is going to be looking at questions in the Q&A and bringing those fielding those for Rob. So I'm going to you're going to see me disappear here, but I'll be in the background playing with the controls.
[00:14:56.290] - Matthew Swinnerton
OK, thank you, Doug. So, Jose, if she'll be actually taking care of the Q&A, like Doug mentioned. So if you have a question for Rob, please put it in the Q&A and it will we'll be able to ask him. I do want to ask a question, but I'm going to hold off. I want to find out about the subdued I bet. But I think that's probably a whole other event. So we'll leave that for another time.
[00:15:22.810] - Matthew Swinnerton
But can you tell us about the science of integrity? As mentioned, you got you were the chief ethics officer for Airbnb. Did you design Airbnb integrity programs with science in mind?
[00:15:40.120] - Rob Chesnut
No, I actually designed Airbnb, this integrity program, and then later, I think, learned that accidentally we had stumbled into some things that actually had some science background to it. So, you know, I spent some time when I was working on this book, I flew out to Duke University and met with a guy by the name of Dan Ariely. You know, some of you on this on talk may may have learned and may know a little bit about Dan Dan's got a bunch of TED talks and books.
[00:16:13.510] - Rob Chesnut
He's got a great movie. Any of you who are really interested in behavioral psychology and lying, he's got a movie called Dishonesty Fascinating. And he studies why people do dishonest things, particularly in business, in the workplace. Now, I think in the when I was I was a prosecutor early in my career. And I think I believe that there were good people and bad people right in the. You've got integrity or you don't have integrity, then basically taught me that I had it all wrong.
[00:16:45.840] - Rob Chesnut
And to do that, he talked to me about an experiment, sort of his base experiment that he's done for years. And the experiment goes like this. Fill up a room with people. You give them a bunch of a sheet with a bunch of math problems on it. And he tells everybody on, I want you to start. And once you start on the math problems, I'm not going to give you time to finish the whole page when I say stop, stop.
[00:17:08.070] - Rob Chesnut
So. Dan. Says, stop, people put their pencil down. He then says, come to the front of the room one by one. Take your sheet of paper with the math problems on it. Put it in the shredder. And then as you're leaving the room, tell the proctor how many math problems you did. We're going to give you a dollar for every problem that you tell the proctor you did. So people come up, they shred the head out, what Dan doesn't tell them is that he played with the shredder.
[00:17:37.160] - Rob Chesnut
The shredder only shreds the outer edge of the piece of paper. So Dan knows exactly how many math problems you've done. The question is what percentage of people lie in a simple experiment like that for a buck? A problem. What do you think what do you think, Martha? Jose, what percentage of people do you think lie in an experiment like that?
[00:18:00.210] - Matthew Swinnerton
Oh, my goodness.
[00:18:01.830] - Rob Chesnut
So in short, if you got the people have got guesses on this, I'm going for that Robocop. What percentage?
[00:18:09.510] - Matthew Swinnerton
I think 30 percent. Or do you just have to go a little bit higher? I'll say like 60.
[00:18:16.920] - Rob Chesnut
Doug, where are you?
[00:18:20.610] - Rob Chesnut
I'm here. Yeah, you know, I heard a Guy Kawasaki podcast about this not too long ago to sort of be cheating, if I know the answer.
[00:18:30.890] - Rob Chesnut
Oh, that's good. That's just great integrity. Thank you. In the chat, what do we got? Over 75 percent, 50 percent. The cynical, the cynical among you are correct. The correct answer is 70 percent of people lie. And it's not just in one experiment. He's done this experiment with tens of thousands of people all over the world who lies more men or women.
[00:19:01.870] - Rob Chesnut
Well, that I don't know, but I would say everybody always says men and I look at the chat men, women actually I see no difference in gender, men, women, the same. Now, what's extraordinary is I'll bet everybody on this phone call thinks they've got integrity. We all think we've got integrity. Yet consistently, 70 percent of people lie in a simple experiment like this. Why so? What Dan has learned in psychology is that we all have integrity issues that we're confronted with every day in life.
[00:19:37.120] - Rob Chesnut
And when we're confronted with these issues as human beings, we are all naturally inclined to go to the answer that is good for us, that benefits us. That's a natural human tendency and. What happens is what what prevents us from going all out and just lying every time, all the time? Well, what prevents that is a desire to feel good about ourselves. We need to feel good about ourselves. We can't feel that we're lying. Terrible people.
[00:20:11.500] - Rob Chesnut
So what a lot of folks do is they end up what Dan calls fudging. So in the math example, I gave you most of that 70 percent only live by one or two or three problems. And they lie only to that extent that they can rationalize it to themselves. So what it comes down to is, can you lie a little bit, fudge a little bit and still feel good about yourself. And if you can rationalize it, well, then you're going to fudge.
[00:20:38.260] - Rob Chesnut
And the same thing with fudging is that a lot of dishonesty start small. And when you start to fudge and you do it a few times, your brain actually becomes conditioned to lying and fudging and you do more and more and more and more. Pretty soon you're way out there doing something you never would have dreamed of. That's why you see things like Enron or know the famous case of the NBA referee, Tim Donaghy. Tim Donaghy, the people who are particularly intelligent or particularly creative are more prone to this.
[00:21:12.070] - Rob Chesnut
Why? Well, creative people are great at coming up with rationalizations, right? They're great at coming up with creative excuses for why what they're doing is OK. So. It isn't a simple world where you've got integrity or they don't, the real truth is that all of us struggle every day internally with what's the right thing to do. And if we can talk ourselves into it, rationalize it, and it's in our favor, that's the direction we're going to go in.
[00:21:44.860] - Rob Chesnut
And then the interesting question is, well, knowing that, how do you influence people's behavior? In other words, if you know that that's people's natural reaction, how can you prevent people from fudging or going down that road? And surprisingly for me, as a former federal prosecutor, it's not the threat of punishment. And what actually influences human behavior is since everyone wants to feel good about themselves. What he learned is that integrity is actually contagious. That is, if you believe that people around you have integrity and are acting good and doing right, you are far more likely to act with integrity yourself because you don't want to feel that you're a worse person than everybody around you.
[00:22:30.840] - Rob Chesnut
So. Silence is the enemy of integrity when no one talks about integrity. And everyone is simply going about their their ordinary business, then you have freedom to fudge and lie. Now, when people talk about integrity and highlight the importance of integrity and reward integrity, then people are far more likely to act with integrity is truly contagious. To demonstrate this, he does that same math experiment, but he makes one change to it at the beginning. Before people start the math problems, Dan says, I want you to write down as many of the Ten Commandments as you can remember on the piece of paper at the top.
[00:23:14.520] - Rob Chesnut
It gives everybody time to write the Ten Commandments. Then he says, OK, now start on the math problems. So he learns two things when he does the Ten Commandments variation. The first is that nobody can remember all the Ten Commandments. In fact, most people can't even remember how. Some can't remember any at all. But something really strange happens to these results, cheating virtually disappears. It goes from 70 percent to under 10 percent just by reminding people of their better selves, reminding them of an ethical framework or a moral order influenced his behavior tremendously.
[00:23:50.410] - Rob Chesnut
So if you're running a business and understand this, the most important thing you can do is the one thing leaders don't like to do. You can you actually need to talk about integrity. It's an uncomfortable subject. A lot of us feel like, well, who am I to talk about integrity? That that I don't want to feel holier than thou. It's none of my business. This is this is work. The truth is talking about integrity is a fundamental quality of being a good leader.
[00:24:20.140] - Rob Chesnut
And if you create the environment where everyone in the company believes that doing the right thing is valued and important and that you as a leader are going to do the right thing, they will want to do the right thing and they will act with integrity as well.
[00:24:34.980] - Matthew Swinnerton
This is perfect because a lot of our people there are tuned in today are business owners. So with that in mind, at what point is a company's growth like at a company's growth? Should they start thinking about incorporating integrity into their DNA?
[00:24:52.740] - Rob Chesnut
Well, I mean, today you better start thinking about it from the moment you're in the garage, thinking about starting your business. And here's why. Cultures are hard to change, particularly when it comes to integrity. You know, if you go back to the original business plan of Bill of Hewlett Packard in a garage, they were talking about it in their one page mission statement that they drafted right from the very beginning. When you're starting a company, the first five people you hire or critical.
[00:25:23.110] - Rob Chesnut
And if you emphasize integrity and start talking about integrity and purpose and North Star the business very early on, you're going to attract five people who are like minded, who are inspired by that purpose and who genuinely want to do the right thing. And then they're going to hire each five people who do that as well. But if you've already got 20, 50 people, hundred people or more, and you've never talked about it before, then it's a hard culture to change.
[00:25:52.780] - Rob Chesnut
I'm not chasing change in Facebook today. Right. Or we work or Google. That's that's difficult. But if you do it from the very beginning and build it into your culture, it's so much easier. And I'll tell you another reason, and this comes as a surprise to a lot of people I know some people are thinking around this integrity stuff, all really nice. But business is business, right? This is business. And I got to make money.
[00:26:22.150] - Rob Chesnut
The data demonstrates companies that operate with integrity or are perceived to be operating with integrity by any by neutral objective standards, actually outperform the market and they outperform their competitors. Why? Well, number one. You've got to understand today's employee, today's employee wants more than a paycheck. They want to make money, but they also want to feel as though what they're doing has value in the world, they want to feel good about it. They want to be part of something that is making the world a better place that drives them as well.
[00:27:01.110] - Rob Chesnut
So if they find a place where their values are rewarded, they are consistent with the company's values. They will first of all, they're more likely to sign on and want to work there. They'll work longer and then work harder and they'll bring in like minded friends. Same with customers, you know, we we are in an age of conscious consumerism. So what do I mean by that data shows that 10 years ago, less than 20 percent of consumers identified themselves as being of value conscious consumers.
[00:27:36.740] - Rob Chesnut
That is that they care about the values of the company they were going to do business with. Today, that number is over 70 percent. So consumers want to do business with companies that have values aligned with their own values. If they perceive that a business doesn't have the values that they have, they're going to leave. I've seen it in Santa Cruz. I've seen a restaurant in Santa Cruz where an owner came out. It came out that an owner was supporting had supported causes that were not consistent with the values of people in Santa Cruz.
[00:28:17.530] - Rob Chesnut
And you know what happened? People started boycotting it. They didn't go anymore. They were out of business fast. So people care about the fact that you've got values now. Integrity is a double edged sword in business, get it right and it can drive your business. It can make you more successful, get it wrong and it can shut you down. And so but you've got to be intentional about it, you can't just sort of assume I'm a good person, I'm sure my employees, they seem like really good people.
[00:28:51.890] - Rob Chesnut
And, you know, I'm I'm just here to make money. It's all going to be fine. The the premise behind the book, Intentional Integrity INB and Dan Ariely s work in the works of Airbnb, Patagonia, Ben and Jerry's. So many companies now is that you need to be intentional about it. You can't assume you've got to talk about it. You've got to plan for it. You've got to drive it in your culture. But when you do, the rewards are powerful.
[00:29:20.360] - Rob Chesnut
It used to be that integrity or ethics and business were mutually exclusive terms. Now we are building toward a world where you can't be successful without it.
[00:29:35.170] - Matthew Swinnerton
So, you know, that brings up a good point. You know, you talked about how, you know, if you don't put integrity into your business, it actually affects your customers. You know, like you mentioned, that that business in Santa Cruz. But it seems like there are so many businesses now that are companies that are failing at integrity. And we could ourselves, you know, many of our business owners, we can integrate it into our businesses, but.
[00:30:00.620] - Matthew Swinnerton
What's going to happen is they're going to be a tipping point when all these businesses that we see in the news are going to stop, you know, putting that stop or I guess doing good or, you know, actually pretty integrity into their business.
[00:30:14.840] - Rob Chesnut
Well, no, I think you're going to see more and more of it. And the reason is because, I mean, what you've probably noticed in the news is that there are a lot of a lot of examples of a lack of integrity. Right. Volkswagen, Boeing, Facebook, Google, we work Uber. And I think it stems from the fact that a lot of a lot of business leaders today went to business school. And when I say business school, I mean both the formal business school and the informal learning, learning business.
[00:30:50.590] - Rob Chesnut
Under an old set of rules, the old set of rules was based on a principle by Milton Friedman called Share Shareholder Value. And what's something like this? Milton Friedman's theories were businesses should always do what's best for their investor shareholder. If you're doing what's right for your investor shareholder, then it is good by definition, and that's the only thing you should ever do. You should only focus on increasing the value to your shareholders. Now, Milton Friedman's work was based on work by professor.
[00:31:31.240] - Rob Chesnut
The problem with this thinking, this exclusive focus on basically money, is that it encourages short term thinking. So in other words. Do whatever is good to bring the share price up today, because if you don't bring it up in the short term, you might not be around in the long term. All that matters is get the share price up this quarter, hit this quarterly number. And in the race, the short term race to get your stock up, there are often collateral consequences.
[00:32:01.630] - Rob Chesnut
Right. So let's don't worry about the carbon that we're dumping into the air and fouling the environment, because fixing it will cost us money that would drive down our profit. That would hurt the share number. So I'm actually doing good. I'm doing the right thing by shareholders by not fixing that, or I know that the people I'm doing business with on the other side of the world have a factory where the conditions are terrible. But that's really not my business.
[00:32:28.000] - Rob Chesnut
That's their business. And doing business in a more expensive place with better conditions would cost me money and hurt shareholder value. That was the old way of thinking. So here's what's happened just in the last several years. Shareholder value has been rejected as the basis for business organizations like BlackRock, the Business Roundtable, which is the, you know, the organization of all the major CEOs in the country, they have now all rejected shareholder value. Even the academic who originally did the thought work for Milton Friedman has now come out and said that it was the worst mistake of his lifetime and he deeply regrets it.
[00:33:09.280] - Rob Chesnut
And then it's wrong. Because it doesn't. Why should shareholders be the only thing that you think about when you run a business? Why are investors the only thing now? Are they important? Sure they're important. But there are other stakeholders that are important, too, and so what's happened is that we've evolved away from shareholder thinking and gone to what's called stakeholder principles. What stakeholder principles, it's a recognition that every business has multiple stakeholders and it ought to operate that business to the benefit of all the stakeholders.
[00:33:43.090] - Rob Chesnut
Now, shareholders, investors, they are stakeholders. They're an important stakeholder, but they're not the only ones. So Airbnb, we have five. We had our investors, we had a host on Airbnb, we had a guest on Airbnb, we had Airbnb employees, and lastly, our final stakeholder was the world. That is, whenever we made a significant decision, we would think about what's the impact of this decision on all five of our stakeholders.
[00:34:13.270] - Rob Chesnut
We actually had metrics to measure the health of all of our stakeholders, and we felt as though we owed an obligation to all of our stakeholders. That sort of thinking is increasingly viewed as the way that business needs to be done in the 21st century. And if you don't operate that way, if you operate under the old way of thinking, you're going to get called out for lack of integrity. And I think one of some of the problems we've seen right now have been caused by a combination of two factors.
[00:34:40.690] - Rob Chesnut
One, you have people who were brought up in the old way of thinking who haven't let go of it yet. They're still operating in the old way. And number two. In the new world, there are no secrets, so if if you're operating without integrity, you're going to get called out so fast. Susan Fowler's blog post and Susan Fowler is an employee, a mid-level employee at Uber. She blew up that entire company. There is far more power now with individual employees and they are quick to speak up and by the way, they're not always fair.
[00:35:14.250] - Rob Chesnut
Some of you do business in Santa Cruz may be thinking, yeah, I got the integrity message, Rob. I got it loud and clear. And in fact, my employees are so focused on integrity that they're not even realistic. And you may well be right in some regards. The world is not always fair. And, you know, you hear about Kinsel culture. Well. Council culture, in some cases, is an excuse for bad behavior, and it's an attempt to easily kind of deflect bad behavior, but sometimes they can reflect the fact that people in the world jump to conclusions really quickly.
[00:35:48.730] - Rob Chesnut
Things move fast now and. It isn't always fair. So you got to be ready.
[00:35:56.370] - Matthew Swinnerton
Great, let's switch gears a little bit and talk about our current situation, where we're getting through coronaviruses getting better, we there's a chance in Santa Cruz we're going to be getting into the yellow tier next week, but we're still it's still an issue in response to the coronavirus pandemic. You updated your book with a chapter on leading with integrity during a crisis. What lessons have we learned during this time?
[00:36:27.660] - Rob Chesnut
Well, you know. A crisis reveals character, and so when there is a crisis, that's when trust is built, right. And. Everyone's really watching during a crisis. I'll give you an example, look at Airbnb, you know, business is going along great until the coronavirus hit and it went from, you know, up into the right to a straight line, down to nothing overnight. You get 6000 employees. You got, you know, a lot of expenses and you've got no revenue.
[00:37:03.520] - Rob Chesnut
Now. I think Brian, you know, the founder of Airbnb, he he did some things that I think were really smart and showed a lot of integrity. Even though it was a tremendous. Crisis and drastic steps needed to be taken. I mean, one two of the first things he did, which I think leaders need to do in a crisis, leaders have to suffer first. I could not believe when I read things where companies were laying off thousands of people and the CEOs are taking home big bonuses, still collecting big paychecks, employees will not respect that.
[00:37:41.850] - Rob Chesnut
So there's a saying in the military leaders eat last. If you're a leader in a company, you've got to lead by taking the pain first. I remember I spent some time and their stories in the book with based on my conversation with Adam Silver, the commissioner of the NBA. You know, when coronaviruses one of the first things Adam Silver did, Major, I think was a 50 percent pay cut or a 75 percent pay cut for he and his top leadership because he knew there was going to be pain.
[00:38:10.880] - Rob Chesnut
But you can't lead and expect others to endure pain if you're not willing to accept it first. And that's what Brian and the leadership and Airbnb did. You know, another thing we did was, you know, straight talk, you know, there's not a lot of there wasn't a lot of happy, you know, it's going to be OK, don't worry, we're all in this together because, look, Brian knew that we weren't going to all be in this together.
[00:38:32.560] - Rob Chesnut
You know, there were going to have to be layoffs. And rather than tell people necessarily what, you know, the happy talk, he was direct and early on, he said, look, I don't know what we're going to be doing yet. This is happening quickly. We're going to have to look at the situation carefully. We're talking about it. And as soon as we can give you more information, we will. But everything's on the table and the executives at the company have taken a 50 percent pay cut, but.
[00:38:58.000] - Rob Chesnut
Right. And then when the layoffs occurred, they were done, I think, with empathy. And where possible, you know, done in a way that that recognize that employees are important, so a year of health insurance for everybody, because in a situation like that, you need health insurance, a small thing. You know, usually when an employee and a tech company is let go. One of the first things they do is say, well, give us your laptop.
[00:39:29.080] - Rob Chesnut
Well, you know, we said, wait a minute, we're letting go two thousand people. What are we going to do with two thousand use laptops? Not going to be hiring. We don't think in the near future, so what good is it going to do us and these employees may need that laptop because their kids are going to be at home doing school remotely. They may have a spouse working remotely. They may need that computer to look for a job.
[00:39:55.380] - Rob Chesnut
So we let everybody keep their laptops. We also think we're generous with servers because we have the cash still to be able to do it. But the message is sent to those people. And by the way, to the employees that remained was you are important, we care about you and we're going to do the best that we can to try to take care of you, even though this is a crisis that threatens the company.
[00:40:18.380] - Matthew Swinnerton
What a good story about laptops. I think I'll always remember that one that is really nice. Let me ask the next question. Is Google's do not do no evil a good motivator for companies integrity?
[00:40:31.460] - Rob Chesnut
I think it is way too general. So silence is the enemy of integrity. So is the lack of specificity. And, you know, you can say do no evil, but let's look at what what they did with and I'll tell you a published story about Google and I'll contrast it to how Airbnb looked at the situation. So Google, you had their chief legal officer engage in a an extramarital affair with a paralegal on his own team. While he worked at Google, she became pregnant and then the company went to them and said, well, looks like you all have a relationship.
[00:41:16.130] - Rob Chesnut
We're going to have to separate you. You can't be you can't work together. Somebody is going to have to leave. And it was pretty obvious who would have to leave, right? It was the paralegal. They moved her to another role in the company. The relationship ended and she wasn't suited to the other role. And she was out of a job a year later. Yet that general counsel, the chief legal officer, continue to make huge sums of money and the story didn't become public for quite a while, but when it became public.
[00:41:45.270] - Rob Chesnut
Wow. How can you, as a company say do no evil if. You look at a situation like that and you handled it that way, so. I'll give you an example of specificity dealing with the same problem when allegations of sexual harassment came out of Google excuse me, at an Uber, and when the Google Story came out, I walked into an executive team meeting at Airbnb and said. Me, too, is is real, the world is changing bad behaviors is not getting swept under the rug.
[00:42:17.520] - Rob Chesnut
We see these issues happening all around us. We need to be intentional about how we're going to address this. And so one of the things I did in that meeting, as I said, I propose that all of us on the executive team and there were 12 of us, including the founders. I propose that we all agree that none of us will have any romantic relationship of any kind with any employee or any vendor. Why should we go there, the danger of that, the harm, the lack of the out of balance between the power, the power imbalance between members of the executive team and other employees are too great.
[00:42:57.840] - Rob Chesnut
The fallout for careers and brands was too great. Why don't we just look around the table and why don't we just agree we're not doing it as a group? And we went around the room and I remember one person said to me, Oh, Rob. We're all married, are in relationships anyway, and I looked at it and said, well, judging what I'm reading in the paper, an executive being married doesn't stop this kind of behavior. And it was a little nervous laughter around the room.
[00:43:23.640] - Rob Chesnut
And then I said again. What do you want to do? And we went around the room and each person said, I'm in. And we all knew in that moment that if any of us then engaged in some sort of sexual relationship, romantic relationship with an employee or a vendor. We were going to have to leave the company, we had broken our word to each other. And then we put it in the code of ethics and published it, the members of the executive team would not do that.
[00:43:51.450] - Rob Chesnut
I don't think we broke any hearts in the company by taking this position, but we were intentional. This is the rules. This is the way we're going to operate when I go in there. And I think my being intentional about it, we made it far less likely to actually happen. By the way, we also did one other thing for employees, we we made a rule that. If you're a manager, you may not ask out or engage in any romantic relationship of any kind with anybody on your team, even a consensual one.
[00:44:20.430] - Rob Chesnut
You can't do it because the power imbalance and then for everybody else in the company. Relationships will happen as long as you're not an executive team member or as long as there's not a control relationship, you may ask someone out, another employee, but. You have the one no rule. If you propose something and you get to know, then you've got to drop it. You can't ask someone out again, even if you get a nice excuse. So if you ask if you propose a date and someone says, oh, I'd love to, but my parents are coming in from out of town or my dog sick, that's it.
[00:44:57.000] - Rob Chesnut
You've got to drop it. You can't ask them out again because we want. Look, it's not a bar at a bar. You can be persistent at a bar. The other person can walk away at work. The other person can't walk away. Ask once if you get to know, you got to drop it, because we have to respect the fact that we want people to be comfortable or we want to be able to do their best. We don't want them to have to worry about dodging an employee who might be bugging them to go out on a date again.
[00:45:22.750] - Matthew Swinnerton
So both of those examples, you were being proactive, but I guess on the flip side, what would your advice be to a company or, say, an individual dealing with the aftermath of an integrity lapse, especially in this time where, you know, Twitter, LinkedIn, anything we say we do could last forever.
[00:45:43.810] - Rob Chesnut
You know, we had one of those that are being being my first month at the company. I'm the new general counsel. And we start seeing reports online about discrimination on the platform use guest of color being turned down, having a hard time getting a room on her baby. There was a hashtag, Airbnb while black. And the momentum grew more stories about it. We we had we are professors setting up fake accounts to test it. And, you know, the initial reaction inside the company was disbelief like this really can't happen, right?
[00:46:28.370] - Rob Chesnut
But then the. Cries about this grew louder and louder. We started doing our own internal looking and we found out, you know what? You're right, it is after statistically. And. You know, in response to the lawsuits, I went off and did my research on the general counsel, right. So I go off and do my research. What is everybody's legal responsibility in something like this? Look, we had the great terms of service that said, no, discrimination is not allowed, we won't tolerate it on everybody else.
[00:47:01.740] - Rob Chesnut
Nice paragraph in the terms of service somewhere, some great law about the fact that as a platform, we didn't engage in any bad behavior if we ever became aware of it, which is hard to prove. But when we could see obvious examples of it, we would throw someone off the site. But there was still clearly a problem. Was there being reliable? And in fact, the discrimination laws even apply to everybody, we're talking about people inviting someone into their house, sharing a room that is even covered by a number of discrimination laws because these are professional landlords.
[00:47:35.690] - Rob Chesnut
So I went off and did all my legal research. I go in to sit down with the spread, my big first meeting with Brian since I've been the general counsel and I start going through the law with Brian, holds up his hand. So I don't care. So what do you mean you don't care? And Brian says Robert. Airborne Bees mission. The North Star for Bambi. Is to connect people from different parts of the world through immersive travel to encourage people to get out from behind their computers.
[00:48:10.240] - Rob Chesnut
And to engage in authentic human experiences together, that's why Airbnb exists. Brian said, if this sort of behavior is really occurring on Airbnb, we are failing as a company, that's simple. We're failing. And he said, I don't really care what the law says we're fixing. I don't care what it cost. And you go solve the legal problem. But we're going to address it head on, and we did know what we went out and I went out as the lawyer, a public publicly acknowledge the problem, went on partner with civil rights groups and said, you know what?
[00:48:51.500] - Rob Chesnut
Instead of suing us, why don't you help us solve it together and we did. Now, in doing so, by the way, we took a number of steps that cost us money. Right? Like, one thing we did I'll never forget. Brian wanted to be very intentional and clear with everyone about the expectations. So instead of a paragraph buried in a terms of service with a checkbox, what we did is we created a screen. When you logged in or joined Airbnb and the screen, basically all it had on it was as a member of the Airbnb community, I pledge I will accept everyone, regardless of the color of their skin, their religion, their nationality, and then blow it had a button.
[00:49:32.600] - Rob Chesnut
I agree or I disagree. And we said to Brian, well, what happens if somebody this is even the law and a lot of places, right? This is global, we're rolling this out globally, and we looked at what happens if they say, I don't agree. Brian says they're gone, that's it. You're off platform. And we said to Brian, well, that means you lose users. He said, I don't care. And we did.
[00:50:02.510] - Rob Chesnut
We lost one point one percent of our users by rolling out that one simple feature. Ryan said. That's fine, because we made decisions based on our North Star and I think and consistent with what I was saying earlier, you know what you. We were stronger as a business as a result, we came out of it, I think we're earning the respect of a lot of people across the world standing up for something that I think we believe is right.
[00:50:31.040] - Rob Chesnut
I think ultimately we will be more successful as a business by doing that, even though in the short run we might have lost a number of users. And I think that's a great example of, you know, what have some self-awareness and realize when you get off track, go back to your North Star, make decisions based upon your North Star. Do what you believe is right, according to that North Star, and ultimately, you know, if you're if you're north stars, right?
[00:51:03.240] - Rob Chesnut
You'll come out of here on.
[00:51:05.840] - Matthew Swinnerton
What is the tell you about North Star? Is there a baseline for what a North Star should be, or does everybody have their own individual North Star?
[00:51:14.970] - Rob Chesnut
Well, I think every company is going to have their own North Star. Now, that North Star should be consistent, I think, with generally accepted notions of what's good and right. But there could be disagreement about what's good and right. You know, I think Airbnb is great mission, you know, mission statement around connecting human beings to authentic personal experiences. That's generally perceived to be a good thing. You know, I think it can evolve over time, too, for a company, right?
[00:51:46.590] - Rob Chesnut
But. It's I think it's less important. You're not going to come up with a mission statement that one hundred percent of the people in the world agree with. So every company's definition of integrity is going to be a little bit different. But if it's out of touch, out of step with the world and the views of the world, it will be rejected and you will, I think, fundamentally struggle as a business. And if it's not sincere and, you know, you've got a nice, flowery statement, but really all your decisions are about.
[00:52:24.530] - Rob Chesnut
The money, the bottom line, the shareholders, then you're a phony and the world will ultimately figure that out because we're in a new, transparent world where the employees will see it, your customers will see it. There aren't that many secrets anymore. It'll get out and ultimately it will hurt you.
[00:52:40.250] - Matthew Swinnerton
For sure. Well, we have about ten more minutes and first of all, Rob, thank you so much for this. I'm so glad we're recording this. I know Doug texted me. We agree. We're just so enjoying this conversation. If anybody has a question for Rob, please, for the Q&A. Again, we got ten more minutes. Actually, I think there's a question there. Josie, do we have a question on the Q&A?
[00:53:08.000] - Rob Chesnut
No, I just saw this one pop up, so I hope I say these names right, because I'm sorry, I'm not familiar with the story.
[00:53:16.100] - Rob Chesnut
I'm not familiar with the story either. So I see the names on there, but I'm not familiar with that particular story. I might if I saw the details, it might it might trigger my memory, but I probably can't comment on it because I don't remember what it is. I will tell you that Google you know, the question relates to how Google handled the particular situation. I think Google is struggling from an integrity perspective. And I think I look, I know some of the folks there.
[00:53:45.930] - Rob Chesnut
The you know, that the challenge for Google is I don't think they they have the language about do no evil, but I don't think they always lived it, to be honest. And the more stories came out about bad behavior, the more I think it disillusioned the employee base. So we just spent a little more walkouts, so we had a little more background, but it was pertaining to ethics and I saw this intelligence. Do you have any thoughts on that?
[00:54:25.160] - Rob Chesnut
Yeah, I. So the question says that Google wanted changes in the research that a band aid group did in finding bias in their algorithms. I mean, that's just that's I remember reading about it. I don't remember the details. But it's a perfect example of, you know, look, everything you do as a business assume it's going to be in the newspaper, everything. And you got to look at a situation like this. And Google failed to understand that.
[00:54:55.800] - Rob Chesnut
Hey, wait a minute. Our own employees found bias in the algorithm. If we're asking them to change that research, change the results. I mean, first of all, fundamentally, what do we stand for? Right, mean what? You know, what are we doing, what do we really stand for, are we really committed? To building a company where the algorithms are not biased themselves and actually contributing to a bias problem in the world, and no one apparently thought that, wow, this might actually come out because it will look, in the old days, you stayed at a company, you hope to work there for 30 years and get a gold watch.
[00:55:40.780] - Rob Chesnut
So if something went wrong, something unethical happened. Most of the time you kept your mouth shut. You're afraid of losing the gold watch and the retirement. Now there's no more retirement. There's no more gold watch. And people are staying two years instead of 30 years and they are emboldened to speak up. They're going to talk about this sort of thing and they're are often going to put it in the worst possible light. You got to understand that as a company.
[00:56:12.190] - Rob Chesnut
And it look at by understanding that, you know, whether you do the right thing because it's the right thing or maybe you do the right thing, because if you do the wrong thing, you'll get, you know, hammered online for it. Either way, you got to do the right thing.
[00:56:28.340] - Matthew Swinnerton
OK, got it. You've got a bunch of questions, but I'm a narrowed down to three here. How does the global power of a tech platform impact integrity?
[00:56:40.540] - Rob Chesnut
The global power of a text attack, sorry, how does the global power of a tech platform so like Facebook or Google impact integrity?
[00:56:54.010] - Rob Chesnut
I think it is fundamentally changed. Integrity in business just in the last five years, because, again, when I was talking about early on. Now everyone has their own news station, everyone can publish anything they see to the entire world and there are no secrets anymore, so. In this kind of a world, bad stuff doesn't get hidden, you have to understand that everything is coming out now. That means either you are going to get ripped online and in the world because you're not acting with integrity.
[00:57:33.460] - Rob Chesnut
Or if you're smart, you recognize that integrity has to be at the core of what you do and driven into the culture of your company so that No one, there's no bad thing to release. So this is it's instant, the world is instant. It's fast, we are we are now all we are not operating in separate lanes anymore. We're all not in the old world. We're all in separate lanes trying to make money. In business now, we are running very closely together in tightly packed lanes.
[00:58:07.560] - Rob Chesnut
Everybody's watching everybody else. Everybody's actions impact something else around them, maybe across the entire world that changes your obligations, I think, to operate with integrity. And it means that if you don't, the spotlight's on you and you're going to get called out.
[00:58:27.880] - Matthew Swinnerton
OK, Rob, we're going to get a little personal, is that OK?
[00:58:30.880] - Rob Chesnut
Absolutely. Go ahead.
[00:58:32.410] - Matthew Swinnerton
OK, good. OK, so you started your career as a federal prosecutor. You even prosecuted the likes of CIA spies. How did this experience help shape your philosophy about intentional integrity? Well, you know, being a being a federal prosecutor, I think was a it was a hard job in the sense that I didn't feel like I was. I didn't feel like I was contributing in a positive way to society. I know that sounds a little weird, but let me explain.
[00:59:07.660] - Matthew Swinnerton
I was presiding over sort of the end of someone's productive life when I prosecuted somebody in the federal system. They were going to jail for 20 years. No parole or longer. And it was sad, to be honest, I saw a lot of young kids go to jail who, you know, I think in a lot of ways didn't have a fair didn't have fair breaks in life. Yeah, prosecuted like Aldrich Ames and some other CIA, FBI, NSA employees for espionage and but it was sad and negative.
[00:59:38.190] - Matthew Swinnerton
And I always thought, you know what? I want to do something positive in the world. I want to help. I want to work for a company where I can start having a positive impact and help people help people build productive lives. And that's what drove me out of being a federal prosecutor. And I just got lucky. I worked my my jurisdiction was a federal prosecutor in Northern Virginia. And while I was a prosecutor, I started getting all these inquiries about a little company called America Online.
[01:00:08.310] - Matthew Swinnerton
Some of you on this call may know America Online. Back then, nobody had heard of them. I had to go start looking into them just because they were in my jurisdiction and prosecutors from all over the country were reaching out to me to get records from. So that's when I went online and for the first time and I was like, whoa, this is incredible. You know, the Senate, I think, looks like it could actually have some legs, and that's where I found eBay is just a tiny little company.
[01:00:34.940] - Matthew Swinnerton
So I think, you know, as a prosecutor, I the work is sad work. And I think it really drove me to trying to to be a part of something a lot bigger and more productive. But I'm not going to I wasn't going to go part B part of something productive, positive for the world with and abandon any sense of doing the right thing and integrity. So I think my from a career perspective, I think it kind of evolved into I want to be part of building something, but I want to be part of building something I'm proud of, something that has integrity.
[01:01:10.910] - Matthew Swinnerton
And so my role, I think, you know, part of my role at eBay and Chegg and Airbnb was really about building integrity into the culture of the company so that when we are operating in the world, we're doing it in a way that we're all proud of and feel good about. And look, we made mistakes we could sit on. We could sit on this call for another hour and talk about issues that each of those companies has had.
[01:01:33.350] - Matthew Swinnerton
But I think they've had fewer issues than companies. I think that didn't put integrity as a core value and intentionally work at it. And so overall, I think it's the prosecution thing had a big impact on me, but maybe not in the way you think.
[01:01:52.040] - Matthew Swinnerton
Well, to end up, can you give us a little background or information about what a person would get out of reading the new book, but even more importantly, I want to know why you wrote it. Why was it so important to get this message out?
[01:02:12.770] - Rob Chesnut
You know what? We we built a program on Airbnb and Integrity Program got different. You know, it's not the integrity poster. It's not the third party sexual harassment video or the compliance poster or, you know, the canned code of ethics. It was different and it was a lot more human and authentic. And my initial reaction was I was worried that employees would be like, oh, there's some old lawyer. You know, what kind of bull look at the moral stuff is see pulling.
[01:02:39.410] - Rob Chesnut
I got a stunning reaction. Employees loved it. Employees were very engaged with it. They wanted to be part of it. We had we had deep engagement with our integrity program at the company and widespread across all the different business units all around the world. I was surprised at how it was embraced even by the younger generation, and I'm surprised that it was embraced globally, regardless of the culture of the place. The country that I thought and the reason I wrote the book was, you know, my wife used to be in the publishing industry a long time ago and we like to hammer everything.
[01:03:16.850] - Rob Chesnut
Looks like a nail to her. Everything looks like a book. So she said, look, you got to tell people about this. And most companies aren't doing this sort of interesting things Airbnb is doing in this regard. You ought to share it. Oh, my God, I'm a lawyer. I'm a general counsel. And I'm not I'm not an author. I've never read a book. And she said, you really need to do it. You have an obligation to share this.
[01:03:37.490] - Rob Chesnut
I'm like, now? And she said, I'm going to get you a major publisher and I'm going to get you a writer. And I said, all right, you give me a major publishing deal and you get me a writer and I'll do the book. And that was my mistake, because if anybody knows my wife, a month later, my wife had, you know, offers from multiple publishers. And McMellon McMillan was enthusiastic and signed on for the book.
[01:04:01.970] - Rob Chesnut
And I had a writer and we did the book. And look, by the time the book came out, I was like, wow, you know what? Maybe I should do this. I had to really embrace this as something to do now, you know, beyond just one company. Maybe this is something that I want to talk about with a lot of company. So, you know, you read the book, it's not Plato and Socrates.
[01:04:21.290] - Rob Chesnut
You know, most people are they're surprised when they say, Rob, I actually really like this. You know, it's got a lot of stories. It's got humor, very practical. So if you if you've got a business and you really are, you want integrity to be a part of what you do and how you operate every day. The book practically I think it's an easy read and it will help you do that.
[01:04:43.740] - Matthew Swinnerton
Great. Well, thank you so much, Rob, this has been such a great hour and I will turn it back over to Doug.
[01:04:51.030] - Rob Chesnut
Thank you, Matthew and Jose, and you've given me so much to think about, I think I don't know if I'm going to sleep tonight. There's so much and you know, we are at this inflection point. I believe in our culture where integrity is. Well, it goes from household to household to global warming types of issues. So it is it is no longer something that you keep quiet and wait for the gold watch. Like you say, it is super important right now.
[01:05:28.980] - Doug Erickson
And and it's what we've been begging for. Businesses, for politicians. It's it's. You've given me a lot to think about your book, Amazon. You know, a Santacruz bookshop in a bookshop area.
[01:05:48.420] - Rob Chesnut
I tried to get Ryan to put like a big cutout cut out of me by the register with stacks of books that didn't work out that way, but they still got books there. You can get. You can get it on Amazon. You get in a bookstore. If folks are really interested in this, I do a post almost every day on integrity in business, sports and politics on LinkedIn. So just reach out to me on LinkedIn. Tell me, you know, say that you heard the the you know, what we did today on Senecas Works and I'd love to connect with you and continue the conversation.
[01:06:18.000] - Rob Chesnut
Right, thanks again, Doug, thank you. Thank you, Jose. Thank you, Matthew. Adrian, thank you guys for doing this and giving me the platform. I really appreciate it.
[01:06:28.260] - Doug Erickson
Thank you. All right. Thank you. Thank you to all of everybody who's joined us tonight. We'll see our next event.