Marc Lautenbach explains how inclusivity, adaptability and a strong sense of purpose have helped his company to prevail through thick and thin
Postal equipment firm Pitney Bowes will celebrate its centenary on 23 April. The US-based business – formed by the 1920 merger of Arthur Pitney’s Postal Machine Company and Walter Bowes’s Universal Stamping Machine Company – turned over nearly £2.5 billion across its 13 markets last year.
Specialising in parcel delivery and mailing tech such as franking machines, Pitney Bowes has more recently expanded into e-commerce fulfilment, data analytics and financial services. Its UK arm, based in Hatfield, Hertfordshire, employs 500 people and serves clients including Next and The White Company.
One of the keys to the firm’s enduring success has been its commitment to diversity and inclusion, according to group CEO Marc Lautenbach. Women occupy four of its 10 board positions and 31 per cent of its senior management roles, for instance, while ethnic minorities comprise nearly half of its total workforce.
“Diversity and inclusion are necessary ingredients for really great innovation over a sustained period,” he says. “You must be able to innovate continually if you want to be a 100-year-old company.”
Pitney Bowes first declared its inclusivity back in the 1940s – an era when racial segregation was enforced by law in several states of the US. Its then CEO, Walter Wheeler, made a commitment to ensure that its workforce reflected the diverse neighbourhoods surrounding its HQ in Stamford, Connecticut. Showing the courage of his conviction, he once called off a sales conference when he found that the hotel hosting the event had refused entry to one of the firm’s African American employees.
“That was an example of Pitney Bowes’ motto of ‘doing things the right way’,” Lautenbach says. “Those words have been meaningful throughout the company’s history.”
Adaptability is crucial for business survival
Having a “continual eye on the horizon” has been another important factor in the firm’s lasting success, Lautenbach adds, referring to its approach to risk management. To compensate for the declining number of Americans using traditional postal services, for instance, Pitney Bowes expanded into what he calls “logical adjacencies”. These offshoots include its shipping division, which has seen a tenfold growth in its annual income since he became CEO in 2012.
“You have to find the right market that you can win in – plus the capability to innovate and evolve your business,” he says.
A strong sense of purpose and sound values are two other common characteristics of long-lasting businesses, according to the CEO. He should know this better than most, having worked for two companies that are even older than Pitney Bowes.
Lautenbach, who spent almost three decades at IBM (108 years young) and remains on the board of the Campbell Soup Company (151), says: “If you look at organisations with that kind of longevity, they tend to have a sense of purpose beyond themselves and a values system that’s ingrained in the fabric of the business. You need a good market, good technology and a good business model too. But if you look at any company that’s over 100 years old, it will usually have good values as well.”
It’s not just about the shareholders
Showing his commitment to the principles of stakeholder capitalism last summer, Lautenbach was one of nearly 200 signatories to a statement by the Business Roundtable, a group of CEOs representing some of the largest companies in the US. This document sought to redefine the purpose of a corporation to “move away from shareholder primacy”.
He explains: “People are, appropriately, asking some tough questions of the existing capitalist model, so I think it was important for these businesses to get their message out. It wasn’t intended as a departure from how these businesses were operating. It was meant to be a more articulate affirmation of what great companies do already.”
Although he was glad that the statement sparked a wider debate about the purpose of businesses, Lautenbach was surprised by some of the reactions.
“Many people externally looked at the statement and thought that businesses could either pay attention to their shareholders or look after their other stakeholders. For me – and many others – you can and should do both. People want to hear what businesses are doing to serve all their constituents. I think that we, as signatories of the letter, should be accountable for that.”
But there is one factor in corporate staying power that directors, shareholders and other stakeholders ultimately have no control over. As Lautenbach readily admits: “You do have to be a bit lucky too.”